Island Lubes Distributors Ltd v West Indies Petroleum Ltd

• Jurisdiction: Jamaica
• Judge: Laing, J
• Judgment Date: 28 September 2021
• Court: Supreme Court (Jamaica)
• Docket Number: CLAIM NO. SU2021CD00268

[2021] JMCC COMM. 30

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

CLAIM NO. SU2021CD00268

Between

Island Lubes Distributors Limited

1 ^ST Claimant

and

West Indies Petroleum Limited

2 ^ND Claimant

And

John Levy

1 ^ST Defendant

And

Donna Levy

2 ^ND Defendant

And

Sprint Fuels & Lubricants Limited

3 ^RD Defendant

And

Courtney Wilkinson

4 ^TH Defendant

And

Ecomarine Energy Company Limited 5

5 ^TH Defendant

And

ECO Petroleum Limited

6 ^TH Defendant

IN CHAMBERS

Mrs. Georgia Gibson Henlin Q.C., Ms. Stephanie Williams and Ms. Peta-Shea Dawkins instructed by Henlin Gibson Henlin for the 1 ^st and 2 ^nd Claimants

Mr. Nigel Jones and Ms. Kashina Moore instructed by Nigel Jones & Co, Attorneys-at — Law for the 1 ^st, 2 ^nd and 3 ^rd Defendants

Mrs. Symone Mayhew Q.C. and Ms. Ashley Mair, instructed by Mayhew Law, Attorneys — at-Law for the 4 ^th, 5 ^th and 6 ^th

Injunction — Principles to be applied

Breach of fiduciary duty — Principles to be applied — Whether maintainable against former director

Wrongful interference with contractual relations and procuring breach of contract Distinction and principles to be applied

Breach of Confidence — Principles to be applied

Consent order — Whether real contract — Circumstances in which party may be permitted to withdraw consent

Laing, J

The Claim

1 The Claimants are limited liability companies incorporated under the laws of Jamaica. The 1 ^st Claimant (“Island Lubes”) is a wholly owned subsidiary of the 2 ^nd Claimant (“WIPL”). Both Claimants are involved in the distribution of lubricants and other products.

2 The 1 ^st Defendant (“Mr. Levy”), was a director of the 1 ^st Claimant until 16 ^th March 2021 and of the 2 ^nd Claimant until 9 ^th February 2021. He is currently a Director and Shareholder of the 3 ^rd and 5 ^th Defendants.

3 The 2 ^nd Defendant (“Mrs. Levy”), was the Company Secretary of Island Lubes up until her resignation by letter dated the 29 ^th April 2020.

4 The 3 ^rd Defendant (“Sprint”), is a limited liability company incorporated under the laws of Jamaica. Mr. Levy and Mrs. Levy are its sole Shareholders and Directors.

5 The 4 ^th Defendant (Mr. Wilkinson”), was until 9 ^th February 2021 a director of WIPL. He is currently a Director and Shareholder of the 5 ^th Defendant.

6 The 5 ^th Defendant (“Ecomarine”) is a limited liability company incorporated under the laws of Jamaica on the 16 ^th February 2021. Mr. Levy and Mr. Wilkinson are its sole Shareholders and Directors.

7 The 6 ^th Defendant (“Eco”) is a limited liability company incorporated under the laws of Jamaica. Mr. Levy and Mr. Wilkinson are its sole Shareholders and Directors.

The issue of procedure

8 By Notice of Application filed 11 ^th June 2021 (“the Original Notice of Application”), Island Lubes sought a number of reliefs including a freezing order, a search order, or in the alternative, a preservation order and an interim injunction. The Court granted an interim injunction in terms of the order dated 16 ^th June 2021 (“the Order”).

9 On the 13 ^th July 2021, the Attorneys-at-Law representing the Claimants filed an Amended Notice of Application (the Amended Notice of Application”) by which the 2 ^nd Claimant WIPL was added as an applicant. Mrs. Gibson Henlin Q.C. submitted that a Notice of Application can be amended at any time, and there was nothing to prohibit the Court hearing the Amended Notice of Application at the inter partes hearing, despite the fact that the Order was granted in respect of the Original Notice of Application only. Learned Queen's Counsel argued that the amendments arose out of the same facts and would involve the same principles of law. Counsel for the Defendants objected to the hearing of the Amended Notice of Application. I upheld the objections and proceeded with the inter partes hearing of the Original Notice of Application filed 11 ^th June 2021. The hearing of the Amended Notice of Application was adjourned pending the hearing of an application by the 1 ^st to 3 ^rd Defendants for a stay of the proceedings. This application was subsequently withdrawn.

