Daryl Sands Controller of Bank Crozier Ltd v Garvey Louison Liquidator of Bank Crozier Ltd ((in Liquidation)) v Peter Foster Liquidator of Bank Crozier International Ltd

• Jurisdiction: Grenada
• Judge: THOMAS J.A. (AG.),Justice of Appeal,Errol L. Thomas,Denys Barrow, SC
• Judgment Date: 16 September 2008
• Judgment citation (vLex): [2008] ECSC J0916-3
• Court: Court of Appeal (Grenada)
• Date: 16 September 2008
• Docket Number: HCVAP 2007/001

[2008] ECSC J0916-3

IN THE COURT OF APPEAL

Before:

The Hon. Mr. Denys Barrow, SC Justice of Appeal

The Hon. Mr. Hugh Rawlins Justice of Appeal

The Hon. Mr. Errol L. Thomas Justice of Appeal (Ag.)

HCVAP 2007/001

In the Matter of Bank Crozier Limited (In Liquidation)

And In the Matter of the Offshore Banking Act, 1996, No. 39

And In the Matter of the Companies Act, 1994, No. 35

And In the Matter of the International Companies Act, Cap. 152

Between:

Daryl Sands Controller of Bank Crozier Limited

Appellant/Applicant

and

Garvey Louison Liquidator of Bank Crozier Limited (In Liquidation)

First Respondent

and

Peter Foster Liquidator of Bank Crozier International Limited

Intervener/Second Respondent

Appearances:

Mr. Steven Singh and Ms. Leslie Ann Seon for the Appellants

Mr. C.E. Lashley, QC and Mr. Sean Lewis for the First Respondent

Mr. Anthony Astaphan, SC for the Second Respondent

Civil Procedure — Leave to Appeal to her Majesty in Council — appeal as of right — appeal of general or public importance — section 104 of the Constitution of Grenada

The appellant applied to the High Court for a determination of the question whether he was entitled to be indemnified out of the assets of the Bank in priority to the general body of creditors, like a court appointed receiver, for all costs and expenses arising from his function as controller, including contingent liabilities. The learned judge decided that the appellant was not entitled to an indemnity secured by the assets of the Bank as the laws of Grenada made no provision for such an indemnity, which decision was upheld on appeal. The appellant sought leave of the court to appeal to Her Majesty in Council on the ground that the appeal lies as of right under section 104(1)(a) of the Constitution being a dispute which is of a value of fifteen hundred dollars or upwards or, that the issues raised on appeal were of general or public importance under section 104(2)(a) of the Constitution.

Held: refusing the application for conditional leave to Her Majesty in Council and awarding costs to the respondent:

• (1) An applicant must apply to the Court of Appeal for leave even where an appeal lies as of right.

  William Martin v Ursil Peters Antigua and Barbuda Civil Appeal No. 36 of 2004 which applied Electrotec Services Ltd. v Issa Nicholas (Grenada) Ltd. (No. 1) [1998] 1 WLR 202 followed.

• (2) The issue before the court did not relate to a "value" but the existence of a right to indemnity. As such, the issue upon which leave to appeal to Her Majesty in Council was sought did not fall within the purview of section 104(1)(a) of the Constitution.

• (3) The court is permitted to grant leave under section 104(2)(a) of the Constitution where the appeal involves a question of great general or public importance. The criteria to be considered by the court when granting conditional leave to appeal under section 104(2)(a) are whether there is a serious question of law to be tried, a constitutional provision or area of law which has not been settled or a legal question, the resolution of which presents dire consequences for the public. The court was satisfied that the issue of an entitlement to an indemnity in priority to other creditors was an ordinary issue of law, which did not fall within any of these categories so as to justify the grant of leave under section 104(2)(a) of the Constitution.

  Martinus Francois v The Attorney General Saint Lucia Civil Appeal No. 37 of 2003 followed. Barbados Sugar Industry Ltd. v Barbados National Bank and others (No 2) [1995] 50 WIR 64, Vehicles and Supplies Limited et al v The Minister of Foreign Affairs, Trade and Industry [1989] 26 JLR 390, Daily Telegraph Newspaper Company Limited v McLaughain [1904] AC 776, Etoile Commerciale SA v Owens Bank Ltd (No.2) [1993] 45 WIR 136 and Douglas and Other v Pindling [1996] 48 WIR 1 considered.

THOMAS J.A. (AG.)

1 Before the court, is an application for the grant of conditional leave to appeal to Her Majesty in Council from the judgment of this court, delivered on 26^th November 2007.

Background

2 In broad outline, the entire proceedings center on Bank Crozier Limited ("the Bank"), which was licensed in Grenada as an offshore bank pursuant to theOffshore Banking Act 1996 No. 39 ("the Act"). Also in the equation are Daryl Sands and Garvey Louison, former controller and liquidator of the Bank, respectively.

