IN THE HIGH COURT OF JUSTICE IN THE MATTER OF EASTERN CREDIT UNION CO-OPERATIVE SOCIETY LIMITED AND IN THE MATTER OF THE COMPANIES ACT 1995 BETWEEN
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1 REPUBLIC OF TRINIDAD AND TOBAGO IN THE HIGH COURT OF JUSTICE Claim No. CV IN THE MATTER OF EASTERN CREDIT UNION CO-OPERATIVE SOCIETY LIMITED AND IN THE MATTER OF THE COMPANIES ACT 1995 BETWEEN HARVEY BORRIS Claimant AND EASTERN CREDIT UNION CO-OPERATIVE SOCIETY LIMITED Defendant BEFORE THE HONOURABLE JUSTICE JOAN CHARLES Appearances For the Claimant: Mr. Lemuel Murphy and Mr. Christian Chandler For the Defendants: Mr. Kevaughn Mattis (holding for Mr. F. Scoon) and Ms. Carrie Ann Griffith Date of Delivery: March 23, 2016 RULING 1
2 PROCEDURAL HISTORY 1. By Fixed Date Claim Form dated November 23 rd, 2015 the Claimant instituted proceedings against the Defendant Society in relation to his dismissal by the Defendant from his employment as an Executive Director of the Defendant Society and as a Director of EPL Properties Limited, a subsidiary company of the Defendant. 2. The Claimant pleaded that the Defendant Society verbally terminated his employment as a Director of EPL Properties Limited at a meeting on November 9 th, 2015 and thereafter by letter dated November 19 th, His employment was terminated as an Executive Director on November 18 th, In addition to the Fixed Date Claim Form, the Claimant filed a Notice of Application for interim relief ex parte seeking the following relief: (i) (ii) An interim Injunction restraining the Defendant, whether by itself, its servants and/or agents or howsoever otherwise until the hearing and determination of this action or further order in the meantime from doing the following acts that is to say: - removing or dismissing directors of EPL Properties Limited or making any resolutions as such to remove or dismiss directors of EPL Properties Limited or removing or dismissing directors of Eastern Credit Union Cooperative Society Limited or making any resolutions as such to remove or dismiss directors thereof; An Interim Injunction mandating the Defendant to carry out the Special General Meeting carded for Wednesday 25 th November 2015 as originally advertised by the President Ms. Alana Blackman and its Agenda which was illegally cancelled; 2
3 (iii) (iv) (v) (vi) (vii) An Interim Injunction prohibiting the Board of Eastern Credit Union from holding any Board Meetings until after the execution of the Special General Meeting carded for Wednesday 25 th November, 2015; A Declaration that the current Executive Committee of Eastern Credit Union Cooperative Society Limited is illegal; A Declaration that the Claimant was unlawfully dismissed A Declaration that the status quo of the Board should return to its composition prior to the meeting held on Wednesday 18 th November, 2015 A Declaration that the decision to remove and/or the removal of the Claimant as a director of EPL Properties Limited was exercised in a manner that was oppressive and/or unfairly prejudicial to and/or unfairly disregarded the interests of the Claimant as a director and shareholder of the Company (viii) That the Defendant do pay to the Claimant such damages as he may have sustained by the said acts of the Defendant (ix) (x) Such further and/or other reliefs as the Court may think fit Costs. 4. On November 20 th, 2015, Rampersad J made an order granting an interim injunction in the terms contained in paragraph (i) of the Notice of Application. In addition, the Court made an order that the Claimant s Statement of Case be filed and served upon the Defendant or before December 4 th, On December 7 th, 2015, Counsel for the Claimant, Mr. Chandler, filed a Notice of Application together with an affidavit praying for an extension of time 3
4 within which to file the Claimant s Statement of Case. I gave permission to the Defendant to file and serve an affidavit in response to the Claimant s affidavit on or before December 21 st, Permission was also granted to the Claimant to reply with respect to any new legal issues on or before January 4 th, The subsequent hearing was carded for January 15 th, The Claimant filed his Statement of Case on December 7 th, 2015 and Mr. Wayne Estrada, a Director of the Defendant Society, filed his Affidavit in response on December 21 st, The Claimant, thereafter, filed an affidavit in reply to Mr. Estrada s affidavit on January 4 th, THE HEARING Defendant s Oral Submissions 7. At the hearing dated January 15 th, 2016, Counsel for the Defendant raised a preliminary point that the Court does not have jurisdiction to hear and determine this matter by virtue of section 67 (1) of the Co-operative Societies Act Ch. 81:03 ( the Act ) 1 and as such the matter should be struck out and dismissed. 8. Counsel argued that the Court must look to the objects of the Defendant in order to determine whether the claim before me touches the business of the Defendant society. He further submitted that in order to determine this issue I must also have regard to Section 3(b)iii of the bye-laws of the Defendant company and Section 18(g)(a.vi) which provides: 1 Section 67 of the Act reads as follows: 67. (1) If any dispute touching the business of a society arises (d) between the society or its board and any officer of the society; 4
