HSBC Bank Bermuda Ltd v Gianni Claudio Vigilante

• Jurisdiction: Bermuda
• Judge: Wheatley
• Judgment Date: 06 December 2024
• Neutral Citation: [2024] SC Bda 74 civ
• Docket Number: 2013: No. 11
• Court: Supreme Court (Bermuda)

Between:

HSBC Bank Bermuda Limited

Plaintiffs

and

(1) Gianni Claudio Vigilante

(2) Mark Pettingill

(3) Rehanna Palumbo

(4) Alessandre Palumbo

Defendants

and

Christopher Trott

Third Party

[2024] SC (Bda) 74 civ (5 December 2024)

Before:

Hon. Alexandra Wheatley, Acting Puisne Judge

2013: No. 11

In The Supreme Court of Bermuda

Rules of the Supreme Court — Order 16; Strike Out of Third Party Notice; Contumelious Delay; Abuse of Process; Want of Prosecution

Appearances:

Erik Penz of Kennedys, for the Third Party

Grant Spurling of Chancery Legal, for the Second Defendant

RULING

Wheatley, ACTING JUSTICE

Introduction

1 Counsel for the third party filed a summons on 7 July 2023 seeking, inter alia, that the Third Party Notice issued against Mr. Trott (hereinafter referred to as the Third Party) be struck out, dismissed or otherwise set aside ( Strike Out Application). Mr. Penz summarized the basis for this application as follows:

• a) The Second Defendant caused the third party proceedings to go to sleep for nine and one-half years and his failure to observe the Third Party's rights as a third party amounts to abuse of process, for which the Third Party has suffered prejudice and for which the court shall strike out the Third Party Notice;

• b) The Second Defendant's delay was contumelious as it was an intentional decision “ to let sleeping dogs lie” in the face of the progress of the main action, and therefore the court should exercise its discretion to dismiss the third-party proceedings for want of prosecution;

• c) Even if the delay was not intentional, it was inordinate and inexcusable, and there is both serious prejudice and a substantial risk that a fair trial would be impossible such that the third-party proceedings should be dismissed for what the prosecution; and

• d) The Second Defendant's inordinate and inexcusable delay was in complete disregard of the Rules of the Supreme Court 1985 ( the RSC) and with full awareness of the consequences, such that it can properly be regarded as both an abuse of process of the court and contumelious conduct.

Background

2 The First Defendant, Gianni Claudio Vigilante, was the Maître D' at the Waterloo House hotel located on Pitts Bay Road, Pembroke. Mr. Vigilante stepped out of this role choosing to venture in operating restaurants himself. One of Mr. Vigilante's restaurants included Opus Café and Lounge ( Opus).

3 Mr. Vigilante obtained loans for his restaurants from the Plaintiff bank ( HSBC), which he was ultimately unable to repay when his restaurants ran into financial difficulties.

4 The Second Defendant was a 30% shareholder in Bar One Ltd, which owned Opus. By written guarantee ( the Guarantee) dated 4 February 2010, the defendants in these proceedings, including the Second Defendant, unconditionally guaranteed on demand to pay HSBC all monies advanced to or paid to or on account of Bar One Ltd not exceeding $650,000. The Second Defendant was also, for a time, the Third Party's attorney in respect of certain proceedings resulting from the failure of Mr. Vigilante's restaurants. The Third Party became involved with Mr. Vigilante and his restaurants as he was the owner of Bristol Cellar Limited ( Bristol) which provided beverages to some of Mr. Vigilante's restaurants.

5 Given the failure of Mr. Vigilante's restaurants, he relocated from Bermuda permanently and is understood to now reside in the United Kingdom. Consequently, HSBC pursued various others alleged to have guaranteed the loans to Mr. Vigilante's restaurant businesses, including the Second Defendant and the Third Party.

6 The following Supreme Court civil actions, in addition to this matter, all resulted from Mr. Vigilante's failure to repay the loans to HSBC and his subsequent relocation to the UK (hereinafter, collectively referred to as the Other Actions):

• i. Vigilante v Trott; 2011 No. 414

  This was a case Mr. Vigilante took against the Third Party in relation to a promissory note. The Third Party was represented by the Second Defendant in these proceedings. Judgment was entered against the Third Party on 12 April 2013.

