Raymond Davis v The Minister of Finance The Attorney General

• Jurisdiction: Bermuda
• Judgment Date: 05 September 2017
• Date: 05 September 2017
• Docket Number: Civil Jurisdiction 2014 No 4
• Court: Supreme Court (Bermuda)

[2017] Bda LR 91

In The Supreme Court of Bermuda

Civil Jurisdiction 2014 No 4

Between:

Raymond Davis

Plaintiff

and

The Minister Of Finance

The Attorney General

Defendants

Mr M Diel for the Plaintiff

Mr J Cooper for the Defendants

The following cases were referred to in the judgment:

Oatham v Dickens & Gibbons [1977] Bda LR 1

Cates and Panchaud v Dill [1956] Bda LR 1

Donoghue v Stevenson [1932] AC 562

Customs and Excise Commissioners v Barclays Bank plc [2007] 1 AC 181

Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465

Stovin v Wise [1996] AC 923

Henderson v Merrett Syndicates Ltd (No 1) [1995] 2 AC 145

Caparo Industries plc v Dickman [1990] 1 AC 605

Business Computers International Ltd v Registrar of Companies [1988] Ch 229

Al-Kandari v JR Brown & Co [1988] QB 665

Horner v WD Irwin & Sons Ltd [1972] NI 202

Benjamin v KPMG Bermuda [2007] Bda LR 22

Trial of preliminary issue — Negligence — Economic loss — Duty of care to take reasonable steps to have Cause Book amended to record satisfaction of judgment

JUDGMENT of Hellman J

Introduction

1. This is the trial of a preliminary issue, namely whether the First Defendant as judgment creditor owed the Plaintiff as judgment debtor a duty of care in negligence to take reasonable steps to have the Cause Book amended to record that judgment had been satisfied. No claim is made against the Second Defendant, who was joined at a time when the Plaintiff was not clear as to the identity of the proper defendant. The Plaintiff claims that as a result of the First Defendant's breach of duty he has suffered substantial economic loss.

Background

2. The Plaintiff, Raymond Davis, is better known as Khalid Wasi, the respected writer, activist and political commentator. With his leave, I shall refer to him as Mr Wasi. He is also a businessman, and it is in that capacity that he brings this action. He was the majority shareholder of a company known as Pembroke Laundromat Ltd (“the Company”), which ran a laundry business in Pembroke. The Company ran into difficulties and in September 1996 the Court made an order appointing the Official Receiver as provisional liquidator. The situation resolved itself in around July 1997 when the Official Receiver accepted an offer from the minority shareholder, Collins Smith (“Mr Smith”) to purchase the Company's business.

3. The Company's creditors included the Government of Bermuda, which had brought several actions against the Company and its shareholders. These included Claim No: 1996/159, in which the First Defendant, the Minister of Finance (“the Minister”), had on 25^th September 1996 obtained a default judgment for $16,530.97, including interest and costs, against Mr Wasi and Mr Smith for arrears of hospital levy and employment tax.

4. The Minister agreed to accept a payment of $31,687.80 from Mr Smith in full and final settlement of the Government's claims in these actions, including Claim No: 1996/159. The Accountant General received payment of that sum from Mr Smith via the provisional liquidator on 16^th September 1997.

5. The actions were recorded in the Cause Book maintained by staff at the Supreme Court Registry. The Cause Book contains a record of every action commenced in Bermuda. Eg the names of the parties; when the action was commenced; and whether judgment has been awarded in favour of either party and, if so, in what amount. There is a “remarks” column for every action in which are entered such details as when an action is discontinued and when judgment has been satisfied. By convention, the attorney for the plaintiff (or defendant on a successful counterclaim) will write to the Registry to notify them when the judgment in an action has been satisfied, and the Registry will write back acknowledging receipt of the letter and inviting the attorney to attend at the Registry to update the Cause Book accordingly. The Cause Book is open to inspection by the public on payment of a fee, which is presently $5.00.

6. In Bermuda, by reason of section 1 of the Real Estate Assets Act 1787, a judgment constitutes a lien on the judgment debtor's land. See Oatham v Dickens & Gibbons[1977] Bda LR 1 SC per Summerfield CJ at para 12, following the judgment of Smith AJ in Cates and Panchaud v Dill[1956] Bda LR 1 SC. The lien runs with the land, and will not be overreached even if the land is sold to a bona fide purchaser for value as the judgment is deemed to constitute notice of the lien to the purchaser. Thus section 19(a) of the Supreme Court Act 1905 provides that judgments shall, as regards bona fide purchasers for valuable consideration, affect lands, tenements and hereditaments only as from the date on which they are signed. This was acknowledged in Cates and Panchaud v Dill at para 65.

7. A prospective purchaser will think twice about purchasing land from someone with an unsatisfied judgment shown against them in the Cause Book, as if the judgment is unsatisfied the judgment creditor could levy execution against the land to enforce it even if the land no longer belongs to the judgment debtor. It is therefore important for a judgment debtor who owns land that once the judgment has been satisfied this is recorded in the Cause Book. This may also be important to a judgment debtor for other reasons, irrespective of whether he owns land, eg for purposes of his credit rating.

8. Mr Wasi contends that the Minister owed him a duty of care in negligence to take reasonable steps to ensure that the Cause Book was updated to record that the judgment against him had been satisfied, and to discontinue the other two actions against him and take reasonable steps to have the Cause Book marked accordingly. However it was not until 28^th July 2009 or thereabouts that the Second Defendant, the Attorney General, acting through his Chambers on instructions from the Ministry of Finance, notified the Supreme Court Registry that the judgment in Claim No: 1996/159 had been satisfied.

9. Following the hearing, I inspected the relevant entries in the Cause Book with the Registrar. I was surprised to find that the judgment in Claim No: 1996/159 has not been marked as satisfied. Another of the actions which was covered by the settlement payment, Claim No: 1996/369, has yet to be marked as discontinued.

10. Mr Wasi contends that the Minister's failure to act in a timely manner to have the Cause Book updated was a negligent breach of his duty of care and that as a result of that breach Mr Wasi has suffered economic loss. On 14^th January 2014 Mr Wasi issued a...