5 It shall be the duty of the Board to be responsible for the overall management of the affairs of the Society and in particular to have charge of investments and all property of the Society. 9. He argued that it is necessary to have regard to the powers which were vested in the Claimant as Director of the subsidiary company, the relationship of these powers to the objects, in order to determine whether the termination of the Claimant was related to the powers he exercised, and whether such powers touch and concerned the business of the Defendant Society. 10. Mr. Mathis, on behalf of the Defendant argued further that the Claimant was the Executive Director of the Defendant Society and the Director of EPL Properties Limited. In addition to these two positions the Claimant was also the chairman of the Housing Implementation Committee. As the chairman of the Housing Implementation Committee and Director of EPL Properties Limited, the Claimant was involved in the purchase and acquisition of real estate in furtherance of the objects of the Defendant Society, the sole shareholder of EPL Properties. Counsel contended that the purchase and acquisition of property touched and concerned the business of the Defendant Society. It is not in dispute that it was the Claimant s involvement in the events leading up to purchase of the Las Viviendas Development that formed the backdrop to the Claimant s dismissal as Director of the EPL Properties Limited and as Executive Director of the Defendant Company. 5
6 11. Mr. Mathis submitted that the Claimant was dismissed in the course of carrying out his duties as Director of EPL Limited. These duties which include the purchase and acquisition of real estate in furtherance of the objects of the Defendant touched and concerned the business of the society. As a result Section 67(1) of the Act is applicable and it operates to oust the jurisdiction of the Court. Claimant s Oral Submissions 12. The main thrust of the Claimant s submissions is that the termination of the Claimant is not a dispute that touches the business of the Defendant for the purpose of Section 67(1) of the Act so as to oust the jurisdiction of the Court because there is no connection between the stated objects 2 of the Society and the conduct of the Defendant in terminating the Claimant s directorship. Counsel submitted that the issues that fall to be determined in this case are inter alia whether: a. the Defendant breached the terms of its employment contract with the Claimant, b. the dismissal of the Claimant by the Defendant was unfair 2 The objects of the Defendant Society as outlined in Section 3 of their bye-laws as follows: (a) (b) To improve the economic and social conditions of its members by: i. Promoting thrift and saving among its members (using shares and other instruments); ii. Providing loans to members for provident and product purposes (as defined in the Loan Policy); and iii. Providing such services as the Board sees fit from time to time. To encourage the spirit and practice of self-help and co-operation and promote the development of co-operative ideas by: i. Educating members in co-operative philosophy, principles and practices; ii. Affiliating or collaborating with any other Society or Organization; and iii. To do all such lawful things as are incidental or conducive to the attainment of the above objectives. 6
7 13. He argued that the proper forum for the determination of these issues is the High Court and that the jurisdiction of the Court is not ousted by Section 67 of the Act. LAW 14. Section 67 of the Act reads as follows: 67. (1) If any dispute touching the business of a society arises (a) among members, past members and persons claiming through members, past members and deceased members; (b) between a member, past member, or person claiming through a member, past member or deceased member, and the society, its board or any officer of the society; (c) between a member and the society arising out of or under any bye-law or bye-laws relating to the disposal of the produce of agriculture or animal husbandry, or under any contract, made under section 27; (d) between the society or its board and any officer of the society; (e) between the society and any other society; or (f) between the society and any of its creditors; the dispute shall be referred to the Commissioner for decision. 15. Section 67(1) of the Act purports to oust the Court s jurisdiction where the matter in dispute touches the business of a cooperative society. It is well known that historically, the Courts have interpreted in a very restrictive manner clauses which purport to oust its jurisdiction, especially in cases 7
