Hunts Sanitation Services Ltd v The Minister of Finance

• Jurisdiction: Bermuda
• Judge: Mussenden J
• Judgment Date: 14 May 2021
• Docket Number: CIVIL JURISDICTION
• Court: Supreme Court (Bermuda)

[2021] SC (Bda) 39 Civ

In The Supreme Court of Bermuda

Mussenden J

CIVIL JURISDICTION

2020: No. 274

Between:

Hunts Sanitation Services Limited

1 ^st Plaintiff

Hunts Quarry Services Ltd

2 ^nd Plaintiff

Hunts Food and Supplies Limited

3 ^rd Plaintiff

and

The Minister of Finance

Defendant

Appearances:

Michael Scott, Browne Scott, for the Plaintiffs

Wendy Greenidge, Attorney-General's Chambers, for the Defendant

Application to strike out writ, no reasonable cause of action, frivolous or vexatious, abuse of process, quantum meruit, whether action is time barred

RULING

RULING of Mussenden J

Introduction

1 The Plaintiffs commenced these proceedings by a Specially Indorsed Writ of Summons ( “the Writ”) issued on 21 August 2020. The claim is for monies due for the provision of labour and equipment, in connection with a purported excavation agreement between the Plaintiffs and Defendant ( “the Minister”).

2 By Summons dated 11 December 2020 the Defendant seeks an Order that the Plaintiffs' Writ (a) be struck out pursuant to the Rules of the Supreme Court ( “RSC”) Order 18 r.19(1) on the grounds that it discloses no reasonable cause of action, it is frivolous and vexatious, and is otherwise an abuse of the process of the Court; and (b) be dismissed on the grounds that the Plaintiffs' alleged cause of action is time barred pursuant to section 4 and 7 of the Limitation Act 1984 ( “the 1984 Act”). The Summons is supported by the Affidavit of the current Permanent Secretary (“ PS 1”) for Public Works Randolph Rochester ( “PS Rochester”) sworn 4 December 2020 along with Exhibits “RR1 — RR2”.

3 The Plaintiffs resist the strike-out application. They rely on the First Affidavit of Nelson Milburn Hunt (“ Mr. Hunt”) sworn on 3 February 2021 along with Exhibits “ NMH1 — NMH3”.

4 Having heard Mrs. Greenidge for the Minister and Mr. Scott for the Plaintiffs on the Defendant's Summons, I reserved my ruling which I now provide together with reasons herein.

Summary of the Plaintiff's Pleaded Case as set out in the Statement of Claim (“SOC”)

5 The Plaintiffs are local companies incorporated in Bermuda. The 2nd and 3 ^rd Plaintiffs are registered with the Department of Social Insurance and are obliged to pay employee and employer contributions in respect of the social insurance benefit. During the period January 2012 to August 2019, the 2 ^nd Plaintiff and 3 ^rd Plaintiff incurred debts of social insurance benefit payments in the amounts of $139,659.14 and $188,907.88 respectively for a total between them of $326,727.02 (“ the Social Insurance Debts”). The Defendant commenced actions for the Social Insurance Debts in the Magistrates' Court (“ the Social Insurance Claims”) and on 20 January 2020 the Defendant obtained judgment in the Magistrates' Court against the 2 ^nd and 3 ^rd Plaintiffs in the amount of $139,659.14 and $188,907.88 respectively.

6 From on or about 20 January 2020, the 1st Plaintiff has had a viable claim against the Defendant for certain remediation and cleanup services it carried out at Morgan's Point, Southampton for the Bermuda Government (“ the Remediation Works”) in the sum of $908,766.60 (“ the Remediation Claim”). The Remediation Claim existed as a counterclaim to the Social Insurance Claims. The Magistrate Court granted the Plaintiffs time to pursue the Remediation Claim against the Defendant in the Supreme Court such that in time it would stand as a set-off against the total Social Insurance Debts of $326,727.02.

7 The Remediation Claim arose as a result of some events beginning in or around 2009 based upon a land swap of property at Southlands, Warwick for property at Morgan's Point, Sandys. For financial investment purposes, the contaminated land at Morgan's Point had to be remediated to industry standards.

8 The then Minister of Public Works and the then PS requested the 1 ^st Plaintiff to carry out the Remediation Works on a ‘cost and charge’ basis. In 2009 the 1st Plaintiff was not successful in securing a contract for the Remediation Works but in June 2011, the 1st Plaintiff began the Remediation Works. In December 2011 the Ministry of Public Works verbally requested the 1st Plaintiff to cease its Remediation Works. However, it continued the cleanup work and in February/March 2012 it invoiced the Bermuda Government for $774,368. An April 2012 Cabinet Memorandum submitted by the then PS Horton recommending a retroactive contract award for $226,570 for the 1st Plaintiff was rejected by the then Minister of Finance. On 19 February 2015 the then PS O'Brien sent a letter to the Plaintiffs' Director Mr. Hunt stating that the Government had no evidence of an agreement with the 1st Plaintiff for the Remediation Works and that it was satisfied it was under no obligation in regards of the Remediation Claim (“ the Denial Letter”). The evidence of PS Rochester and Mr. Hunt exhibited the Denial Letter.

