Little Belize Corn Mill Company Ltd, Wiens (T/A Northern Farm Products) and Redecop (T/A/ Northern Farm Products) v Horizon Distributors Ltd

• Jurisdiction: Jamaica
• Court: Supreme Court (Jamaica)
• Judge: Simmons J
• Judgment Date: 12 May 2017
• Neutral Citation: [2017] JMCC Comm 13
• Docket Number: CLAIM NO. 2016CD00164
• Date: 12 May 2017

Between

Little Belize Corn Mill Co. Limited

1 ^st Claimant

and

Pedro Wiens T/A Northern Farm Products

2 ^nd Claimant

and

Johan Redecop T/A Northern Farm Products

3 ^rd Claimant

and

Horizon Distributors Limited

Defendant

[2017] JMCC Comm 13

Simmons, J.

CLAIM NO. 2016CD00164

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

COMMERCIAL DIVISION

Enforcement of judgment — provisional attachment of debt order — application to set aside

Consent Order — application to vary

Miss Kashina Moore instructed by Nigel Jones & Company for the claimants

Mr. Evan Evans for the defendant

IN CHAMBERS

Simmons J

1 This is an application to set aside a provisional attachment of debt order and for the terms and conditions of the Consent Order dated the 10 ^th January 2017 to be reinstated. In the alternative, the defendant seeks an order for the variation of the said Consent Order as follows:-

• (i) To provide for the payment of interest up to August 2019;

• (ii) Payment of the sum of US$1,200.00 for eight months thereafter being March to October 2017;

• (iii) The balance by twenty two equal monthly instalments of US$1,971.60 for the period November 2017 to August 2019;

• (iv) Interest of US$10,354.70 to be paid in three equal monthly instalments commencing February 2018.

• (v) That the claimants shall be entitled to enforce the judgment in full in the event that the defendant fails to make two consecutive payments; and

• (vi) That in the event that the debt is settled before August 2019 the amount of interest is to be adjusted accordingly.

Background

2 On the 9 ^th June 2016 the claimants filed an action in which they claimed certain sums due and owing for goods sold and delivered to the defendant. The sum of United States thirty thousand five hundred and seventy four dollars and twenty five cents (US$30,574.25) was said to be owing to the first claimant. The defendant was also stated to be indebted to the second and third claimants in the sum of United States thirty two thousand five hundred dollars (US$32,500.00).

3 The defendant in its defence admitted that it had purchased the goods from the claimants but disputed the amounts outstanding.

4 On the 2 ^nd November 2016 the claimants filed an application for Judgment on Admission based on the contents of a letter from the defendant dated the 4 ^th December 2015. The defendant in that letter proposed a payment schedule based on what it regarded as the “correct balances”.

5 The parties went to mediation and arrived at a settlement. On the 10 ^th January 2017 a consent order was made in accordance with the terms of that settlement. It states as follows:-

• (vii) The defendant is indebted to the first claimant in the sum of US$26,475.25 plus interest at the rate of 4% per annum;

• (viii) The defendant is indebted to the second and third claimants in the sum of US$36,500.00 plus interest at the rate of 4% per annum;

• (ix) Interest is payable from January 28, 2015 on the sums stated until the debt is extinguished and amount to US$8,413.20.

6 The parties also agreed in clause 3 that the debt would be liquidated as follows:-

• (i) Payment of the sum of US$5,000.00 on or before January 30, 2017;

• (ii) A second payment of the sum of US$5,000.00 on or before February 28, 2017;

• (iii) Payment of the sum of US$1,200.00 for six months thereafter being March to August 2017;

• (iv) The balance by ten equal monthly instalments of US$4,577.43;

• (v) Interest of US$8,473.20 in two equal monthly instalments commencing February 2018.

It was also agreed that if the defendant failed to make any of the above payments in accordance with the terms of the order, the claimants would be entitled to enforce their judgment in full against the defendant.

7 The claimants obtained a Provisional Attachment of Debt Order on the 27 ^th February 2017 on the basis that the defendant failed to make any payments towards the satisfaction of its debts. The hearing of the application for the provisional order to be made final was scheduled for the 6 ^th April 2017.

8 On the 23 ^rd March 2017 the defendant filed an application to either set aside or discharge the provisional order and for the terms of the Consent Order to be reinstated. The grounds on which it relied are that the breach of the terms of the order was unintentional and that the sums due in January and February had been paid.

