Fair Construction Company Ltd v Richardson

• Jurisdiction: Anguilla
• Court: High Court (Saint Christopher, Nevis And Anguilla)
• Judge: Rawlins, J.
• Judgment Date: 16 January 2003
• Neutral Citation: AI 2003 HC 1
• Docket Number: HCVAXA 2000 of 0005
• Date: 16 January 2003

High Court

Rawlins, J.

HCVAXA 2000 of 0005

Fair Construction Company Limited

and

Richardson

Appearances:

Ms. Mary Roberts for the claimant

Ms. Tanya Philip for the defendant

Company Law - Application for orders for production of company documents including contracts and payment vouchers — Application quashed.

Rawlins, J.

1 This case reflects the difficulties that may arise where persons operate a company without sound knowledge or professional advise. Actions and decisions do not usually then take normal courses and classical legal principles may not easily provide fit answers to the problems that may be caused.

2 In this case, the Claimant (hereinafter referred to as “the Company”) applied for two orders for production, on the 22 ^nd day of October 2001. These were brought for the production of documents by Banx Professional Services Limited (hereinafter referred to as “Banx”) the Company's own registered agent and office, and by the Ministry of Finance of the Government of Anguilla (hereinafter referred to as “the Ministry”). The Application as it relates to Banx is for an order enjoining that company to produce to the Solicitors of the claimant one copy of all corporate and other such documents constituting the file of the Company. The second is for an order for the Ministry to produce one copy of all contracts together with all payment vouchers entered between the Government and or Selvin Richardson and/or Glenford Hughes and/or Glen Samuel and/or the claimant “from 1997 to the present”.

3 The grounds of the Application with respect to Banx state that Banx acts as the registered office and agent of the claimant Company and, as such, is required by law to be the official repository of all of its corporate documents. Its shareholders, it states, are entitled to view and take copies of documents pertaining to the Company. It states, however, that the requests of two (2) of its shareholders, Glenford Hughes and Glen Samuel, have been denied. These two persons claim that with the defendant, they are the only shareholders of the Company. The Application further states that it is necessary for the shareholders to have access to the files and records in order to assist them in the litigation of this case. In particular, they wish to be appraised of the incorporation details, ongoing corporate activity and their status in relation to the claimant Company.

4 In relation to the Ministry, the application states that the three (3) shareholders of the company have entered into numerous contracts with the Government and that payment vouchers were issued to them for the construction of several projects. It is therefore necessary, according to the application, for the Parties to this action to verify such amounts as were contractually entered into and paid to any of the shareholders. The application further alleges that the Permanent Secretary to Public Administration has not acceded to requests for the information. The decision on this application is hereby made against the background to the case and the applicable principles.

The Background

5 The claimant was incorporated under the Companies Ordinance of Anguilla, 1994, now Chapter 165 of the Revised Laws of Anguilla, 2000 (hereinafter referred to as “the Act”). In accordance with section 149(1) and (2) of the Act, it named Banx as its registered office in its Articles of Association. It therein also appointed Victor Banks of Banx as its registered agent. The defendant says that he is now the only shareholder.

6 The proceedings in this case were instituted on the 19 ^th day of January 2000. The claimants in that originating process were Glenford Hughes, Glen Samuel and Fair Construction Company Limited. The action was brought against the present defendant. It was then re-filed by way of an Amended Writ in the names of the present parties on the 31 ^st day of July 2000. The claimant seeks an Order that the defendant, as the sole director of the claimant Company until his removal on the 23 ^rd day of July 1999, do render account for the monies that were due to the Company up to that date. The claimant also seeks an order that the defendant do repay any and all sums due on the taking of the account, interest and costs. The claim is elaborated in the Statement of Claim that was filed on the 25 ^th day of September 2000. It purports to claim, in addition, damages for breach of fiduciary duty and for breach of duty as trustee.

