Court name
Supreme Court of Turks and Caicos Islands
Case number
CL 40 of 2017

Northwest Luxury Development Group Ltd. v. F Corporate&Management Services Limited (CL 40 of 2017) [2017] TCASC 1 (30 June 2017);

Law report citations
Media neutral citation
[2017] TCASC 1
Coram
Ramsay-Hale, CJ

CL 40 OF 2017

 

IN THE SUPREME COURT

TURKS AND CAICOS ISLANDS

BETW EEN

NORTHWEST LUXURY DEVELOPMENT GROUP LTD.

Plaintiff

-and-

F CORPORATE & MANAGEMENT SERVICES LIMITED

Defendant

 

Mr. Neale Coleman instructed by Karam & Misick for the Plaintiff

Mr. Craig Oliver instruct ed by F Chambers for the Defendant

 

Heard on the 22nd and 27th June 2017

 

BEFORE THE CHIEF JUSTICE, THE HON. MS. JUSTICE RAMSAY- HALE

 

 

JUDGMENT

 

 

1. In a related matter, CL 230 of 2015, Caicos Brothers Group Ltd., a shareholder of the  Northwest Luxury Development Group, the Plaintiff in this action, applied to the Court for an injunction barring a number of defendant s, including three of the other shareholders of the Plaintiff, from acting on resolutions made by those shareholders at an Extraordinary General Meeting of the Company held on 21 December 2015.

2.       Mr. Gilbert Morris, the principal of Caicos Brothers Group Ltd., had objected to the meeting going ahead, inter alia, on the ground that as he was unable to attend. His application for an interim injunction to restrain all six Defendants from acting on those resolutions was adjourned by consent on the undertaking of the three shareholders, Messrs. Franklin, Gratton and Lombardi (the 3rd 4th and 5th Defendants to that application) that they would not act on the basis of the resolutions made by them at that December 2015 meeting but would maintain the status quo. Since that time, no effort has been made by Caicos Brothers Group Ltd. to move that matter forward.

3.      Subsequent to the giving of that undertaking, the terms of which were settled in a Consent Order filed in the Supreme Court on the 14 January 2016, the three share holders called another Extraordinary General Meeting of the Company and served notice of the meeting on the Attorneys for the Caicos Brothers Group Ltd., F Chambers . Mr. Fulford of those Chambers attended the meeting as proxy for Caicos Brothers Group Ltd.

4.       At that meeting, Messrs. Gratton, Lombardi and Franklin were appointed Directors with signing authority on the Company's bank accounts. It would appear that the newly appointed Directors resolved to change their corporate services provider from F Corporate & Management Services Limited, the Defendant in this matter, to Lex Corporate Services and asked the Defendant to deliver the books held for the Plaintiff Company be delivered to them.

5.       The request was ignored.

6.       Towards the end of 2016, the three shareholders, Messrs. Franklin, Gratton and Lombardi again requisitioned a meeting of the Company and provided Notice of that meeting to all shareholders, including Caicos Brothers Group Ltd. At the Meeting held on 14 December 2016, Messrs. Franklin, Gratton and Lombardi were again appointed Directors.

7.       At another meeting of the Plaintiff, convened by the Directors on 16 January 2017, they resolved to remove Mr. Gilbert Morris, principal of Caicos Brothers Group Ltd., as a Director of the Company and a signatory on the Company's bank account, that the Defendant's nominee, First Choice Secretaries Limited, be removed as the Company Secretary and that the Defendant hand over to the Directors the corporate books.

8.       Request was again made of the Defendant to deliver up the Plaintiff's books, which request was again ignored.

9.       The Plaintiff then filed this action to compel the Defendant "to deliver all of the corporate books, corporate seal and all corporate legal files relative to the Plaintiff forthwith to Lex Corporate Services.11

10.     The Plaintiff now seeks summary judgment on its claim.

11.     The Defendant opposes the application on the ground that it has a defence to the claim in that it will rely at trial on the undertaking given by Messrs. Franklin, Gratton and Lombardi in January 2016. That undertaking is reproduced below:

"The 41 5th and 6th Defendants hereby give their undertaking that they will not act on any of the resolutions passed at the meeting of 21st December 2015 and to maintain the status quo ante of the company."

12.     The status quo ante was that Mr. Gilbert Morris was the sole Director and First Choice Secretaries Ltd., a nominee of the Defendant, the Secretary of the Company.

13.     Mr. Oliver submits that, on its true construction, the undertaking enjoined Messrs. Franklin, Gratton and Lombardi from calling a meeting of the Company or making any changes to M r. M orr is' position or to the company's management for as long as the proceedings in CL 230 of 2015 remained extant.

14.     The construction Mr. Oliver puts on the undertaking is not borne out by the subsequent actions of the party for whose benefit the undertaking was given. Despite knowing that a meeting was requisitioned in January 2016 and new resolutions taken to appoint Messrs. Franklin, Gratton and Lombardi as Directors in February 2016, Caicos Brothers Group Ltd., did not seek to restrain them from acting in breach of their undertaking, but merely protested through its proxy, Mr. Fulford, who remained at the meeting, that the meeting had not been called in accordance with the Company's governing documents.

15.     No action was taken subsequently against Messrs Franklin, Gratton and Lombardi by Caicos Brothers Group Ltd.

16.     When the meeting on 14 December 2016 was requisitioned, Caicos Brothers Group Ltd. again made no attempt to restrain Messrs. Franklin, Gratton and Lombardi from meeting or from, in the course of that meeting, appointing themselves as Directors or removing Mr. Morris from the management of the company, nor did jt do anything after that meeting to enforce the undertaking that was given to it by them.

17.     Even if the undertaking were to be construed as Mr. Oliver suggests, the Defendant, which provides corporate services to the Plaintiff Company, is not entitled to pray in aid of its refusal to comply with the Company's request an undertaking given by three shareholders of the Company for the benefit of a third-party shareholder who is not before the Court. The Defendant must act on the instructions of its client which is the Plaintiff Company. It may not resist the application on the basis of an undertaking to which it is not a party nor may it resist the application on behalf of Caicos Brothers Group Ltd. or Gilbert Morris who are not parties to this suit and have not sought to become parties.

18.     Only Caicos Brothers Group Ltd. has the right to enforce the undertaking and it has chosen not to do so.

19.       On the face of it, the meetings of the Company were duly convened and new Director s appoint ed and Mr. Morris removed. The Defendant does not suggest otherwise. The only challenge made to the meetings is that they were convened by the three shareholders in alleged breach of an undertaking given by them to another shareholder who, as I say, is not a party to this claim, has not sought to intervene and has not given any evidence to that effect.

20.     The Defendant has no defence to the claim for delivery up of the Plaintiff's books, record s and seal and summary judgment is granted to the Plaintiff. I will hear the parties on costs.

 

DATED 30 JUNE 2017

CHIEF JUSTICE