Wright v Bank of Nova Scotia Jamaica Ltd
| Jurisdiction | Jamaica |
| Judge | Orr, J. |
| Judgment Date | 28 July 1994 |
| Court | Supreme Court (Jamaica) |
| Docket Number | W0 82 of 1992 |
| Date | 28 July 1994 |
Supreme Court
Orr, J.
W0 82 of 1992
R. Henriques Q.C. and Edward Miller instructed by Orville Cox and Company for the Defendant/Appellant
P. Beswick instructed by Ballantyne Beswick and Company for the Respondent/Plaintiff
Practice and Procedure - Stay of Proceedings — Parties entered into a contract by which the plaintiff was appointed architect on a project in which in which the bank sought to extend a building — Plaintiff and defendant agreed in writing to refer the matter to arbitration — Whether there should be a stay of the proceedings — Finding of the court that the action was stayed on condition that the bank proceed with dispatch to do all things necessary for Arbitration Act — Costs to the defendant to be taxed or agreed.
I deeply apologise for the great delay in delivering this judgment and wish to assure everyone concerned that it is not an indication of any lack of regard for the rights of the parties, but is due rather to the pressure of work.
By clauses 1, 2 and 3 of its summons dated 19th May, 1992 the Defendant/Applicant, hereafter called the Bank, seeks an order in the following term:
“1. That at the default judgment entered herein on 28th April, 1992 be set aside.
2. That there be a stay of execution of writ of the seizure and sale issued herein on the 28th day of April, 1992; and that the monies paid to the bailiff by virtue of the writ be immediately returned to the Defendant.
1. That all further proceedings in this action be stayed pursuant to section 5 of the Arbitration Act, the Plaintiff and the Defendant having by an agreement in writing dated 10th January, 1990, agreed to refer to the arbitration of the matter in respect of which this action is brought.”
In the endorsement to his writ dated 10th April, 1992, the Plaintiff/Respondent states as follows:
“The Plaintiff's claim is against the Defendant for payment of the sum of $ 178,722.63, being the balance due and owing from the 23rd day of October, 1991, for professional services rendered by Plaintiff to the Defendant at the Defendant's request and interest thereon as agreed between the parties at the rate of 43.2 per centum, per annum, together with interest continuing at the same rate on the principal amount of $ 148,765.63.”
The Plaintiff/Respondent moved swiftly. Having served his writ, judgment in default of appearance was entered on the day after time for entering appearance had expired, and execution was levied the same day. Thereafter the bank filed a conditional appearance and brought the summons.
Mr. Beswick for the Respondents did not oppose the application to set aside the judgment, so the arguments revolved around the request for a stay of further proceedings and that the matter be referred to arbitration.
Clause 5 of the written contract between the parties reads thus:
“Any dispute or difference between the parties which may arise out of or under this agreement shall be decided by agreement between the parties and failing agreement between the parties, by a person appointed by the President of the Jamaican Institute of Architects failing such agreement by the provisions of the Jamaica Arbitration Law.”
The following matters are common ground between the parties:
The Plaintiff/Respondent Mr. Douglas Wright is an architect. On 10th January, 1990, the parties entered into a contract by which Mr. Wright was appointed architect on a project in which the Bank sought to extend the building at its Half Way Tree Branch
The contract contained the arbitration clause set out above.
On 29th July, 1991, Mr. Wright submitted an invoice indicating what he considered The current billing status of the project. There was some discussion of the invoice between Mrs. Glllian Sharpe, an employee of the Bank and Mr. Wright; but the extent of the discussion and the number of conversations are in dispute. The Bank did not agree with his method of calculating his fees.
On 30th July, 1991, Mrs. Sharpe wrote on behalf of the Bank, to the President of the Jamaica Institute of Architects outlining the issues in dispute and without naming the firm of Architects involved, asked his advice as to the correct procedure so that we can determine a fair and equitable consultancy fee to be charged to this project.
