Williams (Deltonia) and Whithorn Development Company Ltd v M.Z. Holdings Ltd; M.Z. Holdings Ltd v Deltonia Williams and Whithorn Development Company Ltd [Consolidated claims]

• Jurisdiction: Jamaica
• Judge: Mangatal, J:
• Judgment Date: 25 July 2008
• Judgment citation (vLex): [2008] 7 JJC 2501
• Court: Supreme Court (Jamaica)
• Date: 25 July 2008

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

CLAIM NO. HCV 01343/ 2005

BETWEEN

DELTONIA WILLIAMS

CLAIMANT

AND

WHITHORN DEVELOPMENT COMPANY LIMITED

2 ^ND CLAIMANT

AND

M.Z. HOLDINGS LIMITED

DEFENDANT

AND

BETWEEN

M.Z.HOLDINGS LIMITED

CLAIMANT

AND

DELTONIA WILLIAMS

1 ^ST DEFENDANT

AND

WHITHORN DEVELOPMENT COMPANY LIMITED

2 ^ND DEFENDANT

CIVIL PROCEDURE - Consent Order - Application to set aside - Whether application to be made in old suit or new claim - Grounds for setting aside - Whether same basis for setting aside contract

Consent order - Application to Set Aside - Whether Application to be made in old Suit or in new Claim - Grounds for Setting Aside - Whether Same Basis for Setting Aside Contract

Mangatal, J

On the 11 ^th October 2007 my sister Mrs. Justice Sinclair-Haynes ordered the applications in these two Suits to be heard together.

1 In Claim No. HCV 01343/ 2005 the application by Mr. Williams and Whithorn Development is by Notice of Application for Court Orders filed November 9 2006 seeking to set aside and vacate the Consent order entered by the parties in that Suit on May 24 2005. In Claim No. HCV 04070 / 2007 Mr. Williams and Whithorn Development by way of relief sought in fresh proceedings by way of Fixed Date Claim Form seek a declaration that the Consent order entered on May 24 2005 is vacated and set aside.

2 In the 2005 Claim M.Z. Holdings on the 4 ^th October 2006 filed a Request for Entry of Judgment as follows:

The Claimant requests entry of judgment against the Defendants per the Court Order of this Honourable Court dated May 24, 2005 as follows:

JUDGMENT ON THE WHOLE DEBT

• A. The sum of $ 5, 671, 989.50 being the debt admitted by the Defendants under the Court Order.

• B. Possession of the Cool Oasis Petrol Station situated at Whithorn in the Parish of Westmoreland for the management of the station pursuant to the Court Order dated May 24, 2005.

BACKGROUND

3 In the 2005 Claim M.Z.Holdings Limited "M.Z.Holdings" had sued Mr. Williams and Whithorn Development for the sum of $9,886,823.20 in respect of promissory notes and interest, and in respect of petrol and petroleum products supplied, breach of contract and interest at commercial rates.

4 M.Z. Holdings was at all times material to the 2005 Claim a limited liability company incorporated under the Companies Act and carried on the business of marketing and wholesaling petroleum products under the "Cool Oasis" brand.

5 Deltonia Williams and Whithorn Development were at all times material to the 2005 Claim operators of a gasoline service station located at Whithorn, in the Parish of Westmoreland, under the brand name "Cool Oasis" pursuant to a Motor Fuels Franchise Agreement dated October 21, 2003.

6 On the 24 ^th of May 2005 this matter came on for hearing before my brother Mr. Justice Marsh at which time it was ordered as follows:

IT IS HEREBY ORDERED BY CONSENT:

• 1. Commencing the 25 ^th day of May 2005, the Defendants will continue to operate the petrol station and to purchase petroleum and petroleum products exclusively from the Claimant by paying cash on delivery by Managers cheque in accordance with the existing Motor Fuel Franchise Agreement. On the second delivery and all deliveries thereafter the Defendants will pay an additional amount of fifty thousand dollars ($50,000.00) until the trading arrears of Three Million, Eight Hundred & Ninety-six Thousand Eight Hundred and Seventy-three Dollars & Thirty-eight Cents ($ 3, 896, 873.38) is paid in full.