3 The Bank became insolvent which resulted in the Minister of Finance, Government of Grenada, appointing Daryl Sands as the controller of the Bank pursuant to section 20(1) of the Act and at a later date the Bank's license was revoked.

4 On 24^th July 2003 following the filing of a winding-up petition, Madam Justice Charmaine Pemberton ordered the Bank to be wound up and appointed Garvey Louison as liquidator.

5 This application for conditional leave to appeal to the Privy Council has its origins in the decision of Baptiste J of 20^th December 20061 in which he determined, inter alia, that Mr. Daryl Sands as Controller of the Bank had no right of indemnification from the estate of the Bank with respect to all costs and expenses arising from his

functions as Controller. Specifically, His Lordship held that the laws of Grenada made no provision for an indemnity to be imposed or granted to a person.

6 On appeal, Justice of Appeal Denys Barrow, SC in giving the decision of the court noted that2:

"The principal issue on this appeal is whether a Controller, appointed pursuant to theOffshore Banking Act… 'with like power of a receiver under the Bankruptcy Act' to control the affairs of an offshore bank that subsequently went into liquidation, is entitled to be indemnified like a court appointed receiver, for all costs and expenses arising from his function as controller, including contingent liabilities, out of the funds of the bank in priority to the general body of creditors."

7 The appeal was dismissed with prescribed costs to the liquidator.

The Appeal

8 The notice of application filed by the appellant reads thus: The Applicant Daryl Sands Controller of Bank Crozier Limited hereby applies to the Court for an Order that:

• "1. The Appellant/Applicant be granted conditional leave to appeal to Her Majesty in Council from the judgment of the Court of Appeal (comprising The Honourable Mr. Justice Denys Barrow, S.C., The Honourable Mr. Justice Hugh Rawlins, Justices of Appeal and the Honourable Mrs. Dancia Penn-Sallah, Q.C., Justice of Appeal [Ag.]) given on the 26^th of November, 2007 and upon such conditions and security as may be deemed just and further and Order;

• 2. An Order for a Stay of Execution of the said Judgment of the Court of Appeal until the hearing and determination of the Appeal to Her Majesty in Council; and

• 3. An Order that the Conservatory Order of the Court of Appeal made on the 26^th day of November, 2007 do continue until the hearing and determination of the Appeal to Her Majesty in Council."

9 The grounds of the application are as follows:-

• 1. The said judgment of the Court of Appeal is a final decision in civil proceedings.

• 2. The matter in dispute on appeal to Her Majesty in Council is of value of upwards of $1,500.00 which involves questions respecting property or rights of a value of upwards of $1,500.00.

• 3. By virtue of Section 104(1) of theConstitution of Grenada, an Appeal lies as of right from the decision of the Court of Appeal to her Majesty in Council.

• 4. Further, the questions involved in this appeal (namely, whether the Appellant/Applicant who was appointed by the Minister as Controller was/is entitled to a right of indemnification out of assets of the Bank in priority to all claims other than the claims of secured creditors, and whether the Second Respondent ought to be granted leave to intervene where the Bank is in liquidation) are that by reason of their great general or public importance, ought to be submitted to Her Majesty in Council by virtue of Section 104(2) (a) of theConstitution of Grenada.

• 5. The Appellant/ Applicant is dissatisfied with the said Judgment of the Court of Appeal and is desirous of exercising his constitutional right of appeal to Her Majesty in Council and in the event that the appeal succeeds, the judgment of Her Majesty's Privy Council would be rendered nugatory as the funds would be distributed to insolvent creditors of Bank Crozier Limited, which itself is in liquidation. Alternately, this Honourable Court ought in all the circumstances ensure that the estate of the insolvent Bank ispreserved pending the hearing and determination of the Appeal to Her Majesty in Council."

10 The application for leave is supported by an affidavit sworn to on 17^th December 2007 by Ms. Leslie Ann Seon, principal Solicitor in the firm of Seon & Associates, Instructing Solicitors for the Appellant. In the affidavit Ms. Seon outlines the history of the matter, the issues arising in the appeal, the grounds of the application and the prayer.

The governing law

11 As indicated in the notice of application, the application depends on section 104 of theConstitution of Grenada ("the Constitution") which is in fact the governing constitutional law. Section 104(1) to (3) provide as follows:

"104(1) Subject to the provisions of section 37(7) of this Constitution, an appeal shall lie from decisions of the Court of Appeal to Her Majesty in Council as of right in the following cases-

• (a) where the matter in dispute on the appeal to Her Majesty in Council is of the value of fifteen hundred dollars or upwards or where the appeal involves directly or indirectly a claim to or question respecting property or a right of the value of fifteen hundred dollars or upwards, final decisions in any civil proceedings;

• (b) final decisions proceedings for dissolution or nullity of marriage;

• (c) final decisions in any civil or criminal proceedings which involve a question as to the...