OBM Ltd Claimant v LSJ LLC Defendant
| Jurisdiction | British Virgin Islands |
| Judge | HARIPRASHAD-CHARLES J |
| Judgment Date | 03 June 2011 |
| Judgment citation (vLex) | [2011] ECSC J0603-4 |
| Court | High Court (British Virgin Islands) |
| Docket Number | Claim No. BVIHCV2009/0451 |
| Date | 03 June 2011 |
THE EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE
(CIVIL)
Claim No. BVIHCV2009/0451
Mr. Paul Webster QC and Ms. Nadine Whyte of O'Neal Webster for the Claimant
Mrs. Tana'ania Small-Davis and Ms. Akilah Anderson of Farara Kerins for the Defendant
Practice - Civil Procedure Rules 2000, r 7.3, r 7.7, r 9.7(1) - Application to set aside service outside of the jurisdiction - BVI company bringing action in BVI against a US client alleging breach of contract for architectural services - failure to pay invoices due - subject of contract a property in the USVI - whether contract made in BVI - whether breach occurred in BVI - whether realistic prospect of success or good cause of action -whether case a proper one for service out of jurisdiction - whether stay should be granted on basis of forum non conveniens
The claimant claims from the defendant the sum of US$133,174 as unpaid fees for architectural services provided to the defendant in respect of property situated in the United States Virgin Islands ("the USVI") pursuant to the terms of a written agreement between the claimant and the defendant entered into on or about 26 April 2005. The services were alleged to have been performed substantially at the claimant's offices in the British Virgin Islands ("the BVI"). Invoices were sent from the BVI to the defendant in the United States of America ("the USA"). The claimant alleged that the defendant made several promises to honour the invoices but has failed to do so.
As a result, on 18 December 2009, the claimant instituted a claim in this court. On the same day, it made an ex parte application to serve Claim Form and Statement of Claim out of the jurisdiction. On 25 March 2010, a judge granted the order to serve the defendant out of the jurisdiction. The grounds of the application were that (1) the defendant was in breach of contract; (2) the claimant had submitted invoices under the contract which had not been settled. As such, the claimant had a good and substantial case against the defendant; (3) the relevant work and drawings done by the claimant were prepared in the BVI and the claimant is a BVI company.
The present application is to set aside the order of the judge made on 25 March 2010 and subsequently varied by the Master, permitting service of a Claim Form and Statement of Claim out of the jurisdiction in Delaware, United States. The defendant also seeks a declaration that the court has no jurisdiction over it. Alternatively, an order that the claim be stayed on the ground of forum non conveniens.
Held:
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(1) In light of the express terms of the contract, which deemed the agreement to be valid upon execution by both parties, there was an express wavier of the need to communicate acceptance, and the contract was executed in the BVI by the later signature of Tim Peck on behalf of the claimant: Shelson Investments Ltd. v Durkovich 1984 CanLII 1232 (AB QB), at para 20 - 22 followed.
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(2) There is no evidence that any of the defendant's obligations under the contract were to have been performed within this jurisdiction. Therefore there is no evidence that a breach of contract by the defendant occurred within this jurisdiction. Malik v Narodni Banka Ceskoslovenska [1946] 2 All ER 663 (CA), Johnson v Taylors Bros. [1920] AC 144 followed.
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(3) The court declined to make an order to set aside service under CPR 7.7(2)(a) on the ground that the service out of jurisdiction was not permitted by the rules. Service out was permissible under CPR 7.3 (3)(a)(i) on the basis that the contract was made in this jurisdiction, though not on the basis of CPR 7.3 (3)(b) that there was a breach of contract in this jurisdiction. The criteria are disjunctive and the claimant need only establish one for the court to grant permission.
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(4) The court declined to make an order to set aside service under CPR 7.7(2)(b). The facts pleaded at paragraphs 5-8 of the Statement of Claim are sufficient, if proved, to establish a cause of action and these paragraphs are referred to in the supporting affidavit by OBM's principal that the claim has a realistic prospect of success. Thus, on the evidence before the court, there is clearly a serious issue to be tried: Seaconsar Far East Ltd. v Bank Markazi Jomhhouri Islami Iran [1994] 1 AC 438 per Lord Goff at 451-452; Chemische Fabric vormals Sandoz v Badische Anilin und Soda Fabricks (1904) 90 LT 733, per Lord Davey at 735 applied.
