1. Ramsgate Resources N.L 2. Phillip Clifford 3. Peter Dawson Appellants v P. H. Nominees Ltd Respondent

• Jurisdiction: British Virgin Islands
• Court: Court of Appeal (British Virgin Islands)
• Judge: MATTHEW J. A. [Ag.],Justice of Appeal [Ag.]
• Judgment Date: 15 January 1998
• Judgment citation (vLex): [1998] ECSC J0115-1
• Docket Number: CIVIL APPEAL NO: 6 OF 1997
• Date: 15 January 1998

[1998] ECSC J0115-1

IN THE COURT OF APPEAL

Before:

The Hon. Mr. Albert N. J. Matthew Justice of Appeal [Ag.]

CIVIL APPEAL NO: 6 OF 1997

Between:

1. Ramsgate Resources N.L

2. Phillip Clifford

3. Peter Dawson

Appellants

and

P. H. Nominees Ltd

Respondent

Appearances:

Mr. S. Husbands for the Appellants

Mr. M. Fay for the Respondent

MATTHEW J. A. [Ag.]

1 [In Chambers]

2 This is an application by summons for leave to serve notice of appeal out of time and for further directions filed on December 5,1997.

3 After a hearing in Chambers in the High Court, Georges J. on March 14, 1997 made declarations and orders in the following terms:

"IT IS DECLARD THAT:

• 1. The purported meeting of the directors of the Fourth Defendant on 12 ^th December, 1996 and the resolutions purportedly passed thereat were invalid and ineffective;

• 2. Messrs. Noe, Lucero, Perez, and Dankmeyer are the only directors of the Fourth Defendant;

IT IS ORDERED THAT:

3. [a] the Second and Third Defendants be restrained whether by themselves or their servants or agents or otherwise howsoever from acting as purporting to act as, or otherwise howsoever holding themselves out as directors and or officers of the Fourth Defendant;

[b] the Third Defendant be restrained whether by himself, his servants or agents or otherwise howsoever from acting as or purporting to act as or otherwise howsoever holding himself out as a director or officer of Minero Bruno S.A. and /or Minero Pedro S.A.

[c] the First, Second and Third Defendants and each of them be restrained whether by themselves or their servants or agents or otherwise howsoever from diluting or purporting to dilute the share holdings of the Plaintiff in the Fourth Defendant whether by transferring shares owned by the Plaintiff to the First Defendant or purporting to issue further shares in the Fourth Defendant to the First Defendant or otherwise howsoever;

[d] the First, Second and Third Defendants and each of them be restrained by themselves or their servants or agents or otherwise however from taking any action based on the resolutions purportedly passed or the budgets purportedly adopted on 12 ^th December 1996.

4. there be delivery up to the Plaintiff within 4 days hereof of the corporate secretarial and other records of Fourth Defendant;

5. there be delivery up to the Plaintiff within 14 days hereof of the Plaintiffs share certificates in the Fourth Defendant;

6. there be liberty to either party to apply;

7. the Plaintiffs costs to be taxed unless agreed otherwise and to be paid to the Plaintiff by the First, Second and Third Defendants."

4 On April 25, 1997 the Appellants filed a notice of appeal and there is no dispute between the Parties that the grounds of appeal in issue are those contained in paragraphs 3[a] and [b] of the notice of appeal and are as follows:

"3. The grounds of appeal are as follows:

[a] The learned judge erred in law in failing to limit the injunctions against the appellants to the matter in issue in the suit, namely, the invalidity of a meeting of the directors of Oro Huasi Exploration Inc. ["OHE"] held on 12 ^th December, 1996.

[b] In the circumstances the injunctions are too wide and /or are not clear and/or are capable of preventing the second and third appellants from acting as directors or officers of OHE even if they are subsequently validly appointed as such; and further are capable of preventing the third appellant from acting as a director of Minero Bruno S.A. and or Minero Pedro S.A. even if they are subsequently validly appointed as such; and further are capable of preventing the first and third appellants from diluting the shareholding of OHE even pursuant to validly passed resolutions."

5 The application becomes necessary because although the Appellants filed their appeal exactly six weeks after the judgment in accordance with Order 64 Rule 5 they did not serve the Respondent with the notice of appeal within seven days as required by Rule 7[2].

