David A Straz Jr vs ABI Bank

THE EASTERN CARIBBEAN SUPREME COURT ANTIGUA AND BARBUDA IN THE HIGH COURT OF JUSTICE CLAIM NO: ANUHCV2011/0702 BETWEEN: DAVID A. STRAZ JR. Claimant and ABI BANK LTD. Defendant Appearances: Dane Hamilton QC and D. R. Hamilton for the Claimant E. Ann Henry QC and C. Debra Bunette for the Defendant 2015: February 19 April 01 Judgment

[1]Cottle, J.: The defendant applied for a stay of proceedings on 23rd October, 2014. The application was supported by an affidavit. The claimant filed no affidavit in response as the facts are not in issue. The application by the defendant seeks a stay of execution of the judgement obtained by the claimant and the subsequent enforcement order made on 9th May, 2013.

Background

[2]On 22nd July, 2011 the Eastern Caribbean Central Bank (ECCB) exercised its emergency powers under the ECCB Act cap 142 of the Laws of Antigua and Barbuda. It assumed exclusive control of the property and business of the defendant bank. The required notice was gazetted on 22nd July, 2011.

[3]In November 2011 the claimant commenced the present action. He is the holder of a deposit account with the ABI Bank. The sum on deposit at the date of the claim was US$5,183,302.17 with an interest rate of 6%. The claim was served on the bank which filed an acknowledgement of service. The claimant had served as a member of the Board of Directors of the defendant bank until immediately before the intervention by the ECCB to assume emergency management of the ABI Bank. On 13th December, 2011 the defendant bank applied to the court for a stay of the proceedings until the bank emerged from the management of the ECCB, but no defence was filed.

[4]On 16th January, 2012 the claimant applied for judgement in default of defence. On 22nd November, 2012 a request was filed for a writ of execution to enforce the judgement. The writ was issued.

[5]The defendant applied to the court to vary the judgement in default. On 9th May, 2013 Remy J made certain orders. I reproduce the order in its entirety:- “IT IS ORDERED that: 1. The Defendant to pay US$50,000.00 commencing from Friday the 28th June, 2013 and continuing thereafter on or before the last working day of each succeeding month. 2. The Writ of Execution issued by this Honourable Court on the 19th day of December, 2012 be suspended for Six (6) months from the date of today’s Order. 3. The application filed on the 17th January, 2013 be adjourned for review on the 7th November, 2013 4. Both parties to have liberty to apply 5. The Defendant to pay to the Claimant costs in the amount of $2,500.00. 6. Penal Notice to be attached.”

[6]This order was not appealed. On 26th March, 2014 there was an amendment to the ECCB Act. As a result of the change, leave of the court is now required to maintain the present proceedings:- “(5) On and after the publication of a notification under paragraph (1)- (a) no creditor, shareholder, depositor or any other person shall have any remedy against the financial institution in respect of any claim, and without prejudice to the generality of the foregoing, no creditor, shareholder, depositor or any other person shall commence or continue any action, execution or other proceedings or seek to enforce in any way any judgment or order obtained against the financial institution or its successor or the transferee of the whole or any part of any property, assets or undertaking of the financial institution for the recovery of any claim or in respect of any other liability, until the publication of the notification under Article 5E(1) in relation to the financial institution or without the prior leave of the court unless the court directs otherwise;”

[7]The present application by the defendant is based on the amended legislation. Counsel for the defendant submits that the judgement and order of Remy J may not be pursued without the leave of the court.

[8]The claimant opposes the application of the defendant. Mr. Hamilton QC filed helpful written submissions setting out his arguments. I set out the legal issues as he identifies them:- i. There was no challenge to the Judgement which was entered, neither did the Applicant appeal the Order of the Court. ii. The application falls foul of the ‘res judicata’ principles: a) “A Judicial determination directly involving an issue of fact or of law disposes once for all of the issues so that it cannot afterwards be raised between the parties or their privies” b) For the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is ……. Necessarily decided by the prior judgement, decree or order. c) To put it more bluntly “A general decision in favour of the Claimant extends to any fundamental allegation by him, expressed or implied, which his opponent failed to challenge. d) A judgement in favour of the Claimant, by default or otherwise establishes that he had a cause of action and each essential element of it, but will not negative any matter extraneous to that cause of action. iii. This Application is an abuse of the process of the Court. HENDERSON v. HENDERSON JOHNSON v. GORE WOOD & CO [2002] A.C1 p 22-23 HENDERSON v. HENDERSON abuse of process, as now understood, although separate and distinct from cause of action estoppels and issue estoppels has much in common with them. The underlying public interest is the same; that there should be finality in litigation and that a party should not be twice vexed in the same manner TAYLOR v. LAWRENCE [2002] Q.B 528”

[9]I will attempt to deal with the issues in the order they are listed.

No challenge to judgement

[10]It is not entirely accurate to say that there was no challenge to the judgement. The defendants have applied to have the judgement varied. That application was adjourned. It is true, however, that the variation sought, deals only with the issue costs claimed. The judgement thus remains in force unless or until it is set aside or varied. This principle has been repeated in many decided cases. One example, the decision of the Privy Council in Robertson v Isaacs [1985] 1 AC 97 on appeal from St. Vincent and the Grenadines, will suffice.

[11]In the present case there is no issue with the validity of the judgement or the order for enforcement. The position of the defendants is simply that subsequent legislation operates to stay the enforcement of the order.

[12]This legislation was considered recently by this court in Elaine Schiedmayer v Heather Williams and ABI Bank ANUHCV2013/0063.

[13]In that matter I concluded that the effect of the statutory provision is clear. It operates to prevent the institution or continuation of any claim or enforcement proceedings without the leave of the court.

[14]In the present case no application has been made for leave. The claimant is therefore unable to maintain his enforcement proceedings without first obtaining the leave of the court.

Res Judicata

[15]The principle of res judicata operates to prevent the revisiting by litigation of matters which have been previously judicially determined. In the present case the defendants are making no effort to challenge the judgement already obtained. There is no attempt at litigating matters already determined. The defendants are merely pointing out that the recent legislation operates to stay the present proceedings. This is by operation of law. It does not deny the claimant fruit of his judgement.

[16]It does, however, require him, in the peculiar circumstances of a defendant financial institution having been taken over by the ECCB, to first seek and obtain leave.

[17]The reason is that the need to protect the regional financial system from possible collapse is so important that it would be proportionate to impose reasonable conditions on the right of affected litigants to bring or maintain claims.

Abuse of process

[18]Given that the application by the defendants is actually otiose it cannot be said to be an abuse of the process of the court. Whether the defendant made the application or not would matter little. It is the effect of the statutory provision which has the result of staying the enforcement of the judgement or order obtained by the claimant.

[19]I conclude that there is no need to make any order as prayed for by the defendants. It is my opinion that the legislation has the effect of requiring the claimant to apply for and obtain leave before continuing with this matter.

Brian Cottle

High Court Judge