In the meanwhile on the 23rd August, 1991, Mrs. Sharpe wrote to Mr. Wright enclosing a cheque in the sum of $ 107,537.77 for fees for this project. The penultimate paragraph reads
“As discussed we have requested guidance from the Jamaica Institute of Architects with respect to the fees for this project. Until their reply is received, we enclose the above mentioned sum as an interim payment for your services to date.”
By letter dated 3rd September, 1991, Mr. Victor Patterson who was then the President of the Jamaican Institute of Architects replied to Mr. Sharpe. He said he had consultations with members of the Practice Committee of the Jamaican Institute of Architects and a number of senior architects. In that letter he expressed an opinion which supported Mr. Wright's position.
On 9th October, 1991, the Bank wrote a letter terminating Mr. Wright's services and requesting a final invoice. Mr. Wright submitted such an invoice for $ 420,681.05 by letter dated 23rd October, 1991.
On 25th November, 1991, Mrs. Sharpe spoke to Mr. Marvin Goodman, an Architect seeking his advice as to the proper basis on which Mr. Wright should be paid. He replied by letter dated 13th December, 1991. He indicated that he had met with Miss Isaacs, an Architect, and they had agreed on the basis on which Mr. Wright should be paid. This letter supported the Bank's position.
On 18th December, 1991, the Bank wrote to Mr Wright and enclosed a cheque for $ 230,811.50 on the understanding that same is in full and final settlement of his invoice for services rendered. Mr. Wright replied by letter dated January 17, 1992, acknowledging the receipt of the cheque as part payment only.
I do not regard it as necessary to indicate the areas of disagreement on the facts leading up to the bringing of the action as the concern now is whether there should be stay of the proceedings.
Section 5 of the Arbitration Act sets out the provisions governing the power of the Court to grant a stay of proceedings. It is couched in the following terms:
“If any party to a submission, or any person claiming through or under him, commences any legal proceedings in the Court against any other party to the submission, or any person claiming through or under him, in respect of any matter agreed to be referred, any party to such legal proceedings may at any time after appearance, and before delivering any pleading or taking any other steps in the proceedings, apply to the Court to stay the proceedings, and the Court or a Judge thereof, is satisfied that there is no sufficient reason why the matter should not be referred in accordance with the submission, and that the Applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, may make any order staying the proceeding.” (Emphasis mine)
By Section 2 submission means a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not.
I will now set out the obligations which section 5 of the Arbitration Act places upon the Applicant, and the Court, when a party seeks a stay of proceedings under the section
The Applicant must prove the following:
- That a valid arbitration agreement exists, that is, that there is a written agreement to submit present or future differences to arbitration. 2. That the proceedings which he seeks to have stayed are of a type to which the section applies, this involves proof that: a) They are legal proceedings commenced in a Court. b) They are brought in respect of matters agreed to be referred to arbitration. c) They are brought by a party to the arbitration agreement or a person claiming through or under such a person. 3. That the Application is made in an appropriate manner, that is, a) The Applicant is a party to the arbitration agreement or a person claiming through or under such a person. b) The Applicant is a party to the legal proceedings c) The Application is made after the Applicant has entered an appearance but before he has delivered any pleading or taken any other steps in the proceedings.
The Court must be satisfied that -
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a) The Applicant was and is ready and willing to do all things necessary to the proper conduct of the arbitration;
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b) There is no sufficient reason why the dispute should not be referred to arbitration.
The arguments have centered on the following three issues, it being obvious that the other conditions were satisfied:
- ) Whether the Bank has taken a step in the proceedings, 2) Whether the Bank has shown itself ready and willing to go to arbitration. 3) Whether there is no sufficient reason why the dispute should not be referred to arbitration.
As noted above, section 5 of the Arbitration Act, which is similar to its English equivalent, provides that an application for a stay may be made after appearance and before delivering any pleading or taking any other steps in the proceedings. Mr. Beswick submits that in filing an application to set aside the judgment, the Bank has taken a step in the proceedings and this puts it outside the protection of the section.
Two brief points may be noted here. Firstly, the application for a stay must be made timeously. ( Turner & Goudy v. McConnell [1985] 2...
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