Ocean Chimo Ltd v RBTT Bank Jamaica Ltd and RBTT Bank Ltd

• Jurisdiction: Jamaica
• Judge: BROOKS J
• Judgment Date: 23 August 2011
• Judgment citation (vLex): [2011] 8 JJC 2301
• Court: Supreme Court (Jamaica)
• Docket Number: CLAIM NO. 2010 HCV 02413
• Date: 23 August 2011

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN CIVIL DIVISION

IN CHAMBERS

CLAIM NO. 2010 HCV 02413

BETWEEN

OCEAN CHIMO LIMITED

CLAIMANT

AND

RBTT BANK JAMAICA LIMITED

1 ^ST DEFENDANT

AND

RBTT BANK LIMITED

2 ^ND DEFENDANT

Mr Roderick Gordon and Ms Natalie Douglas-Charles instructed by Gordon McGrath for the Claimant.

Mr John Vassell Q.C., Mr Emile Leiba and Ms Gillian Pottinger instructed by Topaz Johnson of DunnCox for the Defendants.

Civil Procedure – Consent to file defence out of time – Time allowed expiring within the long vacation – Whether computation of time suspended by long vacation – CPR rr. 2.4, 3.5 and 10.3

Civil Procedure – Injunction – Bank seeking to appoint receiver pursuant to debenture/mortgage – Debtor seeking to sell company's asset – Whether bank should be restrained by injunction

BROOKS J

1 Ocean Chimo Limited, between 2005 and 2008, borrowed over U$30.0M from RBTT Bank Jamaica Limited and RBTT Bank Limited. As part of the security for the loan it granted mortgages over a hotel property which it owns as well as a debenture over its fixed assets. Unfortunately it has not been able to service the debts and has fallen into arrears. The banks have threatened to appoint a receiver in accordance with the terms of the debenture.

2 Ocean Chimo has accused the banks of unfair tactics and asserts that the appointment of a receiver would prejudice a sale agreement which it has for the sale of the property. It has applied for an injunction to prevent an appointment.

3 The banks have denied Ocean Chimo's allegations and assert that they are entitled to utilise the rights provided to them by the debenture; that being the agreement between the parties and the security for the loans.

4 The issues for the court to decide is whether Ocean Chimo has shown that it has a serious issue to be tried and if so whether the principles concerning the exercise of powers contained in security documents should be applied to deny any application to prohibit the banks, unless the monies which they claim are due are paid into court or otherwise paid to protect the banks' security.

A procedural point concerning filing statements of case during the long vacation

5 Before turning to those issues, however, it is necessary to address a procedural point, raised by the banks. They have applied for an order declaring that their joint defence was properly filed or in the alternative, that the time be extended for them to file the defence out of time and that the defence filed stands as properly filed. Ocean Chimo has resisted the application and filed an application of its own, for judgment in default of appearance.

6 On 12 August, after hearing submissions from counsel for each side, I ordered that the defence should stand as if properly filed. At that time I promised to put my reasons in writing. This is a fulfilment of that promise.

7 The issue arose in this way. On 8 July 2010, Ocean Chimo's then attorneys-at-law consented to the banks filing their statement of defence ‘within fifty-six days from the date hereof’. By normal calculation, the 56 days would have expired on 26 August 2010. That date would have, however, fallen during the court's long vacation; August 1 to September 15. Under the practice which previously governed civil litigation, the use of the term ‘from’, means that the given date is excluded (see Order 3 rule 2 (2) of the Supreme Court Practice 1997 (the White Book) and section 686 of the Judicature (Civil Procedure Code) Law.

8 The Civil Procedure Rules (the CPR), specifically provides for filing and serving statements of case during the long vacation. Rule 3.5 (1) stipulates that the time prescribed ‘by these Rules for filing and serving any statement of case does not run’. Counsel for the banks, Mr Leiba, submitted that, properly interpreted, the rule would cause the interruption of the calculation of the 56 days and that the count would only recommence on 16 September when the long vacation ended.

9 On that interpretation, learned counsel submitted, the 56 days would not have expired by 19 October 2010, when the statement of defence was in fact filed. On that calculation, the expiry date would have been 21 October 2010. Mr Leiba pointed to the affidavit evidence of Ms Gillian Pottinger, the attorney-at-law having partial conduct of the filing of the defence. In that affidavit Ms Pottinger deposed that she had proceeded on that understanding of the rule in filing and serving the defence.

10 Mr Gordon, on behalf of Ocean Chimo, submitted that Mr Leiba's interpretation of rule 3.5 is incorrect. Learned counsel submitted that the rule speaks to the suspension of time prescribed by the CPR. He submitted that the 56 days was not prescribed by the CPR, but by Ocean Chimo's attorneys-at-law and that the 56 days should be calculated without any interruption.

11 Mr Gordon submitted that it is rule 10.3 (5) of the CPR which is the applicable rule for these purposes. That rule stipulates that the parties may agree to extend the time ordinarily allowed for filing a defence. Rule 10.3 (7) imposes a maximum extension period of 56 days. Learned counsel argued that rule 2.4 which, among other things, stipulates that the ‘period for filing a defence’ as used in the rules ‘has the meaning given by rule 10.3’, applies to require that it is rule 10.3 that holds sway, for these purposes, rather than rule 3.5.

12 Learned counsel relied, in support of his submissions, on the cases of O'Connor v Piccott and another SCCA 33 of 2002 (delivered 7 April 2006), Lynch v Gonsalves Civil Appeal No 18 of 2005, St Vincent and Grenadines Court of Appeal (delivered 18 September 2006), and Williams and another v MZ Holdings 2007 HCV 4070 (delivered 25 July 2008).

13 I have considered the issue with much anxiety because it may have far reaching implications for other litigants. In my view, it is necessary to examine the history of the rationale for the hiatus provided by the long vacation.

14 Section 38 of Part VII of the Supreme Court General Rules and Orders, stipulated that ‘No pleadings shall be amended or delivered during the Vacation …unless directed by the Court or Judge’. That, apparently absolute, bar, was explained by Chambers J, in his informative work, Essays on the Jamaican Legal System. He pointed out, at page 129, that business during the long vacation was restricted to urgent matters. This view was also expressed by Michael Davies J in Esso Petroleum Co Ltd v Dawn Property Co Ltd [1973] 3 All ER 181.

15 Chambers J also set out the reasons for the long vacation. He quoted

from the judgment of Megarry J in Re Showerings, Vine Products and Whiteways Ltd [1968] 3 All ER 276. In that quote, Megarry J emphasised the importance of the long vacation for the efficient performance of the court's registry. Although referring to a different court in a different era, Megarry J's words are still pertinent for this court. He said at page 277:

‘The establishment of the registry is modest, and the standards of competence and reliability required pose problems in the maintenance of that establishment at full strength. The volume of work...