Burgess v Burgess-Salina and Another

• Jurisdiction: Bermuda
• Judgment Date: 25 January 2016
• Neutral Citation: [2016] SC Bda 7 Civ
• Date: 25 January 2016
• Docket Number: CIVIL JURISDICTION 2014: No. 355
• Court: Supreme Court (Bermuda)

[2016] SC (Bda) 7 Civ

In The Supreme Court of Bermuda

CIVIL JURISDICTION 2014: No. 355

Between:

Anthony Charles Burgess

Plaintiff

and

Olive Lenora Burgess-Salina

1st Defendant

Gaynelle Peniston Williams

2nd Defendant

Mr. Jaymo Durham, Amicus Law Chambers Ltd., for the Plaintiff

Mr. Ray De Silva, Moniz & George Ltd, for the Defendants

RULING ON APPLICATION TO SET ASIDE JUDGMENT ON COUNTERCLAIM

(in Chambers)

Background

1 The present application arises from a dispute concerning the interests in a family property jointly ‘owned’ by the parties but originally occupied by the Plaintiff until it was repossessed by the mortgagee in or about June 2014 (‘the Property’).

2 On October 14, 2014, the Plaintiff (acting in person) applied by Originating Summons for relief essentially asserting rights to occupy the Property. By a Summons dated November 4, 2014, the Defendants applied to strike out the Plaintiff's claim. On December 8, 2014, directions were ordered on that Summons. The Defendants on November 18, 2014 filed a Counterclaim seeking damages in the amount of $129, 115.68 under a loan agreement dated February 18, 2010 (‘the Agreement’). The Plaintiff's current attorneys were apparently retained on or before November 20, 2015. A Defence to Counterclaim was due on December 1, 2014 but was not served. On April 20, 2015 the Plaintiff was given leave to discontinue his action and costs were awarded to the Defendants.

3 Meanwhile, the Defendants agreed to extend time for the Plaintiff to file his Defence to Counterclaim and warned by email dated May 1, 2015 that that if his Defence to Counterclaim was not served by Monday May 11, 2015, the Defendants would seek judgment in default. With consummate courtesy, the Defendants' attorneys on May 12, 2015 advised the Plaintiffs' attorneys that they would be seeking a default judgment. They did not make the requisite filing until May 18, 2015, six days later. On that date, Judgment in Default of Defence to Counterclaim was entered in favour of the Defendants in the amount of $130,668 plus interest at the statutory rate until payment.

4 The Plaintiff filed his Defence to Counterclaim at 4.35pm on May 18, 2015, only two hours after the Defendants' application for Judgment in Default. However this was seven days after the last deadline set by the Defendants by way of extension of a deadline for filing under the Rules which had expired over five months ago. Although it is unclear precisely when the Default Judgment was served on the Plaintiff, an application to set aside was not filed until May 29, 2015 and then without any affidavit in support. The Plaintiff's Summons was issued on June 2, 2015 returnable on June 18, 2015. The Defendants on June 2, 2015, without prejudice to their Default Judgment, filed a Reply and Defence to Counterclaim.

5 On June 18, 2015, the Plaintiff sought and was granted 14 days (i.e. until Thursday July 2, 2015) to file his evidence in support of his application to set aside. His Second and his wife's First Affidavit were filed on July 3, 2015, one day late. This evidence supported the merits of his Defence to Counterclaim but advanced no explanation whatsoever for the delay in filing the pleading. The Defendants were required to file their evidence in answer with 14 days, but did not do so until August 24, 2015, the day before the first scheduled hearing for the application to set aside before Hellman J. The August 25, 2015 hearing was delisted by consent.

6 On October 19, 2015, the Defendants' attorneys wrote the Court with convenient dates for the hearing of the Plaintiff's application to set aside. A fresh Notice of Hearing was promptly issued by the Court on October 23, 2015. In the course of the hearing on January 14, 2016, the Plaintiff's counsel sought leave to file the Plaintiff's Third Affidavit, over seven months after the time limited for him to file evidence in support of his application to set aside by this Court's June 18, 2015 Consent Order. The Plaintiff's Third Affidavit advanced for the first time an explanation for the delay in filing his Defence to Counterclaim.

