Cashman Equipment Corporation v EMCS Caribbean Ltd

• Jurisdiction: British Virgin Islands
• Court: High Court (British Virgin Islands)
• Judge: Mangatal, I
• Judgment Date: 01 June 2023
• Judgment citation (vLex): [2023] ECSC J0601-1
• Docket Number: CLAIM NO. BVIHCOM 2022/0132
• Year: 2023

Between:

Cashman Equipment Corp.

Claimant

and

EMCS Caribbean Ltd

Defendant

CLAIM NO. BVIHCOM 2022/0132

EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

COMMERCIAL DIVISION

Appearances:

Mr. Callum McNeil for the Claimant.

Mr. Stewart Buckingham KC, with him Mr. Peter Ferrer and Mrs. Kimberly Crabbe-Adams for the Defendant

1 Mangatal, I (Ag.): The Claimant Cashman Equipment Corp (“ Cashman”) is a company incorporated under the laws of the Commonwealth of Massachusetts, in the United States. The Claimant is principally engaged as a barge rental and marine contracting company.

2 The Defendant EMCS Caribbean Limited (“ EMCS”) is a company incorporated in the BVI with its principal place of business being in the BVI.

3 There are two applications before me. One is Cashman's application for Summary Judgment dated 8 February 2023 and the other is EMCS's application for summary judgment, or a reverse summary judgment application, as the parties have referred to it, dated 25 April 2023.

4 Cashman's claim is based upon a judgment it obtained against EMCS and others, Directors of EMCS, in the Commonwealth of the Massachusetts (“ Massachusetts”) in the United States.

5 The Defendant has filed a Defence in which it claims that it is not liable under, or liable to satisfy the Massachusetts judgment, for reasons that I will come to.

The Statement of Claim

6 Cashman avers that it is the judgment creditor of EMCS under a judgment issued in Massachusetts which is more particularly described as a Default Judgment dated 28 February 2022 made by Judge Richard G. Stearns of United States District Court for the District of Massachusetts Civil Action No: 1:21-cv-10862-RGS (“ the Judgment”).

7 The total debt and costs which Cashman claims under the Judgment is US$4,029,435.95, with post judgment interest, the breakdown of which is as follows:

Item	Amount in USD
1.	Damages for loss of use of the Vessel at the rate of $1,300 per day for 652 days	847,600
2.	Custodial fees and costs incurred by Claimants due to Defendant's illegal detention of the Vessel	181,250
3.	Repairs to the Vessel necessitated by the Defendant's acts and omissions	1,700,000
4.	Marine survey expenses	1,841.29
5.	Towing costs to repatriate the Vessel to the United States	780,000
6.	Costs to effect service of process under the Hauge (sic) Convention	6,000
7.	Legal costs for proceedings in Trinidad to recover the Vessel	120,000
Sub-Total :	3,636,691.29
8.	Costs	402
9.	Interest	392,342.66
	Total	4,029,435.95

8 The pleading continues, that the Judgment was made on the basis of, amongst other matters, a Charter Lease/Vessel Purchase Agreement (“ the Contract”) made effective on 20 March 2018. The Contract was for the charter hire of the barge registered in the United States and known as JMC 50 (“ the Vessel”).

9 It is Cashman's claim that pursuant to the terms of the Contract, the Defendant agreed to pay charter hire to the Claimant at the rate of $1,300 per day for the term of the Contract which was agreed to be six (6) months. Thereafter the Contract continued whilst the Vessel remained in the possession of EMCS.

10 Paragraph 10 of the Statement of Claim expressly pleads that Cashman and EMCS elected to have their obligations governed by Massachusetts law and jurisdiction. Clause 24 of the Contract provides:

“ Any controversy or claims arising out of or relating to this contract or the breach thereof shall be governed by the general maritime law of the United States, insofar as applicable, otherwise by the laws of the Commonwealth of Massachusetts. The parties to this contract hereby agree that all disputes shall be resolved in the first instance by the United States District Court for the District of Massachusetts and in default of subject matter jurisdiction in the said court then in a court of general Jurisdiction in the Commonwealth of Massachusetts. All parties waive any defence of lack of personal jurisdiction or defence of improper venue associated with said forum selection method as described herein….”

11 The pleading goes on to detail that EMCS took possession of the Vessel on 9 May 2018 and claims that during the term of the Contract EMCS failed to pay a significant portion of the charter hire that was due and payable and failed to comply with the Contract in numerous respects.