8 relating to a citizen s right of access to the Court. In Western United Credit Union Co-operative Society Limited v Corrine Ammon 3, Kangaloo JA opined: it must be borne in mind that the Supreme Court does not lightly relinquish its jurisdiction. Thus any statutory provision which attempts to oust its jurisdiction must be clearly worded and strictly construed. The court s approach to the construction of ouster clauses is prescribed by well-settled principles which were set out in the judgment of Luckhoo J.A. in Guyana Sugar Corporation v Seeram Teemal as follows: (1) the jurisdiction of the court was not ousted by statute expect by express words or by necessary implication; (2) a statute imposing restrictions upon a citizen s right of action in a court should be strictly construed and should not be extended beyond what the words used actually covered; and (3) where a right or liability not existing at common law was created by statute, which gave a special remedy for enforcing it or appointed a specific tribunal for its enforcement, a party seeking to enforce his right must resort to that remedy or to that tribunal and not to others The rights of a citizen must always be the concern of the courts unless their jurisdiction is clearly excluded by some express statutory provision or by necessary implication. 16. The above dicta emphasizes the point that ousters clauses are designed to impose restrictions upon a citizen s recourse to the court by ousting the 3 Civ App 103 of
9 jurisdiction of the court in favour of another tribunal; as such they must be strictly construed. 17. In Western Union Cooperative Society Limited v Corrine Ammon supra, the respondent by claim form and statement of case instituted proceedings to recover severance payments due to her upon her termination as Manager of the appellant credit union. Evidence of the monies due her was contained in a letter signed by a director of the appellant, one Mr. Thompson. The appellant had argued that the letter was not a separation agreement and that Mr. Thompson had no authority to execute the agreement with the respondent. The respondent applied for summary judgment and the judge made an order that the appellant pay the respondent the outstanding balance on the separation agreement. The appellant appealed this decision. The main ground of appeal was that the High Court lacked the jurisdiction to deal with this matter by virtue of Section 67 of the Act. The Court of Appeal found that the issues to be determined were the following: (i) Whether the dispute was one which touched the business of the Defendant. (ii) Whether the dispute must be as a result of the member s membership of the appellant or whether membership is merely incidental to the dispute. 18. With respect to the first issue, the Kangaloo JA gave the following guidance: 9
10 8. Any attempt at a liberal interpretation of section 67 would clearly fall afoul of the strict interpretation which is regularly placed upon ouster clauses. 9. To my mind the better view is that the meaning of the phrase touching the business of the society must be informed by the objects of the society. This approach serves to mitigate the risk that the scope of section 67 would be widened so as to include every dispute involving a Co-operative Society. In this appeal guidance as to the objects of the appellant can be derived from its bye-laws. 19. With respect to the second issue the Court of Appeal stated at paragraph 10 that: I am of the view that in order for section 67 to apply the dispute must be between the society and a member in his capacity as member. Thus section 67 cannot apply to a situation where the membership is merely incidental to the dispute. This approach is consistent with that of Koylass J in David Rhyzer v Diego Martin Consumers Co-operative Society Ltd where it was held that a dispute concerning the payment of rent and an alleged distress did not fail within section 67 because, inter alia, it did not arise between the society and the member in his capacity as a member. Similarly, in the instant appeal the dispute surrounding the respondent s terminal benefits arose between the appellant and the respondent in her capacity as a past officer. In my view the fact that she also happens to be a member of the appellant is not by itself sufficient to bring this dispute within the meaning of section 67 of the Act. I am fortified in this approach by the strict construction which must be placed upon ouster clauses in keeping with the role of the 10
