W&W Spices Grenada Ltd Claimant v Grenada Nutmeg Products LLC Defendant [ECSC]

JurisdictionGrenada
CourtHigh Court (Grenada)
JudgeTaylor-Alexander, M,V. Georgis Taylor-Alexander
Docket NumberSUIT NO. GDAHCV2009/0471
Date07 June 2013
[2013] ECSC J0607-4

IN THE SUPREME COURT OF GRENADA

AND THE WEST INDIES ASSOCIATED STATES

HIGH COURT OF JUSTICE

SUIT NO. GDAHCV2009/0471

Between:
W&W Spices Grenada Limited
Claimant
and
Grenada Nutmeg Products LLC
Defendant
Appearances:

Cajeton A K Hood of Counsel for the Defendant/Applicant

Anyika Johnson of Counsel for the Claimant/Respondent

Application to strike out statement of case; CPR 26.3 (1) (b) and (c); Abuse of Process; Limitation of Action; Proceedings statute barred by the operation of the Limitation of Actions Act Cap 173 of Grenada; Security for costs.

DECISION
Taylor-Alexander, M
1

The defendant applies to strike out the claim form and statement of claim filed in these proceedings as not disclosing any reasonable ground for bringing the claim and as an abuse of process, likely to obstruct the just disposal of the proceedings, alternatively;

For an order that the claim is stayed until the claimant fully satisfies the judgment of the court in claim GDAHCV2006/0221 to pay to the defendant US$ 1,750,000.00 plus interest on the sum at the rate of 6% per annum from the 30 th June 2006, and costs of $5,000.00, alternatively;

The claimant is to give security for costs, failing which the proceedings are to be struck out.

2

The grounds in support provide the basis for the application and are that:—

  • (a) The claimant has not established any or any sufficient contractual obligation on the part of the defendant capable of sustaining a claim for damages as pleaded in the statement of claim.

  • (b) The issues raised in the claim could have been disposed of in claim GDAHCV2006/0221 and it is an abuse to seek to re-litigate or otherwise try these issues.

  • (c) The judgment in claim GDAHCV2006/0221 remains largely unsatisfied. Only costs of $5,000 have been paid and there is good reason to believe that the claimant would be unable to pay the defendant's costs in these proceedings as the company has ceased to conduct business in the jurisdiction; has no or no sufficient assets in the jurisdiction and has no resident officer in the jurisdiction; as such, the claimant should be required to give security for costs.

3

The application is supported by the affidavit of Ewart Lane which largely provides justification for the grounds adduced in the application.

Factual background
4

The litigants shared a business relationship defined by a Sales and Distribution Agreement, the purpose of which was to market and sell the infamous nutmeg oil of Grenada to markets extending beyond the shores of Grenada. Their business relationship was short-lived and these and earlier proceedings between them arose from difficulties in their contractual relationship. An historical perspective is necessary to understand the proceedings and the application.

5

W&W Spices Grenada Limited is in the main, a producer of nutmeg oil and other like products for sale. On the 1 st of November 2002 it entered into a Sales and Distribution Agreement (SDA) with North Star LLC giving North Star the exclusive right and licence to sell its nutmeg oil to the entire world. The agreement was for a term of two years with an automatic extension for five years unless terminated.

6

On the 12 th of May 2003, North Star LLC assigned all of its rights and obligations under the agreement to Grenada Nutmeg Products LLC and on the same day, the new parties amended the SDA to effect certain changes to the original terms including changing section 3 on the grant of distributorship, by reiterating the grant of the exclusive licence to Grenada Nutmeg Products LLC, but with a new inclusion that allowed for the resale of the nutmeg oil by Grenada Nutmeg Products LLC to a US subsidiary of W&W Spices Grenada Limited, Atlantic Nutrition International LLC, who would sell the product to consumers in the United States and Canada. It was further agreed that upon a request by W&W Spices Grenada Limited the parties could enter into other substantially similar agreements.

7

On that same date, the 12 th May 2003, the parties executed a deed of assignment in which the Bank of Nova Scotia as the holder of various fixed and floating charges over the assets of W&W Spices Grenada Limited intervened and agreed with Products LLC of a further fixed and floating charge over certain assets of W&W Spices Grenada Limited to secure a loan granted by Grenada Nutmeg Products LLC in favour of W&W Spices Grenada Limited of US$1,750,000.00.

9

It was an express term of the deed of assignment that so long as no default existed under the loan, the sole source of repayment of the sums due by W&W Spices Grenada Limited would be payments to Grenada Nutmeg Products LLC at the rate of US$3.50 for each 10ml bottle of product sold by W&W Spices Grenada Limited from time to time.