12 Cashman states that it subsequently instituted proceedings against EMCS in Massachusetts on 24 May 2021.

13 By its pleading, Cashman seeks enforcement of the Judgment, the sum of $4,029,435.95 plus interest and costs.

The Defence

14 In its Defence, at paragraphs 14, 19 and 20, EMCS admits that the Judgment was issued by the US Court in the US claim, but it denies any liability as a judgment creditor pursuant to the Judgment. It avers that the Judgment was obtained in default, without EMCS's participation, and in circumstances where EMCS did not submit to the jurisdiction of the US Court.

15 EMCS also asserts that the Judgment was not in fact obtained in relation to any breach of contract claim. In fact, that the Claimant expressly disavowed any contractual claim that it could make in the US claim. Thus, it is asserted that Cashman's re-characterisation of the nature of the US claim, and hence the Judgment, for the purposes of seeking enforcement in the BVI is illegitimate and an abuse of the process of the Court.

16 Further or in the alternative, it is stated that the alleged Contract was superseded by the final agreement dated 4 June 2018 ( “the Final Agreement”), and therefore it is denied that the Contract, or the jurisdiction clause contained within it, was binding or applicable.

17 EMCS also argues that further or alternatively, and in any event, the US claim and/or Judgment and/or the facts and matters with which the same are concerned are outwith the scope of the jurisdiction clause in the Contract (and/or if, which is denied, the same be relevant, are outwith the scope of the jurisdiction clause in the Final Agreement).

Defence sets out background-Commencement of Trinidad & Tobago Proceedings

18 Prior to making its challenges in relation to the Judgment set out above, EMCS sets out a background part of which concerns proceedings in Trinidad and Tobago (“ the Trinidad Claim”). On 8 May 2020, Cashman commenced an admiralty action in rem for the arrest of the vessel in claim No. CV2020-01178.

19 The Trinidad Claim was brought against EMCS as the entity which at the date of the filing of the Trinidad Claim was in possession of the Vessel and in the alternative, against any other persons claiming to be interested in the Vessel.

20 EMCS indicates that it instructed a law firm to defend the Trinidad Claim and has since the filing of its defence and counterclaim been fully defending the Trinidad Claim. On 28 January 2022, the trial Judge in the Trinidad Claim, Justice Kangaloo, ordered the release of the Vessel to EMCS. However, Cashman appealed this decision and the Court of Appeal of the Republic of Trinidad and Tobago reversed the trial judge's decision, ordering the release of the Vessel to Cashman. The release was upon condition of provision of payment of security into court in the sum of US $637,500. The Vessel remains unreleased at this time.

21 The Trinidad Claim was based upon the Contract and included a claim by Cashman for alleged breach of that Contract.

22 The Trinidad Claim was set down for a 4-day trial from 22 August 2022 to 25 August 2022 and EMCS avers that it prepared for and fully intended to defend the Trinidad Claim.

23 However, on 22 August 2022, the day on which the trial of the Trinidad Claim was to commence, Cashman filed an application to discontinue certain aspects of the Trinidad Claim, which aspects included:

• (1) the sum of US$283,800.00, together with contractual interest at the rate of 18%;

• (2) damages for breach of the Contract; and

• (3) damages and/or mesne profits for conversion and/or detinue of the Vessel,

(“ the Discontinuance”).

24 The application for the Discontinuance was granted on 22 August 2022. According to the pleading of EMCS, the Discontinuance was such that those aspects of the Trinidad Claim have been finally abandoned and are no longer being pursued.

Commencement of Massachusetts Proceedings

25 EMCS refers to the US claim commenced on 25 May 2021, more than a year after the Trinidad Claim, and avers that the US claim pursued purely tortious claims against EMCS relating to alleged fraud and conspiracy.

26 The Defence contends that the US claim does not include any claim in respect of breach of the Contract, or any contract, and nor does the Complaint rely upon or otherwise refer to the contractual jurisdiction provision contained in clause 24 of the Contract, whether for the purposes of jurisdiction or otherwise.

27 In fact, the Defence continues that by paragraph 34 of the Complaint, Cashman expressly disavowed any claim it could have for breach of contract, by stating “ Notably, Defendants' breach of contract is not claimed herein insofar as it is pending in Trinidad.”

28 This is the background and context in which EMCS claims that Cashman's purported re-characterization of the US claim, and hence the Judgment, for the purposes of enforcing it in the BVI is illegitimate and an abuse of the process of the Court.

29 The Defence also asserts out that portions of the Judgment comprise costs in relation to the Trinidad Claim and that such costs could only be recoverable in the Trinidad Claim.

Reply

30 In its Reply, Cashman denies that these proceedings are in any way abusive of this Court's jurisdiction and states that this Court has jurisdiction in personam against EMCS as of right because EMCS is incorporated in the BVI.

31 As regards the Trinidad Claim, Cashman admits that it did proceed in the Trinidad Courts against EMCS for...