Choisit v Choisit et Al

• Jurisdiction: Anguilla
• Court: High Court (Saint Christopher, Nevis And Anguilla)
• Judge: Saunders, J.
• Judgment Date: 23 March 1999
• Neutral Citation: AI 1999 HC 3
• Docket Number: Civil Suit No. 97 of 1998
• Date: 23 March 1999

High Court

Saunders, J.

Civil Suit No. 97 of 1998

Hickox

and

Leeward Isles Resorts Limited (No. 2)

Appearances:

Mr. S. Bennett and Mrs. M. Walwyn for the Applicant.

Messrs. C. Abel and S. Westmaas for the Respondents.

Debt - Promissory notes —

Facts:

The plaintiff alleged that they were the holders of promissory notes made by the defendant. They sued for sums owing and interest accrued. The issue was whether the promissory notes invalid and unenforceable. Effect of defendant's counterclaim. —

Held:

No suggestion that defendant's counter-claim did not disclose a reasonable cause of action. The court's discretion was therefore exercised in favour of permitting the counter-claim to stand and be tried simultaneously with claim. Application dismissed with costs.

Saunders, J.

1 Charles Hickox, the plaintiff, alleges that he is the holder of two Promissory Notes made by the defendant company. He claims that the Notes were not repaid as and when the same fell due. He sues for the sums owing and interest accrued.

2 The defendant, a company, alleges that, for a variety of reasons, the Promissory Notes are invalid and unenforceable. Leave was given to the company to defend the action. It goes without saying that leave would only have been given on the basis that the allegations made by the company disclosed triable issues regarding the efficacy of the Notes. A Defence has since been filed. It runs to no fewer that 112 paragraphs.

3 The company has gone further in its pleading. The company has also counterclaimed for a series of declarations for breaches of fiduciary duties, for consequential unliquidated damages and for the setting aside of two Land Charges. These Land Charges were allegedly made in favour of Mr. Hickox by the company. The allegation is that the Charges purported to provide security for the payment of the sums allegedly due under the Promissory Notes.

4 The Defence filed by the company discloses allegations of wrongful conduct on the part of Mr. Hickox. The same or similar allegations are made in support of the claims in the Counterclaim.

5 Mr. Hickox has filed a Reply and a Defence to the Counterclaim. Having done so, he now applies for the defendant's Counterclaim to be struck out. In support of the application several authorities were cited to me to demonstrate the court's deep reluctance to entertain counterclaims on any claim based on a Bill of Exchange.

6 The first case cited was James Lamont & Co. Ld. v. Hyland Ltd. [1950] 1 K.B. 585. In that case, the defendants opposed the giving of judgment under Order 14 on the ground that they had a counterclaim. The Master gave the plaintiff liberty to enter judgment but stayed execution pending determination of the counterclaim. Both parties appealed. The defendants, who had no Defence to the Bills, argued that the plaintiff ought not to have judgment without a stay of execution. The plaintiff desired that the judgment should stand but that the stay should be removed.

7 The appellate tribunal recognised the existence of a rule that a defendant ought to have unconditional leave to defend an action where that defendant shows grounds for relief by way of equitable set off. The court stated however that such a rule does not apply to parties to a Bill of Exchange in circumstances where the matters relied upon by the defendant afford no defence under the Bills of Exchange Act. As Roxburgh, J. stated, “A court of law would say you must pal the bill first and then bring an action…”

8 The James Lamont case was quoted approvingly by the House of Lords in Nova (Jersey) Kammgarn (1977) 1 Lloyd's L.R. 463. In that latter case, the respondents argued that the court ought not to give judgment to the holders of certain Bills until the...