Hunts Sanitation Services Ltd and Ors v Minister of Finance

• Jurisdiction: Bermuda
• Judgment Date: 14 May 2021
• Docket Number: Civil Jurisdiction 2020 No 274
• Court: Supreme Court (Bermuda)

[2021] Bda LR 43

In The Supreme Court of Bermuda

Civil Jurisdiction 2020 No 274

Between:

Hunts Sanitation Services Limited

Hunts Quarry Services Ltd

Hunts Food and Supplies Limited

Plaintiffs

and

Minister of Finance

Defendant

Mr M Scott for the Plaintiffs

Ms W Greenidge for the Defendant

The following cases were referred to in the judgment:

Global Construction Ltd v Hamiltonian Hotel & Island Club Ltd [2005] Bda LR 81

Darrell v Horseman [2018] Bda LR 21

Metropolitan Bank and anor v Pooley [1881–85] All ER Rep 949

Riches v DPP [1973] 1 All ER 942

Hubbuck v Wilkinson [1899] 1 QB 86

Drummond-Jackson v British Medical Association [1970] 1 WLR 688

Moorgate Capital (Corporate Finance) v HIG European Capital Partners LLP [2019] EWHC 1421

Sandals Resorts International Ltd v Neville L Daley and Co Ltd [2016] JMCA Civ 35

Test Claimants in the Franked Investment Income Group Litigation and Ors v Commissioners for HM Revenue and Customs [2020] UKSC 47

Republic of Peru v Peruvian Guano Co (1887) 36 ChD 489

Horton v Sadler [2007] 1 AC 307

Boyo v Lloyds Bank plc [2019] EWHC 2279

Fidelity National Title Insurance Co v Trott & Duncan Ltd [2019] Bda LR 8

Sampson v Estate of Joell [2016] Bda LR 11

Kleinwort-Benson v Lincoln CC [1999] 2 AC 349

IGE USA Investments Ltd and Ors v Commissioner for HM Revenue and Customs [2021] EWCA Civ 534

Application to strike out writ — No reasonable cause of action — Whether time barred — Set off — Work performed to pay off debts for social insurance payments — Work performed in excess of debts — Claim for monies owed — Quantum meruit — Whether settlement talks between parties can extend limitation period

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”) 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 2^nd 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 2nd Plaintiff and 3rd 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 2nd and 3rd 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 1st 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 1st 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 1st 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] 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] Bda LR 21 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...