• 2. Upon payment in full of the trading arrears, the parties will agree a monthly payment schedule to liquidate the loan of Five Million, Six Hundred & Seventy-one Thousand, Nine Hundred & Eighty-nine Dollars & Fifty Cents ($5, 671,989.50) outstanding with interest as agreed.

• 3. The Defendants agree to grant to the Claimant full management of the station in the event the Defendants fail to meet the terms of this order set out at item (1) above.

• 4. The consent order to be signed by both Counsel and filed within 7 days hereof.

• 5. No order as to cost

6 It is Mr. Williams' and Whithorn Development's contention that the parties have since the entry of the Consent order, by agreement, and by their own actions, varied the Consent order. In so doing without the court's permission, they argue, both parties have breached the order and it ought therefore to be discharged. It is on this basis that these parties seek the declaration and/ or relief sought.

7 Mr. Williams, the Managing Director of Whithorn Development, in one of his Affidavits indicates that at first the parties adhered to the terms of the Consent Order, however over time, he was paying the $50,000.00 from his pocket, because the quantities of fuel he ordered were not sufficient to generate profit of $50,000.00 to meet the payments towards the arrears. Also, he states that even when he ordered fuel during that period, M.Z.Holdings would send him quantities of fuel that were different from what he ordered, thereby making it difficult for Mr. Williams to arrange his fuel orders in an orderly manner.

8 Mr. Williams in addition claims that some months after the Court order he and M.Z. Holdings agreed that instead of Mr. Williams paying for fuels on a cash-on-delivery basis, payment would be accepted on a "load-over-load" basis. "Load-over-load" means taking fuel and paying for that load after it is sold, which amounts to payment on a credit basis. Mr. Williams indicates that in addition, he also instead of paying $50,000.00 per delivery towards the arrears, paid M.Z. Holdings amounts varying between $10,000.00 and $33,000.00 depending upon what the load delivered to him permitted him to pay towards the arrears.

9 This arrangement continued until September 2006 when Mr. Williams decided to close the retail fuel sale business. He was promised that M.Z.Holdings would give him a payment plan to liquidate the indebtedness by September 7 2006. Instead, however, of presenting a payment plan, M.Z. Holdings went to the property with security and police and locked Mr. Williams' staff in the separate convenience store business which, although separate and apart from the fuel sale business, is located on the same property as the station.

10 In support of the claim that the Consent order has been varied and /or breached by the parties, Mr. Williams claims that he made several settlement proposals to M.Z.Holdings and that he believes that the latter does not want to accept installment payments from him because their ultimate goal is to possess and take full and sole control of the property and the station. Certain documents are exhibited, which Mr. Williams and Whithorn Development rely on as demonstrating the variation and /or breach.

11 On the other hand, Mr. Blair Gonsalves, Managing Director of M.Z. Holdings states that by terminating the operation of the petrol station, Mr. Williams and Whithorn Development have breached the court order and that gives M.Z. Holdings the right to take over full management of the station.

12 Mr. Brady, Attorney-at-Law with conduct of the matter on behalf of M.Z. Holdings, in his Affidavit indicates that there were arrangements made between the parties in November 2005 to assist Mr. Williams and Whithorn Development in liquidating their debts and making timely payments, after the latter parties had failed to adhere to the terms of the court's order. Mr. Brady makes reference to a letter which he wrote on behalf of M.Z. Holdings dated August 4 2005 in which M.Z. Holdings agreed to waive the $50,000.00 payment due in August and to accept $10,000.00 instead. However, as Mr. Brady points out, the letter closes with the following paragraph:

The foregoing waiver is not a discharge or variation of the terms and conditions of the Order of the Court dated May 24, 2005.

Procedural Issue-Whether Application to Set Aside to Be Made in Original Claim Or In Fresh Claim

13 In my judgment, one of the first questions that arises is procedural and revolves around the question whether the...