1. BCB HOLDINGS LIMITED FIRST CLAIMANT/RESPONDENT 2. THE BELIZE BANK LIMITED SECOND CLAIMANT/RESPONDENT

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1 IN THE SUPREME COURT OF BELIZE A.D CLAIM NO. 743 OF 2009 BETWEEN: 1. BCB HOLDINGS LIMITED FIRST CLAIMANT/RESPONDENT 2. THE BELIZE BANK LIMITED SECOND CLAIMANT/RESPONDENT AND THE ATTORNEY GENERAL OF BELIZE (On behalf of the Government of Belize) DEFENDANT/APPLICANT Mr. Michael Young S.C., and Ms. Magali Perdomo for the applicant. Mr. Eamon Courtenay S.C., for the respondents. AWICH CJ Ag D E C I S I O N 1 Notes: Civil Case Practice and Procedure; an application for an order to stay execution (enforcement of a.judgment pending determination of appeal); judgment takes effect on the same day unless court orders otherwise R 42.8; SCRP, also O.11r.19 of Court of Appeal Rules; first there must be prospects of success in the appeal; court has unfettered discretion whether to grant or refuse a stay; court must consider all the circumstances and decide whether it is in the interest of justice to stay execution of a 1

2 judgment or order; the question to be asked is whether there is a risk of injustice in granting or refusing a stay of execution; whether not granting a stay will cause ruin to appellant is, but only one consideration. 2. On , learned judge, Sir John Muria, handed down a judgment in this claim. He ordered that the respondents claimants were entitled under S: 28 of Arbitration Act, Cap 125, to enforce against the applicant defendant, the Government of Belize, represented by the Attorney General, an award made on , by the London Court of International Arbitration (LCIA). The award was made up of damages $40,843,272.34; reimbursements 206,248.14; legal and other costs BZ $2,960,735.69; and interest at the rate of 3.38% per annum. On , the Attorney General filed an appeal against the judgment. Then on , he applied for an order of court to stay the enforcement of the judgment. A stay would have the effect of suspending the enforcement of the award made by the LCIA. 3. The award by the LCIA was made in a dispute that arose in an agreement described as a settlement deed, made on , and subsequently amended. According to the judgment of Muria J, the 2

3 subject matter of the deed included the purchase of certain shares and the exemption of the respondents from certain provisions of tax laws of Belize. The agreement also provided for arbitration and so the respondents referred the dispute to the LCIA. The dispute was the question as to whether the Government had breached the terms of the settlement deed in regard to how taxes of the respondents were to be treated. The applicant did not participate in the arbitration. The LCIA then made the award, the subject of the claim for enforcement that Muria J. decided on The appeal of the Attorney General is against all the decisions comprising the judgment. 14 grounds of appeal were given. Some of them were that the learned judge erred in holding that: (1) the New York Convention on Recognition and Enforcement of Foreign Arbitration Award, dated 10 th June 1958, applied to Belize; (2) tax matters were arbitrable; (3) the final arbitration award was not contrary to public policy; (4) the agreement on which the arbitration was held was not unlawful; and others. 5. Determination. 3

4 An application for a stay of execution of a judgment or an order of the Supreme Court is necessary because, a judgment or order [of the Supreme Court] takes effect from the day it is given or made, unless the court specifies that it is to take effect on a different date see R42.8 of Supreme Court (Civil Procedures) Rules So discretion is given to the Supreme Court judge to decide whether a judgment may take effect on a day other than the day on which the judgment is given. Court of Appeal Rules, Order 11 rule 19, states the same rule, but in a different way that, an appeal to the Court does not operate as a stay of execution unless the court below or the Court of Appeal orders otherwise. 6. When considering an application for a stay of execution, court must keep in mind that the primary rule is that a judgment creditor is entitled to enjoy immediately the fruit of his success in a litigation, unless court orders otherwise. MBW v Commissioners of HM Revenue and Customs [2008] EWCA Civ 1028, is the current authority see also Sagis v Krem; Civil Appeal No. 13 of It follows that a judgment creditor should be allowed to enforce his judgment, unless and usually on an application for a stay of execution, 4

5 the court considers it is in the interest of justice to order a stay of execution. Put another way, the court will grant a stay of execution if there will be a risk of injustice in the circumstances, if a stay is not granted see Gater Assets Ltd v Nak Naftogaz Ukrainiy [2008] EWCA Civ In its determination as to whether granting or refusing a stay of execution serves the interest of justice, court considers in the first place, the prospects of success in the appeal on which the application for a stay of execution is based. The appeal must have reasonable prospects of succeeding. If there are no prospects of success in the appeal the court must dismiss the application for a stay of execution see Marie Makhoul v Cicely Foster; HCVAP 2009/014, a case from the Court of Appeal of Antigua and Barbuda. Some opinions are that, some prospects of success, are good enough. It is clear however, that a mere hope that the appeal will succeed, when the ground of appeal is irrational or fanciful is not good enough. 8. In an Australian case, MR & RC Smith Pty Ltd; Ultra Tune (Osborne Park) v Wyatt [2011] WASC 43, the Supreme Court of Western 5

6 Australia considered the question of prospects of success of an appeal. In such an appeal, the court stated, the ground would not be irrational, fanciful or absurd. That seems a rather too low a standard of an appeal with prospects of success, in my view. In Linotype Hell Finance Ltd v Baker [1993] 1WLR 321, the Court of Appeal (England), found a good enough appeal when it held that there was, an arguable appeal, based on a triable issue as to whether or not the defendant signed the authority to execute the guarantee in the mortgage claim, the subject matter of the claim. An indepth examination of the issues in the appeal is not necessary at this stage. 9. During the oral submissions in court counsel for the respondents seemed to agree that this is an appeal in which there are prospects of success. My view is that the questions of law raised in the grounds of appeal are certainly arguable and not, trivial, irrational or illogical. There are prospects of success in the grounds of appeal. 10. The decision to grant a stay of execution of a judgment is discretionary. A discretion by nature cannot be fettered, so court has unfettered discretion in granting an order to stay execution of a 6

