Singh (Rahul), Commonwealth Communications Ltd and Ocean Petroleum U.S.A. Inc. v Kingston Telecom Ltd and Cable & Wireless (Jamaica) Ltd Ocean Petroleum U.S.A. Inc. v Kingston Telecom, Rahul Singh and Commonwealth Communications Ltd [Consolidated Suits]

• Jurisdiction: Jamaica
• Judge: SMITH, J.A.: , HARRISON, J.A: , G. SMITH, J.A. (Aq.)
• Judgment Date: 10 July 2009
• Neutral Citation: JM 2009 CA 65
• Judgment citation (vLex): [2009] 7 JJC 1002
• Court: Court of Appeal (Jamaica)
• Date: 10 July 2009

JAMAICA

IN THE COURT OF APPEAL

BEFORE:

THE HON. MR. JUSTICE SMITH, J.A THE HON. MR. JUSTICE HARRISON, J.A THE HON. MISS JUSTICE G. SMITH, J.A (Ag)

BETWEEN

RAHUL SINGH

1 ^st APPELLANT

AND

COMMONWEALTH COMMUNICATIONS LTD.

2 ^nd APPELLANT

AND

OCEAN PETROLEUM U.S.A INC.

3 ^RD PARTY INTERVENOR/ 3 ^rd APPELLANT

AND

KINGSTON TELECOM LIMITED

1 ^st RESPONDENT

AND

CABLE & WIRELESS JA. LIMITED

2 ^ND RESPONDENT 4 ^TH PARTY INTERVENOR

AND

SCCA NO 25/2005

AND

OCEAN PETROLEUM U.S.A INC.

APPELLANT

AND

KINGSTON TELECOM LIMITED

1 ^st RESPONDENT

AND

RAHUL SINGH

2 ^ND RESPONDENT

AND

COMMONWEALTH COMMUNICATIONS LIMITED

3 ^RD RESPONDENT

W. Spaulding Q.C. and Mrs. Jeanne Barnes instructed by Jeanne Barnes for the Appellants.

Gordon Robinson and Harold Brady instructed by Messrs Brady & Co. for 1 ^st Respondent.

Miss Hilary Philips, Q.C. and Kevin Williams instructed by Yolande Christopher of Grant, Stewart, Phillips & Co. for 2 ^nd Respondent/4 ^th Party Intervener.

CIVIL PROCEDURE - Default judgment - Leave to set aside - Stay of execution - Breach of contract - Breach of fiduciary duty - Damages - Whether default judgment wrongly entered

SMITH, J.A.:

1 This is an appeal against the judgment of Campbell J delivered on the 17 ^th May, 2006 whereby he made the following orders:

"1. The 2 ^nd and 3 ^rd Defendants' (now appellants) application

• (a) The application to set aside judgment in default entered on the 17 ^th day of February 2005 is refused.

• (b) The application for a Stay of Execution of any process arising from the Default Judgment is refused.

• (c) Application for stay pending further order is refused.

• (d) Application for discharge of freezing order and striking out of claim refused.

2. Application by Cable and Wireless Limited

• (i) Cable and Wireless be joined as a 4 ^th party/intervener to this suit.

• (ii) That the defendants, heirs, servants and/or agents be restrained from dealing with any assets whether located within the jurisdiction or not.

3. Application by Ocean Petroleum

• (1) That the application for a Stay of Execution of any process to execute any judgment of the Court which could access the money is refused.

• (2) That the Order of the Court of the 27 ^th July 2004, freezing the sum of $630,000.00 in the account of Rahul Singh and Rohit Singh 'until trial' has been determined by the default judgment."

As the orders indicate there were three (3) applications before Campbell J. I will return to this later.

2 The 1 ^st Appellant, Mr. Rahul Singh is an American and was a shareholder and the managing director of the 2 ^nd Appellant, Commonwealth Communications Ltd (CCL) which is a company incorporated in Florida, U.S.A. The 3 ^rd Appellant/3 ^rd Party Intervener, Ocean Petroleum Inc. (OPI) is incorporated in the U.S.A. Mr. Singh is a shareholder of OPI. The 1 ^st Respondent (in both appeals) Kingston Telecom Ltd. (KTL) is a licensed telecommunications carrier incorporated under the laws of Jamaica. Mr. Singh is also a director of KTL. The 2 ^nd Respondent (4 ^th Party Intervener in appeal No. 48/2006), Cable & Wireless Jamaica Ltd. (C&WJ) is a company incorporated under the laws of Jamaica.