11 courts in preserving the citizen s right of access to the courts. [Emphasis added] 20. In the case of Bobby Mungal (Trading as Best Choice Meats) v El Dorado Consumers Co-operative Society Limited 4 the defendant was a Co-operative Society registered under the Co-operative Societies Act whose primary object was to improve the economic and social conditions of its membership by purchasing and selling to members, goods, stores and consumer articles of all kings for general use, of good quality, weight and measure from wholesalers, retail dealers and other Co-operative Societies. The claimant was a supplier of dry goods and meats which it sold to the defendant in the course of its business. By claim form, the claimant claimed the sum of $4,668, being the amount due and owing by the Defendant for the purchase of the Claimant s goods. 21. The issue raised was whether the Court had the jurisdiction to hear and determine this claim which concerned a dispute between the Society and one of its creditors. 5 The Defendant relied on section 67(1)(f) in support of its contention that this dispute touched and concerned the business of the society and should be referred to the Commissioner of Co-operatives for determination; the Defendant society argued that the High Court s jurisdiction was ousted by Section 67 (i)(f) of the Act. Gobin J agreed with this 4 CV Section 67(1)(f) of the Act 11
12 submission and held that the jurisdiction of the Court was ousted by the Act and that the matter should be determined before the Commissioner. ANALYSIS 22. The disputes in this case are as follows: i. whether the Defendant s dismissal of the Claimant as employee and Executive Director of the Defendant is lawful, ii. whether the Claimant s dismissal as a Director of EPL Properties Limited, a subsidiary of the Defendant is lawful. 23. The issue that I must determine on this preliminary point is whether the dismissal of the Claimant touches the business of the Defendant society pursuant to Section 67(i) of the Act. As stated in Western Union Cooperative Society Limited v Corrine Ammon I must have regard to the objects of the Defendant when considering this issue. The objects of the Defendant society are outlined in Section 3 of their bye-laws as follows: (a) To improve the economic and social conditions of its members by: i. Promoting thrift and saving among its members (using shares and other instruments); ii. Providing loans to members for provident and product purposes (as defined in the Loan Policy); and iii. Providing such services as the Board sees fit from time to time. (b) To encourage the spirit and practice of self-help and cooperation and promote the development of co-operative ideas by: 12
13 i. Educating members in co-operative philosophy, principles and practices; ii. Affiliating or collaborating with any other Society or Organization; and iii. To do all such lawful things as are incidental or conducive to the attainment of the above objectives. 24. From an examination of the bye-laws I conclude that the issue of the termination of the Claimant as Executive Director and employee of the Defendant does not touch the business of the society. I decline the Defendant s invitation to expand the reach of Section 67(i) of the Act by taking into account Section 18 (g)(a)(vi) of the bye-laws in order to determine the meaning of the phrase touching the business of the society. The issue of the Claimant s dismissal is directly linked to his relationship as an employee of the Defendant society. It is a claim for unfair dismissal and in my view it is merely incidental to his position as an officer of the society. 25. The subsidiary company EPL Properties Limited was incorporated under the provisions of the Companies Act; as such this company does not fall under the purview of the Cooperatives Societies Act and more particularly, is not caught by the provisions of Section 67(i) of the Act. The fact that the Defendant is the sole shareholder of the EPL Properties Limited does not change this fact. 26. In the circumstances, insofar as this claim relates to the Claimant s purported dismissal from the Defendant s Board of Directors, I hold that this Court s 13
14 jurisdiction is not ousted and that the matter will be proceeded with before me. I also hold that the Inter Partes application to continue the ex parte injunction granted herein on 20 th November 2015 is adjourned to 19 th April 2016, 11:00 am, POS Costs are reserved. JOAN CHARLES JUDGE 14
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