Re Trott; Simmons v McCann and Bosch

• Jurisdiction: Bermuda
• Judgment Date: 22 October 2014
• Date: 22 October 2014
• Docket Number: Civil Jurisdiction 2012 No 260
• Court: Court of Appeal (Bermuda)

[2014] Bda LR 96

In The Supreme Court of Bermuda

Civil Jurisdiction 2012 No 260

Between:

Judith Ethel Ann Simmons (As Executor of the Estate of Gladstone WC Trott)

Plaintiff

and

David Garth McCann

Carlos Bosch

Defendants

Ms S Hanson for the Plaintiff

Mr P Harshaw for the 2^nd Defendant

The following cases were referred to in the judgment:

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

Dobie v Interinvest (Bermuda) Ltd and BlackBDLR [2009] Bda LR 31

Wakefield and Accardo v Marshall et alBDLR [2010] Bda LR 553

M & M Construction Ltd v VigilanteBDLR [2012] Bda LR 6

Ball v LambertBDLR [2001] Bda LR 81

George Moundreas & Co SA v Navimpex Centrala Navala (unreported, The Times, 21 March 1983)

Application to set aside judgment — Promissory note — Proper service of the writ — Whether note signed as principal or agent — Agency — Consideration

RULING of Kawaley CJ

Introductory

1. The 2^nd Defendant applies by Summons dated May 13, 2014 to set aside a Judgment in Default of Defence entered in favour of the Plaintiff on January 8, 2014. The Plaintiff's Specially Indorsed Writ was issued on July 25, 2012 and the 2^nd Defendant entered an unconditional appearance on August 27, 2012.

2. The action was originally commenced in the name of the now deceased Gladstone Trott. His executor was named Plaintiff in place of the deceased by consent on October 10, 2013. Until this juncture, the 1^st and 2^nd Defendant were jointly represented by Wakefield Quin Limited. The 2^nd Defendant's present attorneys filed a Notice of Change of Attorneys on his behalf on April 10, 2014, in response to the Plaintiff's attempt to execute the Default Judgment.

3. On May 8, 2014, Hellman J ordered as follows:

‘1. execution of the judgment herein against the second-named Defendant, Carlos Bosch, be stayed until the first instance determination of his application to set aside the judgment or further order of the Court; and

2. the costs of and occasioned by this order are reserved to the determination of the second-named Defendant's application to set aside Judgment.’

4. It was common ground that the primary consideration in determining whether or not to set aside the Judgment was whether the 2^nd Defendant was able to ‘show that he has a defence which has a real prospect of success’: Alpine Bulk Transport Co Inc v Saudi Eagle Shipping Co IncUNK[1986] 2 Lloyd's Rep 221 at 223 (Sir Roger Ormrod). This approach has been approved in a variety of local cases to which the Plaintiff's counsel referred: Dobie v Interinvest (Bermuda) Ltd and BlackBDLR[2009] Bda LR 31; Wakefield and Accardo v Marshall et alBDLR[2010] Bda LR 53; M & M Construction Ltd v Vigilante[2012] Bda LR 6 (also cited by Mr Harshaw). The 2^nd Defendant's counsel additionally referred to Ball v LambertBDLR[2001] Bda LR 81.

5. Ms Hanson invited the Court to have regard to the manner in which the 2^nd Defendant has defended the present claim and to refuse the application to set aside judgment in any event following the approach adopted in Wakefield and Accardo v Marshall et alBDLR[2010] Bda LR 53, where Wade-Miller J held:

‘Additionally, in arriving at a decision the court is entitled to look at the First Defendant's conduct and statements and ascertain if in the circumstances it should disentitle him from proceeding. Delay in itself is not a bar to proceedings but the nature of the delay and any disadvantage to the other side caused by the delay can be taken into account.’

6. It was also common ground that the Default Judgment should be varied as the 2^nd Defendant's liability rested upon, if anything, one promissory note which he signed jointly with the 1^st Defendant. Under the first note dated 19^th November 2006, the Defendants promised to pay $500,000 together with interest at the rate of 10% (‘the Note’). The Plaintiff also sought to vary the quantum of the Judgment under the Note as against both Defendants, even though no challenge was made by the 1^st Defendant to the Judgment at all. This was in part because, as a result of queries on quantum raised by the 2^nd Defendant, the original Plaintiff's executor had reviewed the deceased records, compiled while the original Plaintiff (‘Mr Trott’) was of a very advanced age, and ascertained that credit should be given for extra payments totalling $24,139.19.

7. The 1^st Defendant was also liable under a second promissory note.

8. Subsidiary issues were (a) whether the 2^nd Defendant had been properly served with the Writ, and (b) whether, if all other issues were resolved against the 2^nd Defendant, he should be given leave to defend with respect to the amount of approximately $37,371.22 which he contended might be revealed, through discovery of corporate records under the control of the 1^st Defendant, had also been repaid.

Findings: has the 2nd Defendant shown a case with real prospects of success for denying liability on the Note altogether?

Factual findings

9. I approach the present application by assuming in the 2^nd Defendant's favour that:

• i. at all material times only the 1^st Defendant was both a...