7 Against this background, the Plaintiff sought not merely to set aside the Judgment in Default of Counterclaim, relief sought under his Summons dated June 2, 2015. He also sought by way of submission to obtain a stay of the proceedings in any event by way of enforcement of the arbitration clause under the Agreement.

The arbitration stay application

8 Clause 13 of the Agreement provides as follows:

‘ All questions or differences whatsoever which may at any time hereafter arise between the parties hereto touching this agreement or the subject matter thereof arising out of or in relation thereto respectively and whether as to the construction or otherwise shall be referred to an Arbitrator appointed by the President for the time being of the Bermuda Chamber of Commerce and shall be considered submission to Arbitration within the meaning of the Arbitration Act 1986 or any re-enactment or statutory modification thereof for the time being in force and shall be subject to and governed in all respects by the provisions as [sic] such Act aforesaid.’

9 Mr Durham relied upon the following provisions of the Arbitration Act 1986:

‘7. If any party to an arbitration agreement, or any person claiming through or under him, commences any legal proceedings in any court against any other party to the agreement, or any person claiming through or under him, in respect of any matter agreed to be referred, any party to those legal proceedings may at any time after appearance, and before delivering any pleadings or taking any other steps in the proceedings, apply to that court to stay the proceedings, and that court or a judge thereof, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the agreement, and that the applicant was, at the time when the proceedings werecommenced, and still remains ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings.’ [Emphasis added]

10 I reject the suggestion based on Halki Shipping Corporation v Sopex Oils Ltd Times Law Reports 19 January 1998 that section 7 of the 1986 Act confers a positive right to a stay. That case was considering a mandatory stay provision expressed in wholly different terms substantially the same as the provisions made for international arbitrations by section 8 of the 1986 Act 1. It is clear on the face of section 7 of the 1986 Act that this Court has a discretion to grant a stay which may be exercised, where one party to an arbitration agreement sues in court in respect of a matter governed by an arbitration agreement, when the following additional conditions are met:

• (a) the application for a stay must be made before taking any step in the proceedings; and

• (b) there must be no sufficient reason why the matter should not be referred; and

• (c) the applicant for a stay must have been ready to arbitrate when the proceedings were commenced and remain ready to arbitrate.

11 This straightforward reading of section 7 is confirmed by the findings reached by Meerabux J in a case not referred to in argument, Minister of Works and Engineering v Village Hotels of Bermuda Ltd [1995] Bda LR 63 at pages 25–26:

‘ I hold that the Defendant has proved that the proceedings in respect of which a stay is sought are of a type to which section 7 of the 1986 Act applies, that the application is made in an appropriate manner, that is, that the Defendant is a party to the arbitration agreement, that the Defendant is the applicant and is a party to the legal proceedings, that the application is made after the applicant has entered an appearance but before he has delivered any

pleadings or taken any other steps in the proceedings, that he was arid is ready and willing to do all things necessary to the proper conduct of the arbitration, that there is no sufficient reason why the dispute should not be referred to arbitration.

In light of the above I am of view that the Defendant has a prima facie right to stay and this Court has jurisdiction to grant one and will grant one unless the Plaintiff persuades the Court that there are good reasons why one should not be granted: Mustill and Boyd at 467.’

12 In the present case the Plaintiff has:

• (1) himself commenced proceedings in relation to matters arguably caught by the arbitration clause;

• (2) after the Defendants had filed their Counterclaim which expressly relied upon the Agreement containing the arbitration clause, taken a step in the action by consenting to directions on the Defendants' strike out Summons;

• (3) after the Defendants had filed evidence in support of their strike out Summons and Counterclaim in February 2015 exhibiting the Agreement, taken a further step in the proceedings by consenting to discontinue his own claim without challenging the right of the Defendants to pursue their Counterclaim;

• (4) filed a Defence to the Counterclaim;

• (5) after realising a Default Judgment had already been obtained filed an application to set aside with a view to...