THE REPUBLIC OF TRINIDAD AND TOBAGO IN THE HIGH COURT OF JUSTICE Claim No. CV2015-03563 IN THE MATTER OF REFSERV LIMITED AND IN THE MATTER OF THE COMPANIES ACT CHAPTER 81:01 BETWEEN RAJANAND BHIMULL Claimant AND REFSERV LIMITED VIJAY BALVIN ASHRAM BALVIN Defendants Before The Hon. Madam Justice E. Donaldson-Honeywell Mr. Dave Williams, Attorney-at-Law for the Claimant Mr. Ravi Mungalsingh instructed by Mr. Rennie Gosine, Attorneys-at-Law for the Defendant Delivered on August 16, 2016 Page 1 of 6
RULING 1. The Defendants applied under the provisions of Parts 15(2); 26.1; 26.2(1)(b) and (c) of the Civil Proceedings Rules 1998 (as amended) [ the CPR ] by Notice of Application [ NOA ] filed on April 14, 2016 for orders striking out the Claimant s Claim and/or for Summary Judgment. 2. In the Claim being challenged by the said NOA the Claimant seeks relief under Section 242(3) of the Companies Act Chapter 81:01 [ the Act ] for the exercise of powers by the 2 nd and 3 rd Defendants in a manner that was oppressive and/or unfairly prejudicial to his interests as a former director of the First Named Defendant. 3. The Claimant further contends that he held the office of Managing Director of the First Defendant until he was forced to resign on May 5, 2014 due to the alleged oppressive actions of the 2 nd and 3 rd Defendants. The Defendants dispute that the Claimant was ever appointed as Managing Director. However, that contention is not the basis for the instant Application to strike out the Statement of case and/or for summary Judgment in favour of the Defendants. 4. By directions given on May 9, 2016 the parties were directed to file written submissions in relation to the NOA following which a decision would be without further hearing. Only the Defendants complied with the said order by filing submissions on July 28, 2016, within the time period specified. In the circumstances, although my ruling herein finds against the Defendants application, there will be no order as to costs of the Application in favour of the Claimant. 5. The primary point made by the Defendants in arguing that the Claimant s Statement of Case should be struck out as disclosing no reasonable cause of action is that the position held by the Claimant as a former director and/or officer of the First Defendant Company is not among the category of persons entitled to relief under Section 242(2) of the Act. The Defendants purport to support this contention by relying firstly, on the guidance given by His Honour Mr. Justice Jamadar JA in CV1997 of 2003 Eugene Lopez v Telecommunications Services of Trinidad and Tobago and Others. Page 2 of 6
6. In the passages, from the said judgment 1 cited by the Defendant, clarification is provided by Jamadar JA on the way that Sections 239 and 242(1) and (2) interrelate and coexist, setting the prerequisites for relief to be obtained under Section 242(3) of the Act. Justice Jamadar made clear that a person must be within the specified category of persons in Section 242(2) in order to obtain such relief. That category is limited to shareholders, debenture holders, creditors, directors or officers of the Company. Officer is defined at Section 4 of the Act as including inter alia (b) the managing director, general manager or; (c) any other person who performs for the body corporate functions similar to those normally performed by the holder of any such office. 7. It is not sufficient for the person seeking relief under Section 242(3) to be in the categories provided under Section 239 which are much broader in that they include the Registrar of the Defendant Company and any other person who, in the discretion of the Court, is a proper person to make the application. Accordingly, Jamadar JA made clear that not every Section 239 Complainant has a right to relief under Section 242(3). As an example he cited the Registrar as an excluded person from such relief. 8. The complainant in the case being determined by Jamadar JA was clearly excluded from the categories of persons entitled to Section 242(3) relief but not based on his having been within one of the categories in a former time. He was excluded because he sought the relief as a pensioner, beneficiary and/or proper person and none of those fall within the categories set out at Section 242(2). 9. Whilst it is clear from the Judgment of Jamadar JA that the category of persons entitled to Section 242(3) of the Act is strictly restricted, the point made by the Defendants herein that former directors or officers of a Defendant Company are excluded from such relief appears nowhere in the said judgment. 10. The second Judgment relied on by the Defendants similarly provides no support for the contention that former directors or officers are excluded from relief under Section 242(3). The Defendants cite the decision of Madam Justice Jones as she then was in CV 2009-01304, 01305 and 01306 Khaima Persad v Stephen Bail and Claim No. CV 2009-04190 Stephen Bail v Khaima Persad. 11. At para 33 of that Judgment Madam Justice Jones underscored the necessity for a person seeking relief under Section 242(3) to prove not only that he falls within the 1 Pages 4 to 7 of the Judgement. Page 3 of 6