9 The 1 ^st Plaintiff relies on the facts of the visits to Morgan's Point to observe the Remediation Works by the then Minister of Public Works and his representatives (various Public Works officials including the Chief Engineer) and their encouragement as approval for the 1 ^st Plaintiff to carry out the said Remediation Works notwithstanding the absence of formal Bermuda Government Cabinet approval.

10 The Plaintiffs assert their claims to set off and that they are owed the claimed amount of $908,766.60 on a quantum meruit basis in law.

Summary of the Defendant's Strike Out Application

11 The Defendant seeks to strike out the Plaintiffs' Writ in its entirety on several grounds.

Action is statute-barred under the 1984 Act

12 First, Mrs. Greenidge submits that the action against the Defendant is statute-barred pursuant to the 1984 Act on the basis that the cleanup work was carried out between 2011 and March 2012. Therefore the limitation period ended in March 2018. The proceedings were commenced by this Writ filed on 21 August 2020, some eight (8) years and five (5) months from the date on which the cause of action accrued. Mrs. Greenidge relies on section 4 and 7 of the 1984 Act which state as follows:

“Time limit; actions founded on tort

4 An action founded on tort shall not be brought after the expiration of 6 years from the date on which the cause of action accrued

Time limit; actions founded on simple contract

7 An action founded on simple contract shall not be brought after the expiration of 6 years from the date on which the cause of action accrued.”

13 Mrs. Greenidge submits that based on the Statement of Claim and Mr. Hunt's affidavit that a cause of action on either contract or tort would have accrued before the limitation period of six years and therefore it was statute-barred unless it can be shown that the Plaintiffs' case falls within an exception under the 1984 Act. Also, as the Plaintiffs are seeking a remedy on the basis of quantum meruit, that is also time barred under section 37 of the 1984 Act.

14 Mrs. Greenidge submits that in his First Affidavit, Mr. Hunt seeks to rely on an email dated 15 January 2013 from the then PS Horton to extend the limitation period on the basis of acknowledgment of the debt (“ the Acknowledgement Email”). However, Mrs. Greenidge submits, as supported by PS Rochester's evidence, that there is no debt owed by the Defendant and the said Acknowledgement Email is not an acknowledgment of debt for the purposes of section 30(5) and (7) and sections 31(1) and (2) of the 1984 Act. She relied on the case of Global Construction Limited v Hamiltonian Hotel & Island Club Ltd 2005 No. 226 [2005] Bda LR 81 at para 20 where Kawaley J stated:

“The law is clear that this type of statement is not an “acknowledgement” of debt. In Halsburys Vo1 28 para 1083 [Tab 4] commentary, it states:

“For there to be an acknowledgement of a claim there must be an admission that there is a debt or other liquidated amount outstanding and unpaid Good v Parry [1963] 2 ALL ER 59””

15 Mrs. Greenidge submits that although Mr. Hunt refers to the Denial Letter as the time when he became aware of his right to bring a claim against the Government, the Plaintiffs failed to bring the action before the Courts between February 2015 and March 2018, before the expiry of the limitation period. She relied on the case of Harold Darrell and Richard Horseman [2018] SC (Bda) 23 Civ at para 39 where Rihluoma AJ stated that Wade-Miller J ruled:

“Blaming the excessive delay upon erroneous legal advice is not an acceptable excuse in law”.

16 Mrs. Greenidge also relied on Harold Darrell and Richard Horseman at para 42 where Rihluoma AJ stated as follows:

“In the circumstances I find that Mr. Darrell's claim is hopelessly out of time and that section 33 of the Limitation Act and Rule 13 of the Barristers' Code of Conduct do not apply so as to enlarge the time for the bringing of these proceedings. Accordingly, I rule that Mr. Darrell's Writ and Statement of Claim be struck out as showing no realistic possibility of success.”

Action is frivolous and vexatious

17 Second, the Defendant submits that the Statement of Claim should be struck out on the basis that it is frivolous and vexatious as it is plain and obvious from the pleadings that the Plaintiffs' claim is statute-barred and the prospect of obtaining an extension or exception under the 1984 Act is highly unlikely. Mrs. Greenidge submits that the Denial Letter clearly sets out the Government's position in relation to the Plaintiffs' claim, however the Plaintiffs took too long to bring the matter before the Courts within the limitation period. She relied on the case of Metropolitan Bank and another v Pooley [1881–85] All ER Rep 949 where the House of Lords stated as follows:

“There is an inherent power in every court of justice to stay a manifestly vexatious suit and so protect itself from abuse of its procedure. An action is frivolous and vexatious where upon...