Michael Drakulich v Karibukai Ltd

• Jurisdiction: Jamaica
• Judge: Palmer Hamilton J
• Judgment Date: 09 September 2021
• Court: Supreme Court (Jamaica)
• Docket Number: CLAIM NO. SU2020CD00413

[2021] JMCC Comm. 32

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

CLAIM NO. SU2020CD00413

In the Matter of the Companies Act 2004

and

In the Matter of s. 213A(2)(a), s. 213A(2)(b) and 213A(2)(c) of the Companies Act.

Between:

Michael Drakulich

1 ^ST Claimant

Max Patchen

2 ^ND Claimant

Milverton Reynolds (Notice of Discontinuance filed by 3 ^rd Claimant on 12 ^th February 2021)

3 ^RD Claimant

Norma Clarke

4 ^TH Claimant

John Dalton

5 ^TH Claimant

and

Karibukai Limited

1 ^ST Defendant

Rainforest Adventures (Holdings) Limited

2 ^ND Defendant

Mystic Mountain Limited

3 ^RD Defendant

IN CHAMBERS

M. Georgia Gibson Henlin, QC, Stephanie Williams and Peta-Shea Dawkins instructed by Henlin Gibson Henlin for the Claimants

Sandra Minott Phillips, QC, Simone Bowie-Jones Stephanie Ewbank and Shaniel May instructed by Myers Fletcher & Gordon for the 1 ^st and 2 ^nd Defendants

Janet Morrison instructed by Hart Muirhead and Fatta for the 3 ^rd Defendant

Judges of Concurrent jurisdiction — Equal power and authority — Power to set aside or review only in exceptional circumstances — Purview of the Court of Appeal — Res judicata

Palmer Hamilton J

THE APPLICATION

1 By virtue of their application for summary judgment filed on the 26 ^th day of May, 2021, the 1 ^st and 2 ^nd Defendants, inter alia, raised a point in limine concerning the jurisdiction of this Court to hear and determine the Claimants' application (the content of which will be examined later on in this decision), filed on the 16 ^th March 2021. The 1 ^st and 2 ^nd Defendants objected on the premise that Batts J finding that he is satisfied that the Claimants' claim contains no serious issues for trial and that bare assertions, unsupported by credible evidence and contradicted by undisputed documentation, may not suffice to create a triable factual issue cannot be disturbed by a Court of concurrent jurisdiction. Given the significance and implication of this jurisdictional point, however resolved, this Court thought it prudent to address it before proceeding on the Claimants' application. Accordingly, this judgment is concerned with a careful assessment and determination of this preliminary objection.

BACKGROUND

2 The parties herein are embroiled in a dispute over the management of the 3 ^rd Defendant, a private company with limited liability and located in Ocho Rios in the parish of St. Ann. The Claimants herein are former directors of the 3 ^rd Defendant. The 1 ^st Claimant is also former Chairman of the Board and former Chief Executive Officer of the 3 ^rd Defendant. The 1 ^st Defendant (domiciled in St. Lucia) is the sole shareholder in the 3 ^rd Defendant. The 1 ^st, 4 ^th and 5 ^th Claimants are minority shareholders in the 1 ^st Defendant and the 2 ^nd Defendant (domiciled in the British Virgin Islands) is the majority shareholder in the 1 ^st Defendant. Josef Preschel, whose witness statement was filed on the 28 ^th day of May 2021, is the President of the 2 ^nd Defendant and Secretary of the 3 ^rd Defendant. He is also a Director of all 3 Defendants.

3 This matter had its genesis in an Amended Fixed Date Claim Form (hereinafter referred to as AFDCF) and a Further Amended Notice of Application for Court Orders supported by an affidavit, filed on the 7 ^th October, 2020. In their AFDCF, the Claimants sought the following Declarations (inclusive of the injunctive relief listed below), that:

• (1) the 1 ^st and 2 ^nd Defendants as affiliates of the 3 ^rd Defendant have acted in a manner that effects or is intended to effect a result that unfairly disregards, is oppressive or unfairly prejudicial to the Claimant as director, officer and/ or creditor of the 3 ^rd Defendant;

• (2) the 1 ^st and 2 ^nd Defendants as affiliates of the 3 ^rd Defendant have conducted or carried on or intend to conduct or carry on the business of the 3 ^rd Defendant in a manner that unfairly disregards, is oppressive or unfairly prejudicial to the Claimant as the director, officer and/ or creditor of the 3 ^rd Defendant; and

• (3) the powers of the directors or representatives of the 1 ^st and/ or 2 ^nd Defendants as affiliates of the 3 ^rd Defendant have been exercised conducted or carried on or that they intend to conduct or carry on the business of the 3 ^rd Defendant in a manner that unfairly disregards, is oppressive or unfairly prejudicial to the Claimant as the director, officer and/ or creditor of the 3 ^rd Defendant.

