Burgess v Burgess-Salina and Williams

• Jurisdiction: Bermuda
• Judgment Date: 25 January 2016
• Date: 25 January 2016
• Docket Number: Civil Jurisdiction 2014 No 355
• Court: Supreme Court (Bermuda)

[2016] Bda LR 8

In The Supreme Court of Bermuda

Civil Jurisdiction 2014 No 355

Between:

Anthony Charles Burgess

Plaintiff

and

Olive Lenora Burgess-Salina

And

Gaynelle Peniston Williams

Defendants

Mr J Durham for the Plaintiff

Mr R De Silva for the Defendants

The following cases were referred to in the judgment:

Halki Shipping Corp v Sopex Oils LtdTLR Times Law Reports, 19 January 1998

Minister of Works and Engineering v Village Hotels of Bermuda LtdBDLR [1995] Bda LR 63

Alpine Bulk Transport Co Inc v Saudi Eagle Shipping Co IncUNK [1986] 2 Lloyd's Rep 221

Smith v StonehamBDLR [2015] Bda LR 64

Simmons v McCann and BoschBDLR [2014] Bda LR 96

Application to set aside default judgment — Arbitration stay — Real prospects of success — Delay

RULING of Kawaley CJ

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...