7 Interlocutory Judgment in default of Defence was filed on the 12 ^th day of January 2001. A Defence was filed on the 9 ^th day of March 2001 and Joinder on the 21 ^st day of March 2001. The case first came before me in Chambers on the 12 ^th day of July 2001. It was adjourned to Case Management Conference to be conducted on the 22 ^nd day of October 2001. The defendant filed the required Case Management documents on the 17 ^th day of October 2001. Solicitors for the virtual Claimants did so on the 22 ^nd day of October 2001. The Notice of Application herein was filed on the same date. The Case was adjourned for the hearing of the Application to the 25 ^th day of October 2001.

8 When the matter came for hearing on the 25 ^th day of October 2001, the Parties undertook to preserve all documents that are relevant to the case, which they have in their possession, custody and control. Because of the unavailability of counsel who was to appear to conduct the case on behalf of the claimant, the matter was adjourned to the 7 ^th day of February 2002. Counsel for the Parties were directed to file and serve Skeleton Arguments on the issues touching the application, on or before the 24 ^th day of January 2002. The Parties were also directed to file and serve further Affidavits that may assist in the determination of those issues, on or before the 31 ^st day of January 2002.

9 The matter eventually came on the adjourned hearing on the 25 ^th day of March 2002. The Parties had not complied with the directions. The time for compliance was enlarged to the 3 ^rd day of May 2002. The Order also provided that unless the claimant complied by the stipulated time, the action would stand dismissed for want of prosecution with costs on the defendants. It provided that unless the defendant complied, the Defence would stand struck out and judgment entered for the claimant on the claim with costs to the claimant. The hearing was adjourned to a date to be fixed in the event of compliance. It was eventually heard on the 17 ^th day of July 2002.

The Issues

10 The Application raises two (2) issues for determination. The first is whether, in the circumstances of the case, Banx should be required to give a copy of all corporate and other documents constituting the file of the Claimant Company to the Solicitors for the virtual claimants. The second is whether the Ministry of Finance of the Government of Anguilla should be required to produce a copy of the contracts and vouchers entered between the Government and Selvin Richardson, the defendant, Glenford Hughes and Glen Samuel from 1997 to the present time. However, before these issues are considered, I shall make an observation and ruling with respect to the Parties in this case.

Joinder of Parties

11 In my view, it was unnecessary to file the Amended Writ on the 31 ^st day of July 2000. It served to change the Parties to the action. Glenford Hughes and Glen Samuel were deleted as claimants. They are the persons who are interested in this action. For convenience, I have referred to them in this Judgment as the virtual claimants. The Company remains as the only claimant on the record. This is quite unfortunate given the disputes as to the status of the virtual claimants with the claimant Company. They assert that they removed the defendant as the sole director in 1999 and appointed Hughes in his place. As far as the defendant is concerned, he remains the sole director of the Company. He is also asserting that he is now the only shareholder.

12 It is noteworthy that in their own application, the virtual claimants proffer as one of the reasons for seeking access to the records of Company, that they wish to be appraised of their status in relation to the Company. They were listed as shareholders of the Company in the Annual Return filed in 1999. The Annual Return for the year 1999, which was filed in 2000, states that they transferred their shares to the defendant. The virtual Claimants are seeking production of the records of the Company because they wish to know, inter alia, how it transpired that their names were removed as shareholders of the Company. In the face of these circumstances, it seems that the original claimants should have remained as the claimants in this case.

13 The application herein was heard on Case Management Conference. Part 19.2(3) confers a discretion upon the Court to add a new Party to proceedings without application. The Court may do so if that course of action is necessary to permit the resolution of all matters in dispute in the proceedings. Part 19.2(6) enables the court to add, remove or substitute a Party at the Case Management Conference. In the exercise of this discretion, I shall add and thereby restore Glenford Hughes and Glen Samuel as claimants in this case. The caveat is that since Samuel showed no interest in the hearing of the Application herein, he may be removed as a party if he indicates disinterest in the action.

Should Banx be Required to Produce?

14 For the purpose of this issue, the submissions on behalf of the defendant are encapsulated in three (3) parts. The first is that directors and shareholders of a company, their agents or legal representatives may examine the records of a company during usual business hours. This is on the authority of section 157(1) of the Act. This section also confers a right upon these persons to take extracts from these records free of charge. Section 157(2) of the Act entitles a...