Claim No. GDAHCV2006/0221
10

Grenada Nutmeg Products LLC the claimant under the earlier proceedings, sued the defendant W&W Spices Grenada Limited a mere three years after the execution of the SDA, in May 2006 for a sum of US$1,750,000.00/ XCD$4,725,000.00 being monies loaned under the deed of assignment. The claimant alleged that the defendant failed to satisfy the demand made, when in violation of the deed of assignment, the defendant, during the month of May 2003 and continuing for an extended period, sold an undisclosed quantity of product for which it failed and or refused to pay amounts due to the claimant. The claimant alleges that after demand was made, the defendant acknowledged the debt and expressed a desire to have the debt settled and payment terms agreed to. Despite this, no payments were made, whereon the sum of US$1,750,000.00/ XCD$4,725,000.00 together with interest and costs became due and owing.

11

By acknowledgement of service filed on the 1 st June 2006, the defendant admitted the whole debt and stated that it did not intend to defend the proceedings. Judgment on admission was granted to the claimant, finally determining the issues that arose under that claim.

GDAHCV2009/0471
12

In these current proceedings filed on the 30 th November 2009, the claimant W&W Spices Grenada Limited being the defendant in the earlier proceedings, brought a claim against the defendant Grenada Nutmeg Products LLC, being the claimant in the earlier proceedings on the basis that the defendant as assignee under the SDA as amended, breached its obligation to sell 4 million units of products annually. The claimant avers that the defendant failed to take delivery of 100,000 (10) ml bottles, which products subsequently expired while awaiting collection by the defendant. The costs of the stock was XCD$934,500.00. The claimant also claimed for the costs of 200,000 (10) ml bottles at XCD$1,869,000.00 produced by the claimant but not shipped due to the defendant's refusal to purchase them. The claim was for a total XCD$3,063,676.55 in other losses and for US$65,174,000.00 for loss of profit over the duration of the agreement.

CONSIDERATION OF THE ASSERTIONS
No reasonable ground to sustain a claim
13

The first challenge by the claimant is brought pursuant to Rule 26.3(1) (b) of the Civil Procedure Rules ( CPR 2000) on the basis that the claim does not disclose any reasonable ground in contract law capable of sustaining a claim for damages.

14

Rule 26.3 (1) (b) provides:—

"In addition to any other power under these Rules, the court may strike out a statement of case or part of a statement of case if it appears to the court that —

  • (a)…….

  • (b) the statement of case or the part to be struck out does notdisclose any reasonable ground for bringing or defending a claim;"

15

The defendant relies on the principles set out in Ian Peters v Robert George Spence HCVAP2009/016, in support of his submission which he says ought to guide the court in the application of CPR part 26.3 (1) (b) It provides:—

  • (i) Whenever the court is required to apply rule 26.3 (1) (b) of the CPR it must approach the matter on the assumption that the primary facts pleaded in the statement of claim are true.

  • (ii) The court may strike out a statement of case if the facts disclosed reveal no legally recognizable claim even though the court has proceeded on the assumption that the facts are true.

16

Ian Peters v Robert George Spence is a restatement of the principles identified in Swain v Hillman [2001] 1 All ER with continues as the seminal authority on the application of that rule. The dictum of Lord Woolf at paragraphs 94 and 95 is useful to the present application. It provides:—

"Useful though the power is under Part 24, it is important that it is kept to its proper role. It is not meant to dispense with the need for a trial where there are issues which should be investigated at the trial. As Mr Bidder put it in his submissions, the proper disposal of an issue under Part 24 does not involve the judge conducting a mini trial, that is not the object of the provisions; it is to enable cases, where there is no real prospect of success either way, to be disposed of summarily."

17

The defendant submits that the following are material facts to be assumed from the pleadings of the claimant:-

  • (i) The claimant and the defendant entered into a contractual relationship by virtue of an Amended Agreement dated the 12 th May 2003;

  • (ii) The defendant failed or refused to accept a shipment of 100,000 (10) ml bottles of products from the claimant;

  • (iii) In the year 2003 the claimant produced 200,000 (10) ml bottles of nutmeg products but this quantity was never shipped to the defendant.

  • (iv) The defendant failed to make other purchases of nutmeg products from the claimant between 2003 and 2009.

  • (v) By virtue of the Deed of Assignment the claimant borrowed the sum of US 1.75 million dollars from the applicant which sum was in the absence of default to be paid out of monies derived from sale of products supplied by the Respondent.

  • (vi) The claimant defaulted on its...

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