3 Background

On December 15, 2003 KTL filed a Claim Form and Particulars of Claim against Mr. Singh and CCL claiming a sum of US $1.8M being the estimated amount due and owing to KTL pursuant to a contract and damages for breach of fiduciary duties and breach of contract. The claim will be set out fully later in this judgment. On December 17, 2003, Marsh J granted a Freezing Order on the ex parte application of KTL restraining Mr. Singh, CCL and one Mr. Dahari (not a party in this appeal) from disposing of assets up to a limit of $1.8M for 28 days. The appellants (Singh & CCL) were served with the Claim Form and Particulars of Claim on December 20, 2003. On January 9, 2004 they filed an acknowledgment of service. They did not file a defence. On January 14, 2004 James J, varied the Freezing Order to add KTL's undertaking as to damages and to permit Singh, CCL and Dahari, to use such sums as would be required for normal living expenses as well as legal fees. The application for a Freezing Order pending the trial of the Claim was adjourned to February 2, 2004, when it first went before Rattray J. On July 27, 2004, Rattray J granted the application thereby freezing funds in the National Commercial Bank (NCB) in the joint names of Mr. Singh and his brother Robit (who is not a party to the suit) until the trial of the action. In October, 2004 OPI sought to discharge the freezing order on the ground that the money which the Freezing Order affects is not the property of either Mr. Singh or CCL but is being held in trust for OPI. On January 16, 2005 Norma Mcintosh J refused the application to discharge the Freezing Order. There is an appeal against this Order.

4 On February 17, 2005 a judgment in default of defence was entered against Mr. Singh and CCL in the sum of $2,033,166.32. with interest at the rate of 12% per annum from the date of judgment, together with court fees and attorney's fees of $26,000.00. On April 13, 2005 the following applications went before Campbell J.:

On May 17, 2006 Campbell J made the order to which I referred at the outset. He granted leave to appeal and a stay of execution for 3 weeks.

• (a) An application by Mr. Singh and CCL to set aside the default judgment, to stay execution of any process arising from the said default judgment, to stay proceedings pending further order of the court and that the appellants be granted such further and other reliefs which the Court considers just and appropriate including leave to file a defence if the court deems it necessary.

  At the hearing the applicants sought two further orders, namely, that the freezing order be discharged and that the claim be struck out.

• (b) An application by CWJ for orders that the applicant be joined as 4 ^th Party Interveners, that Mr. Singh, CCL and Mr. Dahari be restrained from dealing with any assets and that the costs of the application be paid by Mr. Singh and or by OPI.

• (c) An application by OPI for a stay of execution of the order of Norma Mcintosh J made January 16, 2005 pending the appeal of that order.

5 On Appeal

Some eight (8) grounds of appeal were filed. Grounds 1 to 7 relate to the 1 ^st Respondent/Claimant KTL. Only ground 8 applies to the 2 ^nd Respondent/ 4 ^th Party Intervener, CWJ. For economy of presentation, the grounds were argued in groups based on the issues to which they relate.

6 Grounds 1 (ii) and (V), 3 (i) and (iii) and 4

The complaint is that the learned judge erred in refusing to set aside the default judgment. The issue raised by these grounds is whether the default judgment was wrongly and/or irregularly entered. Mr. Spaulding Q.C. for the appellants contends that the default judgment is irregular and or defective in that:

• (a) The money claimed, US$1.8M, was clearly subject to being reduced by an amount for equipment, the value of which has not been ascertained. Thus, he says, the claim is for an unspecified sum and is subject to assessment in accordance with rules 12. 10 (1) (b) and 16.2 of the Civil Procedure Rules 2002 (C.P.R).

• (b) The Claim Form is in conflict with the Particulars of Claim and the claim is without basis in fact and in law.

7 Mr. Robinson for the respondent, KTL, submits that the default judgment was entered pursuant to Rule 12.5 of the CPR and satisfied all the conditions set out therein. Campbell J, he says, was not obliged to set it aside unless the appellants comply with the provisions of Rule 13.3 of the...