4 In their further amended application, the Claimants applied for injunctive relief which was earlier sought in their Amended Notice of Application filed on the 24 ^th September, 2020. On the 25 ^th September, 2020, injunctive relief was granted on the Amended Notice of Application for Court Orders by my learned brother Batts J until 9 ^th October, 2020, in the following terms:

• (1) The 1 ^st and 2 ^nd Defendants, whether by themselves, their servants, agents or otherwise howsoever, are restrained from interfering in the operations of the 3 ^rd Defendant including but not limited to the restructuring of the Seven Year Global Bond (issued pursuant to the Trust Deed dated the 28 ^th September 2018 between the 3 ^rd Defendant and the JCSD Trustee Services Limited) which shall include finalizing the documents required pursuant to the restructure arrangement agreed on or around May 2020 with the bondholders until the 9 ^th October 2020 or further order of the Court;

• (2) The 1 ^st and 2 ^nd Defendants are restrained whether by themselves, their servants, agents or otherwise however, from interfering in the operations of the 3 ^rd Defendant including but not limited to directing Josef Preschel to vote or causing Josef Preschel to procure the Board of the 3 ^rd Defendant to vote in a manner that favours the directives or interest of the 1 ^st and 2 ^nd Defendants, to the exclusion of the Claimant and/ or the 3 ^rd Defendant's directors or as set out in the proposed resolution no. 1 of the members meeting of the 1 ^st Defendant fixed for 11:00 am St. Lucia time until the 9 ^th October 2020 or further order of the Court;

• (3) That 1 ^st and 2 ^nd Defendants by their servants and/ or agents including Josef Preschel are restrained from requesting the 3 ^rd Defendant's information other than through the directors of the 3 ^rd Defendant including the Claimant as Director and Chief Executive Officer until 9 ^th October 2020 of further order of the Court;

• (4) The 1 ^st and 2 ^nd Defendants are restrained from interfering in the operations and Claimant's management of the 3 ^rd Defendant or from implementing or causing to be implemented their resolutions to appoint directors selected by it or with a view to the controlling the 3 ^rd Defendant's Board and/ or to act in a manner that directs the appointment of directors other than in accordance with the 3 ^rd Defendant's Articles until the 9 ^th October 2020 or further order of the Court including:

• (a) Proposed Resolution 6 — the company, as sole shareholder of MML, be able to take all necessary steps/ procedures, including, but not limited to, the passing of any resolutions, to ensure that the Board of MML is comprised of the following directors:

  • (i) Albino Rodriguez Aguilar;

  • (ii) Alexander Jose Rodriquez Bonilla;

  • (iii) Teresa Malpassi;

  • (iv) Nilka Gomez Quiroz;

  • (v) Rossana del Carmen Alvarado Escala; and

  • (vi) Josef Preschel.

• (5) The 1 ^st and 2 ^nd Defendants are restrained from interfering in the operations and/ or the Claimant's management of the 3 ^rd Defendant or from implementing or causing to be implemented their resolutions to affect the management and operations of the 3 ^rd Defendant or with a view to controlling the 3 ^rd Defendant's Board and/ or to act in a manner that directs the appointment of directors or removal of the Claimant as Chief Executive Officer or the Chairman of the Board until the 9 ^th October 2020 or further order of the Court including as follows:

• (a) Proposed Resolution 7 — the appropriate shareholder/ or directors of the resolutions be passed at the end and a level to reflect the following:

  • (i) that the company hereby confirms and approves that the operations of an end and shall be managed in the manner as set out in the document entitled “Who Decides What” (attached to the Notice of Meeting to be held of the 25 ^th September 2020” as Appendix 1);

  • (ii) that at least two (2) authorized signatories of MML, one of which shall be the General Manager, namely Ryan Peart, be required to sign any cheques drawn from the accounts of MML and the Secretary be and is hereby authorized to indicate on the mandate give to the bank(s) at which MML's accounts are held, that at least two (2) authorized signatories shall sign any cheque drawn from the accounts, with at least one signatory being Ryan Peart;

  • (iii) that the accounts of MML shall be managed in the manner as set out in the document entitled “Account Management” [attached to the notice Appendix 2] and the Secretary be and is hereby authorized to send to any such banks such mandate as agreed;

  • (iv) that the appointment of Josef Preschel as Director of MML be ratified and that he now be named Interim Managing Director and that the Secretary of MML and/ or such other person as is authorized will do all that is required to effect to the terms of his appointment;

  • (v) that Michael Drakulich be removed as Chairman of the Board of Directors of MML and an interim Chairman be appointed as agreed to by a majority of the Board of Directors of MML and such interim Chairman shall remain Chairman until the conclusion of the buy/ sell negotiation among the shareholders of Karibukai or unless otherwise agreed by a majority of the board of directors of MML;

  • (vi) that MML hereby removes the position of Chief Executive Officer, and that the positions of General Manager of MML job description be approved as stated in the document entitled “Job Descriptions” (attached to the notice as appendix 3);

  • (vii) that Michael Drakulich shall not have the power to solely...