7 judgment. But it will exercise the discretion only if it has taken into consideration all the circumstances of the case and has come to the conclusion that, the justice of the case demands that a stay be ordered. That point was made in, Gater Assets Ltd. case [2008] EWCA Civ It has been suggested in, Hammond Suddard Solicitors v Agrichem International Holidays Ltd [2001] EWCA Civ. 1915, that to help the court decide whether to grant a stay or not, two questions must be asked: 1. If a stay is granted, and the appeal fails, what are the risks that the respondent will be unable to enforce the judgment? 2. If a stay is refused, and the appeal succeeds, and the judgment is enforced in the meantime, what are the risks of the appellant being unable to recover the subject matter of execution (in a money judgment what has been paid to the respondent)? Answers to these questions usually disclose a clear picture as to whether the risk of injustice lies with the judgment creditor or the judgment debtor. There will sometimes be circumstances where whichever order is made; there will be risk of injustice to one party or the other; in that event, the court will have to 7

8 do a balancing act see Combi (Singapore) Pte Ltd. v Ramnath Sriram & Another [1997] EWCA Civ In this application there has been no evidence that the applicant, the Government, or the respondents, (the second is a bank) were impecunious and would not be able to pay the sum of money the proceeds of the judgment of Muria J. There has instead been evidence that the respondents would be able to refund payment made to them in execution of the judgment, in the event the appeal was successful. On the part of the applicant, the evidence was not that it would be unable to pay, rather that payment of such a large sum right away would severely affect some of social programmes of the Government. That is far from proof that the Government would be ruined. 13. But court must consider all the circumstances and decide whether the justice of the case will require that a stay be granted or refused. The more significant facts in all the circumstances of this case, that attract attention include the following. First the sum awarded is very large, over BZ $43,804,000 plus British 206,248.00; I cannot envisage the 8

9 sums being paid at once or even within a matter of weeks or a few months, even if there be no stay of execution. Secondly, it is in evidence that the sum has not been included in the Appropriation Act for the financial year 2010/2011. Some legislative steps will have to be taken whether it be under ss: 115 or 117 of the Constitution, to effect payment out of the Consolidation Revenue Fund. That will require perhaps weeks or months. Insisting on immediate enforcement is unrealistic, given the constitutional requirements regarding Consolidated Revenue Fund. 14. It has been urged on the court that it should adhere to the view in the Linotype Hell case and Commissioner of Sales Tax, and Attorney General v Sanitation Enterprises Ltd.; Court of Appeal No. 36 of 2010 (Belize), that the applicant for an order to stay enforcement of a judgment must, in order to succeed, prove that without a stay he will be ruined. That, in my view, is but only one occasion on which the risk of injustice will occur. Granting a stay of execution is a matter of discretion. I do not think that at any one time there will be case precedents that will cover all circumstances in which a court must decide that the justice of the case requires that a stay be granted or not 9

10 granted. All that can be said is that the discretion must be exercised judicially, and some guidance may be provided. In Winchester Cigarette Machinery Ltd v Payne and another (No. 2), the discretionary power of the court was emphasized when the court of Appeal (England) stated that there must be some ground for ordering a stay beyond the fact that an appeal is pending; the discretion of the court is not circumscribed, it should be exercised judicially having regard to all the circumstances of the case. 15. I prefer to adopt the approach in, the Gater Assets case; the Winchester Cigarette case; and the Combi (Singapore) EWCA Civ. 2164, namely that, the court must make that decision which best accords with the interest of justice. In the Combi (Singapore) case, Lord Justice Phillips on page 4 stated the approach as follows: In my judgment the proper approach must be to make that order which best accords with the interest of justice. If there is a risk that irremediable harm may be caused to the plaintiff if a stay is ordered but no similar detriment to the defendant if it is not, then a stay should not normally be ordered. Equally, if there is a risk that irremediable harm may be caused to the defendant if a 10

11 stay is not ordered but no similar detriment to the plaintiff if a stay is ordered, then a stay should normally be ordered. This assumes ofcourse that the court concludes that there may be some merit in the appeal. If it does not, then no stay should be ordered. But where there is a risk of harm to one party or another, whichever order is made, the court has to balance the alternatives in order to decide which of them is less likely to produce injustice. 16. In my view the circumstances in this case tend towards the grant of a stay of the execution of the judgment of Muria J, handed down on The sum of money is enormous and none of the parties will suffer irremediable harm whether a stay is ordered or not. The stay of execution will last only a short time until June 2011, when the appeal will be heard. The Government s budget for the financial year ending in about a month, did not provide for the judgment sum. It is unlikely that supplemental budget could be approved by Parliament instantly or within weeks. Insisting on immediate execution ignores constitutional provisions regarding payment out of the Consolidated Revenue Fund. I grant the application dated , of the 11

12 Attorney General for a stay of the enforcement of the judgment of Muria J, dated The affidavit of Mr. Waight requested a stay of execution only until the appeal session commencing on The appeal in this case has not been listed for the Court of Appeal sitting for the period to The order that I make is that the stay of execution will last until the next sitting of the Court of Appeal in June 2011, or until an order of the Court of Appeal varying or discharging this order. 18. Delivered this Tuesday the 8 th day of March 2011 At the Supreme Court Belize City Sam Lungole Awich Chief Justice (Ag.) Supreme Court 12