Levers J
IN CHAMBERS IN THE GRAND COURT OF THE CAYMAN ISLANDS GC CAUSE NO: 304 of 2006 BETWEEN IAN DAWSON JAMES Plaintiff AND: CAYMAN YACHT CLUB LIMITED Defendant BEFORE: The Hon. Madam Justice Levers Appearance: Counsel for the plaintiff: Mr. L. Freeman of Broadhurst Barristers Counsel for the defendant: Mr. M. Crawford of Maples & Calder Heard: 20th September 2006 JUDGMENT Levers, J. This is the Plaintiff's application for summary judgment of a specific sum claimed in the Statement of Claim with interest and costs pursuant to the GCR Order 14 Rule 1. The Summons is supported by an affidavit of the Plaintiff. It is opposed by the Defendant. The Plaintiff seeks Summary Judgment on the ground that there is no defence to the Plaintiff's claim. BACKGROUND The Plaintiff is a resident of the Cayman Islands and the Defendant is a company incorporated in the Cayman Islands with registered offices at Queens Gate House, 113 South Church Street, George Town, Grand Cayman. On or about July 2002, the Plaintiff entered into negotiations to commence employment with the Defendant, and a written agreement was concluded dated 4th September 2002. The Employment Contract contains the usual conditions of salary etc and an Entire Agreement Clause. (Clause 20.1 and 22.1). The Plaintiff was employed as a Development Manager of the Defendant for three years under the contract which was automatically renewable for an additional period of three years, unless terminated by the Plaintiff, upon six months written notice to the Defendant. Another term in the contract worthy of mention is that, if the Defendant required the Plaintiff to resign for reasons other than theft or fraud then the Plaintiff would be entitled to receive a severance payment equivalent to the balance of the fixed employment term or one year's full salary whichever was greater together with the three percent bonus entitlement referred to in the contract. The Defendant became insolvent on or about the month of December 2005 and could not pay the Plaintiff. After several demands for his wages, the Plaintiff found alternative employment, and continued to live in the Cayman Islands. The Plaintiff's claim is for: (a) Unpaid salary, expenses and loans and payments; (b) Salary deficiencies; (c) Severance pay; (d) Car allowance; (e) Telephone bills to June 2006; (f) Health insurance; (g) Pension contribution; and (h) Interest. The Defendant, on the other hand, alleges that the Plaintiff came to an oral agreement with the Defendant, whereby the Plaintiff agreed to await his remuneration as the Defendant was in the process of negotiating a sale from which the monies due to the Plaintiff would have been paid. THE PLAINTIFF'S CASE The Plaintiff asks for Summary Judgment on the basis that there is no defence to the whole or part of the Plaintiff's claim. Mr. Freeman on behalf of the Plaintiff submits that the test for determining whether a Defendant has a real and bona fide defence is: (1) What the Defendant saying credible? (2) There a fair and reasonable probability of the Defendant having a real bona fide defence? The Plaintiff submits that the written agreement supercedes all else especially since there is an entire agreement clause and that an oral agreement cannot vary the entire agreement clause in the written contract. Mr. Freeman further submits that under the Labour Law payment of wages is mandatory, that even though the Plaintiff found alternative employment, there should be no deductions of the wages he earned from the salary due under the written contract, and that the full salary is due to him. He submits that the expenses are reasonable, and that the Plaintiff was not dismissed. THE DEFENDANT'S CASE The Defendant has filed a late affidavit with a draft defence attached to it. Mr. Crawford of Maples of Calder on behalf of the Defendant submits that the Defendant should be allowed to file his defence because it has a credible defence to the allegations in the Statement of Claim which are capable of success, namely: (1) That in fact the Defendant believed that the Plaintiff had agreed to forbear any demands for payments, pending realisation of the Defendant’s assets and that there was an agreement between the Plaintiff and the Defendant in respect of the Plaintiff’s ongoing employment or role with the Defendant (this is supported by the email correspondence); (2) That there is a triable issue as to the proper construction and effect of clause 12.3 of the contract of employment, (the clause as to severance); (3) That no demand was ever made by the Plaintiff in respect of his outstanding salary; and (4) The Plaintiff did not make any demands for the reimbursements. I do not believe that (3) and (4) have any great merit and therefore, I would, in coming to any conclusion deal with paragraphs (1) and (2) alone. It is my view that the Plaintiff if certain conditions were fulfilled would be entitled to his salary and no demand need have been made. Mr. Crawford further submits that the pleadings are defective in that they do not plead with specificity the date of the breach of the contract, the expenses incurred especially in circumstance where the defence is that the Plaintiff agreed to forbear the demand for the salary till the Defendant had realized the sale of the land. Mr. Crawford submits that the Plaintiff’s defective pleading is highlighted by his defective affidavit in support. For example, he submits that he failed to verify the allegations in the Statement of Claim as required by GCR Order 14 r1. He also submits that the documentation annexed to the affidavit is irrelevant and should be ignored; and that, in fact, no proper evidence is provided by the Plaintiff for expenses. The defence submits strenuously that it has an arguable and bona fide defence. That there is an agreement to forbear and that the Plaintiff is not entitled to a severance package, if the clause in the contract (paragraph 12.3) is