6 The Appellants filed an affidavit in support of the Summons. Paragraph 2 of the affidavit acknowledges their breach of Rule 7[2] and they allege that they served the notice on the Respondent on May 21, 1979, that is 19 days after the last day for service, that is May 2,1997. Paragraph 3 gives the reasons for the delay in effecting service of the notice of appeal. Obviously they are regarding the service of May 21,1997 as proper service and merely giving reasons for the 19 day delay. The Appellants are anticipating a successful application and so they are also asking for directions in paragraph 9 of the affidavit to comply with Order 64 Rule 11 and to prepare the record for the appeal.

7 A copy of the transcript of the proceedings in the Court below was submitted as an exhibit.

THE BACKGROUND FACTS

8 In essence the first Appellant and the Respondent and Another were share holders in a certain I.B.C. The first Appellant and the Respondent each had 37.5 per cent of the shares and the Other had 25 per cent. According to the transcript and learned Counsel for the Respondent, what gave rise to these proceedings is that the first Appellant purported to pass a resolution at a directors' meeting held on December 12, 1996. The learned Judge found that the meeting was invalid. At the meeting it was purported to appoint the second and third Appellants as directors of the company. The learned Judge found that because the meeting was invalid Mr. Clifford and Mr. Dawson were not appointed as directors. This finding is not challenged on appeal.

9 Having found that Clifford and Dawson were not validly appointed directors, the learned Judge granted injunctions restraining them from holding themselves out as directors and restraining all the Appellants from taking any action on the basis that the said meeting was a valid meeting.

10 Learned Counsel for the Respondent submitted and this was not challenged that the matter came before the learned Judge by way of an application for summary judgment and at that hearing learned Counsel who appears for the Appellants in these proceedings was in appearance and conceded that the Respondent who was then the Plaintiff was entitled to injunctive relief against his clients and the only dispute between the Parties on the application for summary judgment was as to the exact wording of the injunction.

11 Mr. Fay states that it is only since the order that Mr. Husbands has come up with a different set of words.

12 I observe at page 4 of the transcript that the learned Judge offered Counsel for the Appellants time to present a draft to the Court so that:

"we could have seen precisely what you are talking about rather than just words. Don't you think you could do that for us and let us see something in black and white?"

13 Counsel's response was that he did not want to delay the proceedings. After further discussion it was agreed to insert "liberty to apply" in the order and the learned Judge explained it in this way:

"In other words, it is not absolute. You can always come back if you wish to, to seek some sort of modification or addition."

AUTHORITY TO EXTEND TIME

14 Learned Counsel for the Appellants submitted that the basic principle is that a party should not be driven from the judgment seat because of an oversight or failure to follow a rule if he can show a good reason or excuse for such failure and there is no prejudice to other side. Counsel submits that the Court is to be guided by Order 2.

15 I think it is to Order 3 Rule 5 one must go to see the power of the Court to extend time for appealing. This rule is to be read with Order 64 Rule 6[2]. According to McCowan L.J. in NORWICH AND PETER BOROUGH BUILDINGS SOCIETY v STEED 1991 2 AER 880 the matters which the Court takes into account in deciding whether to grant an extension of time are the following:

• 1. the length of the delay;

• 2. the reasons for the delay;

• 3. the chances of the appeal succeeding if the application is granted; and

• 4. the degree of prejudice to the respondent.

I shall look at these matters as they relate to this case.

16 Norwich and Peterborough was followed and applied by our Court of Appeal in HARY SIMON and CAROL HENRY, Civil Appeal 1 of 1995, from Antigua decided on July 3,1995.

THE LENGTH OF THE DELAY

17 In Norwich McCowan L.J. stated that on any view a 62 months delay was substantial. Learned Counsel for the Respondent looked at delay in two parts the first being from May 2, the last day for regular service to May 21 or 22, the date of actual service; and the second part being from May 16 when the Appellants' solicitor was informed that there was no service, to December 5 when the application for leave was made.

18 I cannot help observing an element of tardiness in the prosecution of this appeal. The notice of appeal was filed on the last possible date after the judgment. Then there was a deliberate decision to delay service till the last day, May 2, but here time over took them resulting in the stated oversight. On May 16, the appellants' solicitor were informed that the Respondent was not served. Another five or six days elapsed before service of a document which had already been filed. The Appellants took no further action after that until December 5 when they filed this application. They could not have believed their service on May 21 or 22 was in order. If they did why did they not proceed to prepare the record? I believe they were quite aware that they needed the Court's leave and then would follow the normal prosecution of the appeal and that is why in this summons they ask not only for leave to serve the notice of appeal out of time, but also further directions to prosecute the appeal. Paragraph 3/5/1 of the United Kingdom Supreme Court Practice 1997 deals with the scope of the rule under consideration. It states in part;

"The object of the rule is to give the court a discretion to extend time with a view to...