categories of a complainant under Section 239 but also that at least one of the criteria at Section 242(2) is met. From a reading of the passage in context it is clear that Justice Jones focus based on the relevant facts of that case was not on the last part of 242(2) where categories of persons are set out. 12. The issue of concern in that case was whether any of the types of oppression at (a) to (c) of 242(2) had been proven in the case. The Claimants in that cases were at all material times the 50% shareholders in the relevant company which in that case was not named as a Defendant. Neither the ratio decidendi of the case nor any guidance provided obiter therein touched and concerned whether a former officer of the Defendant Company could be entitled to relief under Section 242(3). 13. There is some authority that points to former officers of a company not being excluded from relief under Section 242(3). In the matter of CV 2011-03332 Richard Callender v Trinidad and Tobago National Petroleum Company Ltd Madam Justice Gobin J considered whether a person who like the Claimant herein was the former officer of the company had locus standi not only to be a complainant under 239 of the Act but also to meet the requirements to be entitled to relief under 242(2) of the Act. The decision in this regard was stated as follows: Oppression: 18. In so far as the claim of oppression under S.242 of the Companies Act is concerned I find that while the claimant does not fall within the definition of officer under S.4 (a) and (b) of the Act I am prepared to take judicial notice of the fact that a CEO is the person who is in charge of the overall day to day management of a company, very much as is a general manager and on that basis I find that the claimant is an officer under S.4 (c). He therefore had the necessary locus to bring the claim of oppressive conduct. 14. Similarly, in CV2009-04584 Mervyn Assam v CLICO Investment Bank Limited, Central Bank of Trinidad and Tobago and FCB Limited the Claimant seeking relief for oppression under Section 242(3) was a former Director of the First Defendant. No issue was raised as to his being excluded from such relief because at the time of filing his claim he was a former and not a current Director. 15. Further, in CV2010-00433 Lennox Gift v Oswald Gift and others, Madam Justice Jones stated affirmatively: Page 4 of 6
In accordance with the Act to be entitled to relief under section 242(3) the Claimant must first establish that he is a complainant within the meaning of the Act. As a former director the Claimant qualifies as a complainant and is therefore entitled to seek redress pursuant to section 242 of the Act. 16. The fact that Claimants who formerly held the positions mentioned at Section 242(2) are not per se excluded makes logical sense on a full reading of that sub-section. It is clear by inclusion of the words are or have been at both (b) and (c) of 242(2), that the legislation is intended to provide relief not only for acts of oppression that are in progress but to such actions that took place in the past. This would include such acts of oppression as would have affected persons who formerly held the positions specified at the end of the sub-section. It matters not that unlike 239(b) the word former is not included before director or officer of a company. The same or perhaps an even broader meaning is achieved by the inclusion of the words are or have been at 242(2). 17. In all the circumstances it is my finding that the point taken by the Defendants that the Claimant herein is excluded from relief because he no longer holds the office of Managing Director is without merit. Accordingly, the said submission cannot be the basis for striking out the Statement of Case or granting summary judgment for the Defendants. The further issue as to whether the Claimant was ever in fact appointed as Managing Director or was otherwise an officer of the Defendant Company is one to be determined at the trial herein based on evidence to be tendered by the parties. 18. The Defendant s secondary contention is that the Claimant s Statement of Case should be struck out because the Claimant cannot found an action against the Second and Third Defendants. The aforementioned Judgment of Jones J, as she then was in Khaima Persad is cited in support of this submission. That circumstances in relation to which that decision was made were far from on all fours with those in the instant case. In that matter the Claimants omitted to name the Company as a Defendant and instead each Claimant named his fellow shareholder as Defendant. 19. Accordingly, Madam Justice Jones observed that There is nothing in this section or the case law spawned from this section which suggests that relief under section 242 is available against an individual as opposed to the company. In the instant case the 2 nd and 3 rd Defendants have been sued not as opposed to the First Defendant Company against which the relief is sought but as relevant parties to the litigation. Accordingly, it is my further finding that the contention that the 2 nd and 3 rd Defendants ought not to Page 5 of 6
have been included in the Claim has not been borne out as a valid basis to strike out the Statement of Case or to grant Summary Judgment in favour of the Defendants. Decision: 20. The NOA filed by the Defendants on July 28, 2016 is dismissed with no order as to costs... Eleanor Joye Donaldson-Honeywell Judge Assisted by: Christie Borely Judicial Research Counsel I Page 6 of 6