• ii. HSBC v Bristol; 2013 No. 198

  In this case, Bristol issued third party notices against Mr. Vigilante, Rosemarie Madeiros and the Second Defendant.

• iii. HSBC v Vigilante and Trott and Madeiros; 2013 No. 200

  In this action HSBC were seeking $250,000 (plus interests and costs) from the Third Party under the terms of a guarantee allegedly executed by the defendants in this matter.

7 In 2014, the Third Party reached a settlement with HSBC at or following a mediation session which resolved HSBC v Bristol and HSBC's claims against the Third Party in HSBC v Vigilante and Trott. Pursuant to the settlement, the Third Party paid HSBC at least $750,000 and understood that he had finally resolved all claims affecting him arising out of the failure of Mr. Vigilante's businesses.

8 The Third Party's involvement in the Other Actions was between the period November 2011 and April 2014 when the Third Party reached a settlement with HSBC. The Third Party had no further involvement in respect of this matter and the Other Actions for the period April 2014 to 17 March 2023. Consequently, the Third Party was of the view that there were no outstanding monies owed by him in relation to this matter until 17 March 2023 when he was served with a Summons for Directions in respect of the Third Party Notice by Counsel for the Second Defendant.

9 On 23 June 2022, the Second Defendant filed an application for HSBC's claim to be struck out for want of prosecution and/or an abuse of process ( the Strike Out Application) on the basis that HSBC had delayed in moving the action forward. Mussenden J (as he was then) heard the Strike Out Application and issued his Ruling on 9 November 2022 ( the Ruling 1). At paragraphs 26 through 34 of the Ruling Mussenden J set out his reasons for his findings that there was (1) no contumelious delay by HSBC, (2) there was no inordinate and/or inexcusable delay by HSBC, and (3) given the first two findings, that there was no delay by HSBC so prejudicial that the action should be struck out.

10 Following the Ruling, the intended trial of this matter was due to commence on 14 November 2022. On this date, the Second Defendant entered a consent judgment with HSBC for the sum of $250,000 ( the Consent Judgment).

Parties' positions

11 Based on the chronology of these proceedings, the Third Party argued that the Second Defendant, despite HSBC's indications beginning with the issuing of the Summons for Directions, the Second Defendant took no action to notify the Third Party that:

• a) the main action was proceeding to trial and directions given;

• b) a trial was listed for 14 to 17 November 2022; or

• c) he intended to pursue his Third Party Notice.

12 The RSC provide direction as it relates to third-party notices in Order 16 which states as follows:

“ 16/1 Third party notice

…

(3) Where a third party notice is served on the person against whom it is issued, he shall as from the time of service be a party to the action (in this Order referred to as a third party) with the same rights in respect of his defence against any claim made against him in the notice and otherwise as if he had been duly sued in the ordinary way by the defendant by whom the notice is issued.

…

16/4 Third party directions

4 (1) If the third party enters an appearance, the defendant who issued the third party notice must, by summons to be served on all the other parties to the action, apply to the Court for directions.

(2) If no summons is served on the third party under paragraph (1), the third party may, not earlier than 7 days after entering an appearance, by summons to be served on all the other parties to the action, apply to the Court for directions or for an order to set aside the third party notice.

(3) On an application for directions under this rule the Court may—

…

(b) order any claim, question or issue stated in the third party notice to be tried in such manner as the Court may direct; or

(c) dismiss the application and terminate the proceedings on the third party notice;

and may do so either before or after any judgment in the action has been signed by the plaintiff against the defendant.

(4) On an application for directions under this rule the Court may give the third party leave to defend the action, either alone or jointly with any defendant upon such terms as may be just, or to appear at the trial and to take such part there in as may be just, and generally may make such order said give such directions as appear to the Court proper for having the rights and liabilities of the parties most conveniently determined and enforced and as to the extent to which the third party is to be bound by any judgment or decision in the action.

…

16/6 Setting aside third party proceedings

6 Proceedings on a third party notice may, at any stage...