Jones (Marcus) v Delores Jones and another

• Jurisdiction: Jamaica
• Judge: BROOKS, J.
• Judgment Date: 07 February 2008
• Judgment citation (vLex): [2008] 2 JJC 0701
• Court: Supreme Court (Jamaica)
• Date: 07 February 2008
• Docket Number: CLAIM NO 2006 HCV 4063

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

CLAIM NO 2006 HCV 4063

BETWEEN

MARCUS JONES

1 ^ST CLAIMANT

AND

DELORES JONES

2 ^ND CLAIMANT

AND

COLGLO EQUITIES JAMAICA LIMITED

DEFENDANT

COMPANY LAW - Winding up - Petition for winding up - Whether bona fide dispute as to debt - Whether company solvent - Whether advertisement of petition in Jamaica Gazette mandatory

BROOKS, J

1 On the 7 June 2005, Marcus and Delores Jones secured a judgment against Colglo Equities Jamaica Limited. The judgment was in the sum of $4,200,879.70 with interest and costs to be added thereto. Colglo has failed to pay the judgment debt or any part of it.

2 There is no indication that the Joneses followed the normal method of securing the services of the Bailiff of the Supreme Court. Instead they sent a statutory notice pursuant to section 221 (a) of the Companies Act demanding payment. In the absence of any positive response from Colglo, the Joneses have filed a petition for Colglo to be wound up. The debt owed at the time of the filing of the petition was $6,657,764.80.

3 Mr. Dunkley has, on behalf of Colglo, sought to resist the petition. He submitted that the court ought not to grant the petition because the debt is bona fide disputed and that Colglo is solvent. The question for the court to consider is whether, in the hybrid approach used by the Joneses, the argument that the debt is being disputed, is available in respect of a judgment debt. There is also a question as to whether the notice of the hearing of the petition was properly advertised. In assessing the matter I shall:

• a. outline the submissions concerning the dispute;

• b. consider the obligation to pay judgment debts in this context;

• c. assess whether the dispute falls within the category of a bona fide dispute; and

• d. examine whether advertisement of the petition in the Jamaica Gazette is mandatory.

4 The Submission that there is a Dispute

5 Mr. Dunkley relied on two affidavits sworn to by a Mr. Horace Harris, the Managing Director of Colglo. Mr. Harris explained that Colglo was a property developer. Colglo, he said, owns lands which have been developed into a gated community with over seven hundred lots, featuring a golf course, shopping centre, parks, a lake, a clubhouse and other amenities. A number of the lots have been sold and others are available for sale. He says that the company has a net worth of $100,000,000.00. On this evidence Mr. Dunkley submitted, this company is clearly able to pay its debts.

6 Mr. Dunkley also submitted that the judgment on which the petition is based was a default judgment and that such a judgment by itself ought not to be the basis of the grant of a petition. Finally he submitted that the court ought to take into account the fact that Colglo has an existing claim against the Joneses and is seeking to effect service of the Claim Form on them.

7 Based on all these factors, counsel argued that the court ought to find that there is a bona fide dispute, that Colglo's failure to pay the debt is not "neglect" for the purposes of section 221 (a) of the Companies Act and that the petition ought to be dismissed. He submitted that the application to wind up the company is an act of oppression. Mr. Dunkley cited Cercle Restaurant Castiglione Company v Lavery (1881) Ch. D. 555 and In re London and Paris Banking Corporation (1875) L.R. 19 Eq. 444 in support of his submissions.

8 The obligation to pay the judgment debt

9 A convenient place from which to start the assessment of Mr. Dunkley's submissions is the well established principle that judgments of the court are to be obeyed until they are set aside. In Chuck v. Cremer (1846) 1 Coop. temp Cott. 342, Lord Cottenham L.C. stated:

"A party, who knows of an order, whether null or valid, regular or irregular, cannot be permitted to disobey it... That the course of a party knowing of an order, which was null or irregular, and who might be affected by it was plain. He should apply to the court that it might be discharged. As long as it existed it must not be disobeyed."

10 The principle has been enforced in our jurisdiction. Cooke J.A. in Bastion Holdings Ltd. v. Bardi Ltd. and anor. SCCA 14/2003 (delivered 29/7/05), stated that "a party who disagrees with the procedural framework must comply with any orders of the court made within the framework until it has been decided that the court was in error".

11 Mr. Dunkley is therefore not on good ground when he seeks to devalue the status of the judgment against Colglo. The fact that it is a default judgment does not make it any less valuable. The Joneses are entitled to the grant of the petition barring any substantial procedural flaws or proof of improper conduct.

12 In In re Amalgamated Properties of Rhodesia (1913), Limited [1917] 2 Ch. 115 the petitioner had secured an order of...