9 Three affidavits were filed in support of the application. In summary, they indicated that the defendant's sales declined in 2016 and that it suffered a loss in that year. It was also indicated that part payment of the sum due in January was paid on February 17 and payment of the remainder was to follow in short order.

10 The affidavit of Mr. Robert Pinkerton the defendant's Managing Director, indicated in detail the problems which the defendant is said to have experienced in 2016. He stated that the breach of the Consent Order was unintentional and arose out of difficulties with the defendant's cash flow. Mr. Pinkerton also stated that when the Consent Order was arrived at, the defendant had expected to receive a shipment of goods in December 2016. Those goods, he said did not arrive until February 2017 and resulted in an “unexpected downturn” in sales. He also indicated that the defendant was experiencing difficulty with the collection of its receivables.

11 It was also stated that the defendant's account is overdrawn by almost JA$1,000,000.00 and other funds have been hypothecated by the bank. Mr. Pinkerton also indicated that the defendant's ability to trade and earn has been “severely hindered” as a result of the inaccessibility of its account.

12 The claimants in their affidavit in response confirmed that the defendant had made the payments as indicated. However, they expressed the view that based on a letter received from the defendant's bank, the defendant used an account with United States twenty thousand two hundred and thirty eight dollars and twelve cents (US$20,238.12) to secure its overdraft facility.

13 That letter which is dated March 21, 2017 indicates that the defendant is in overdraft to the tune of Jamaican eight hundred and twenty eight thousand eight hundred and eight dollars and twenty five cents (J$828,808.25) leaving (J$171,191.75) at its disposal. The letter also indicates that United States two dollars and eighteen cents (US$2.18) is available from the account used to secure the overdraft.

14 The defendant's application was amended on the 18 ^th April, 2017 as set out in paragraph 1 of this judgment.

Applicant's /defendant's submissions

15 Mr. Evans stated that the cases have established that consent orders largely fall into two categories. He indicated that in the case of Siebe Gorman and Co Ltd v Pneupac Ltd [1982] 1 All ER 377 it was established that the words “by consent” in an order were ambiguous and could be taken to mean that the order evidenced a real contract between the parties or merely that the parties did not object to the order being made. This principle he said was also stated in Chandless — Chandless v Nicholson [1942] 2 All ER 315 at 317 by Lord Greene MR.

16 Counsel also stated that prior to the Civil Procedure Rules 2002 ( CPR) the court's power to vary a consent order depended on which of the two types of consent order was in issue. He submitted that based on the case of Siebe Gorman and Co Ltd v Pneupac Ltd (supra), where the consent order gave effect to a real contract between the parties the court would only interfere on the same grounds as any other contract (such as misrepresentation or mistake). Where however, the consent order was one to which the parties did not object, such an order could be altered or varied by the court in the same circumstances as any other order made by the court without the consent of the parties.

17 Mr. Evans submitted that one of the issues in the instant case, is whether the order evidences a real contract between the parties or falls into the category of one made in the absence of any objection. He also sought to distinguish the principle in Siebe Gorman and Co v Pneupac Ltd (supra) on the basis that it was decided under the old English Rules of the Supreme Court.

18 In this regard, reference was made to case of Safin (Fursecroft) Ltd v Estate of Dr Said Ahmed Said Badrig (2015) EWCA Civ 739 where the principles governing the exercise of the court's discretion to extend the time for complying with a consent order were examined. In that case, the defendant failed to make the required payments on time. As a result, the claimant applied for a warrant of possession. The defendant sought to remedy the situation by paying the arrears and interest. He also paid an instalment in advance. The Court of Appeal upheld the decision of Judge at first instance to extend the time for compliance.

19 Counsel also referred to Pannone LLP v Aardvark Digital Ltd [2011] EWCA Civ 803 as authority for the principle that the court must apply the overriding objective of dealing with cases justly when it exercises any of its powers and may extend the time for compliance with any order. Mr. Evans submitted that the exercise of the court's discretion to vary a consent order is not limited to situations in which there are “unusual circumstances.” He emphasized that the exercise of the court's discretion will depend on all the circumstances. He also stated that that fact that the agreement disposed of the substantive dispute as against one dealing with case management decision is very important and decisive of the issue.

20 It was further submitted that based on the provisions of Part 26 of the CPR the court has the inherent jurisdiction to vary and/or reinstate the order in the instant case.

21 Reference was also made to the case of WA v Executors of the Estate of HA (Deceased) and others (2015) EWHC 2233 (Fam) in which the court stated that a consent order may be set aside if...