properly construed. That the Plaintiff has taken it upon himself to describe the circumstances of ceasing to work for the Defendant as a dismissal when there is evidence before the court that the Plaintiff’s services were retained by the Defendant. THE LAW Summary Judgment is a procedure whereby a Plaintiff can apply for judgment against a Defendant, usually without proving the case at trial. The policy behind the procedure is to prevent delay in cases where there is no defence. As Lord Halsbury stated in Jacobs v Distillery Company (1901) 85 Lt 262, HS: “There are some things too plain for argument and where they were (defences) put in simply for the purpose of delay which only added to the expense and where it was not in aid of justice that such substance should continue (summary judgment) under RSC, Order 14 was intended to put an end to that Statement of Claim and to prevent sham defences from defeating the right of parties by delay.” The application must be supported by a standard form of affidavit verifying the facts of the claim and deposing to a belief that there is no defence. The Defendant in turn can exhibit a draft defence to its affidavit. A general denial of liability will not suffice. The affidavit must condescend upon particulars per Lord Blackburn in Walingford v The Mutual Society (1885) AC 685 at page 704. It must deal with the specific allegations in the Statement of Claim and state the nature of and facts in support of the defence. The Plaintiff should only apply for Summary Judgment where there appears to be no defence to the action at all. The burden of proof therefore is on the Defendant to show that there is a triable issue. However, it is quite a different matter as Lord Donaldson of Lyminton MR said in RG Carter Limited v Clark (1990) 1 WLR at page 578: "If the issue of law is not decisive of all the issues between the parties, or if decisive of part of the Plaintiff's claim, or if some of those issues, is of such a character as would not justify its being determined as a preliminary point because little or no savings in cost would ensue. It is an a fortiori case if the answer to the question of law is anyway dependent upon the undecided issues of fact." In Systems Control Plc v Munro Cooperate Plc (1990) BCC at page 386, leave to defend was given where an issue whether the Plaintiff had irrevocably elected to treat a contract as discharged or whether they could enforce it was held to be an issue which should be decided at trial. The Order 14 application is intended for liquidated sums where there is no defence to the action in the Plaintiff's belief. I have to ask myself the following questions, is this procedure appropriate to a case for damages for breach of contract. The Plaintiff's Statement of Claim asks for the following relief: (1) Unpaid salary for six months; (2) Expenses, loans, payments due as of June 2006. (No details provided); (3) Salary deficiencies. (No details provided and indeed 2006, 2007, 2008 estimated amounts); (4) Severance pay; (5) Car allowance (No details provided. No dates provided); (6) Telephone to June 2006 (No details provided. No dates provided); (7) Health insurance – (No dates provided); and (8) Pension contributions (dates provided but it goes on for the 3 years which opens itself to a question of construction of the terms of the contract). He also seeks interest on the amount that he claims is $270,876.10. It is my view that this a not an appropriate proceeding for this particular case for the following reasons:
The Statement of Claim is not specific enough as to the loss and expenses due as of June 2006;
There is evidence that the Defendant sought employment elsewhere and it is therefore a question of construction of the written contract whether (despite his income from an outside source) under the terms of the contract and the law, the payment of salary is mandatory and must be paid;
In circumstances where the Plaintiff and the Defendant agreed to forbear from making a demand for the salary until the sale of land was negotiated, whether the Plaintiff is entitled to have commenced an action without a demand, and whether in fact the Defendant is entitled to reasonable notice;
The Plaintiff does not sufficiently particularize the claim for car allowance, telephone and this court would be hesitant to grant Summary Judgment against a Defendant, not knowing whether those expenses were incurred in the course of the alternative employment or the employment contract under which this action has been commenced;
It is also a question of construction whether there is an entitlement to severance pay. This court is of the view that Clause 12.3 in the circumstances of this case does not give rise to an entitlement for severance pay, but this is a matter for the trial judge. For the above reasons, I dismiss the application for Summary Judgment. There is also a Summons before me filed by the Defendant for the following relief: 1. That the time for filing its defence in this action be extended until the 31st August 2006; and 2. That the costs of and incidental to this application be costs in the cause. I find that there is in fact a defence which is not a sham. It is credible and I therefore grant the relief sought in paragraph 1 of the summons filed by the Defendant and grant the extension till the 31st October 2006. THE QUESTION OF COSTS It is usual for the Plaintiff to receive its costs when the Defendant has not filed a defence in time. However, in the circumstances where there was an agreement to forbear, a writ issued with no prior demand or notice, the application for Summary Judgment must be said to be an inappropriate application. I do not believe that costs should be ordered against the defence. I therefore do not award costs to either party, and order that the costs of and incidental to this application be costs in the cause. Dated this 12th day of October 2006 Judge of the Grand Court