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(5) The court ordered that service be set aside under CPR 7.7(3) on the basis that the case is not the proper one for the court's jurisdiction. The defendant has discharged the burden of showing that there is a more appropriate natural forum where the matter may be more suitably tried in the interests of justice. The defendant has no connecting factors to this jurisdiction. The Agreement declares the proper law of the contract to be USVI law. The court is of the view that the jurisdiction of USVI is by far the more appropriate jurisdiction within which to bring this claim. There is no issue of the USVI jurisdiction being in some way deficient in providing access to justice: Amazing Global Technologies v Prudential Trustee Company Limited St Kitts and Nevis HCVAP2008/008 (Rawlins JA, Gordon JA [Ag], Joseph-Olivetti JA [Ag]) Judgment 4th May 2009 and Pacific Electric Wire & Cable Company Limited v Texan Management Limited and ors BVIHCV 2005/0140 (Hariprashad-Charles J) Judgment 12 May 2006 applied.
This is an application by LSJ to set aside an ex parte order made by Redhead J [Ag.] on 25 March 2010 and varied by Master Lanns on 14 July 2010 ("the ex parte order"), permitting service of a Claim Form and Statement of Claim out of the jurisdiction. Additionally, LSJ seeks a declaration that the court has no jurisdiction over LSJ. Alternatively, an order that the claim be stayed on the ground of forum non conveniens.
OBM is a limited liability company incorporated under the laws of the British Virgin Islands ("the BVI") and was at all material times engaged in the business of offering architectural services.
LSJ is a limited liability company incorporated under the laws of Delaware, United States of America ("the USA").
On 18 December 2009, OBM initiated a claim in this court against Little St. James LLC to recover the sum of $133,174.56 as unpaid fees for architectural and design services allegedly rendered to Little St. James in respect of property situated on Little St. James Island, one of the satellite cays of the USVI, pursuant to a written agreement entered into by the parties on or about 26 April 2005 ("the contract").
On the same date, OBM made an ex-parte application seeking leave to serve the Claim Form and Statement of Claim out of the jurisdiction pursuant to Rule 7.3 (3) of the Civil Procedure Rules ( CPR 7.3 (3)). The grounds for the application were that:
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1. OBM contends that LSJ stands in breach of a contract executed between the parties on 26 April 2005.
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2. OBM duly submitted invoices under the contract which have not been settled. As such OBM has a good and substantial case against LSJ.
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3. In the contract LSJ listed its address as 6100 Red Hook Qtr. Suite B3, St. Thomas, USVI 00802.
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4. The relevant work and drawings done by OBM were prepared in the BVI and OBM is a BVI company. As such the matter is an appropriate matter for this court to deal with.
The Notice of Application was supported by an affidavit deposed to by Willa Tavernier, an attorney and associate for the firm of O'Neal Webster. 1 The affidavit sought to justify service out of the jurisdiction on the basis that:
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(a) The architectural services were all performed and completed in the BVI 2;
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(b) The services offered by OBM were provided in the BVI and the contract was executed in the BVI, the most appropriate forum for the determination of the claim. 3
On 25 March 2010, Redhead J [Ag.] heard the application and granted the order sought.
On 30 June 2010, OBM made an application to vary the order granting leave to serve out. The affidavit of Glenis Potts 4, in support of the application, deposed that attempts to serve Little St. James at the address given in the order had failed because Little St. James was not located at that address. It was the address of a shopping plaza. OBM caused company searches to be carried out to locate Little St. James. The searches revealed that Little St. James LLC was not registered to do business in the USVI. However, LSJ LLC, the name set out on the signature page of the contract, was a company registered in the State of Delaware, USA. Its registered agent was listed as the Corporation Trust Company and its
On 14 July 2010 Master Lanns granted the application to vary the ex parte order. This permitted service of the Claim Form and Statement of Claim, both of which had been amended to reflect LSJ's proper name, at the address in Delaware, USA.
On 6 September 2010, LSJ acknowledged service. On 26 October 2010, LSJ made the present application. In the main, it seeks an order to set aside the exparte order and/or stay the proceedings on the ground of forum non conveniens.
LSJ claims that this is not a fit and proper case for the service of the proceedings out of the jurisdiction as OBM has not satisfied the requirements of CPR 7.3 (3) for the following reasons:
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(a) The contract was not made in this jurisdiction;
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(b) The claim is not in respect of a breach of contract committed in this jurisdiction;
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(c) The claim relates to an alleged breach of an agreement which contains an express term in Article XIII that it is subject to the law of...
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