10 On 14 ^th August 2021, I delivered a written Judgment bearing citation [2021] JMCC COMM 27 (“the First Judgment”) in which I ordered the fortification of the Applicant's undertaking as to damages and granted an injunction in the following terms:

1. An injunction is hereby granted until trial of the claim or further order of the Court:

(a) restraining the 1 ^st, 2 ^nd and 4 ^th Defendants by themselves, their servants or agents or otherwise howsoever from using or misusing the confidential information or any information in relation to the contracts, suppliers, customers and employees of the 1 ^st Claimant or any part thereof for any purpose or otherwise exploiting the information.

(b) restraining the 1 ^st, 2 ^nd and 4 ^th Defendants, their servants, and/or agents or otherwise from inducing or procuring breaches by unlawfully interfering in contracts between the 1 ^st Claimant, and its employees, sub-contractors or suppliers or business relationships and to prevent them from committing a repetition thereof.

(c) restraining the 1 ^st and 2 ^nd Defendants from breaching their fiduciary duties to the 1 ^st Claimants and from conflicts of interest by engaging on their own account or in conjunction with others and whether directly or indirectly to establish, develop, carry on or assist in carrying on, be engaged, concerned, interested or employed in, or provide technical commercial or professional advice to any other business, enterprise or venture engaged in supplying goods and services identical, similar or competitive with the marketing, warehousing, and distribution of lubricants for passenger and commercial vehicles in Jamaica.

11 On 13 ^th September 2021, the Amended Notice of Application came on for hearing. I expressed a concern as to whether it was permissible or appropriate for the Court to hear the Amended Notice of Application since the Court had already determined the Original Notice of Application. Counsel for the Defendants expressed a similar concern and indicated that the continued existence of references to Island Lubes including the statement that it was claiming reliefs, tended to obfuscate the precise ambit of the application. The Court was not required to rule on this issue because Counsel, in a display of pragmatism, by mutual consent, agreed that the most appropriate course was for a fresh Notice of Application to be filed by WIPL as the sole applicant. Pursuant to that agreed position, an appropriate application was filed (“the Application”.)

12 The draft Application provided to the Defendants on the 13 ^th September 2021 after a short adjournment sought the following orders:

1. An injunction to restrain the 1 ^st, 2 ^nd, 4 ^th, 5 ^th and 6 ^th, Defendants by themselves, their servants or agents or otherwise howsoever from using or misusing the confidential information in relation to the contracts, suppliers, customers and employees of the 2 ^nd Claimant or any part thereof for any purpose or otherwise exploiting the information.

2. An injunction restraining the 1 ^st, 2 ^nd, 4 ^th, 5 ^th and 6 ^th Defendants, their servants, and/or agents or otherwise and to prevent them from committing a repetition thereof, inducing or procuring breaches by unlawfully interfering in contracts between the 2 ^nd Claimant, and their sub-contractors or suppliers or business relationships.

3. An injunction restraining the 1 ^st and 2 ^nd Defendants as parties to the agreement for sale or otherwise as the servants and/or agents of the 1 ^st Claimant from breaching clause 8 of the contract dated the 14 ^th day of October 2019 and in particular for the period of three (3) years from:

• a. on their own account or in conjunction with others and whether directly or indirectly to establish, develop, carry on or assist in carrying on, be engaged, concerned, interested or employed in, or provide technical commercial or professional advice to any other business, enterprise or venture engaged in supplying goods and services identical, similar or competitive with marketing, warehousing and distribution of lubricants for passenger and commercial vehicles in Jamaica at the date of signing this Agreement.

• b. having any proprietorship interest as shareholder or partner in any business which is identical, similar to or competitive with Island Lubes Distributors Limited in Jamaica;

• c. at any time after the Completion Date disclose any confidential information in respect of Island Lubes Distributors Limited to any person or use it for any purpose;

• d. solicit, canvass or entice away (or endeavour to solicit, canvass or entice away) any of the employees of Island Lubes Distributors Limited for the purposes of employment by the Vendors in an enterprise or venture materially competing with Island Lubes Distributors Limited;

4. An injunction restraining the 1 ^st, 2 ^nd and 4 ^th, Defendants from continuing to breach their fiduciary duties to the 2 ^nd, Claimant and from conflict interest by engaging in the following:

• a. on their own account or in conjunction with others and whether directly or indirectly to establish, develop, carry on or assist in carrying on, be engaged, concerned, interested or employed in, or provide technical commercial or professional advice to any other business, enterprise or venture engaged in supplying goods and services identical, similar or competitive with the marketing, warehousing and distribution of petroleum and lubricants for passenger, commercial vehicles, and maritime vessels in Jamaica.

• b. having any proprietorship interest as shareholder or partner in any business which is identical, similar to or competitive with the 2 ^nd Claimant in Jamaica;

• c. Disclosing any confidential information in respect of the 2 ^nd, Claimant to any person or use it for any purpose;

• d. solicit, canvass or entice away (or endeavour to solicit, canvass or entice away) any...