David Louis v Diwi Engineering Ltd

• Jurisdiction: Grenada
• Judge: Actie, J.
• Judgment Date: 28 October 2024
• Judgment citation (vLex): [2024] ECSC J1028-2
• Docket Number: CLAIM NO. GDAHCV2022/0210 (formerly GDAHCV2018/0327)
• Court: High Court (Grenada)

In the Matter of An Action for Wrongful Dismissal

and

In the Matter of An Application Pursuant to Section 77 of the Companies Act Cap. 58A of the 2010 Continuous Revised Laws Of Grenada

Between:

David Louis

Claimant

and

DIWI Engineering Ltd.

Defendant

Before:

The Hon. Mde. Justice Agnes Actie High Court Judge

CLAIM NO. GDAHCV2022/0210 (formerly GDAHCV2018/0327)

IN THE SUPREME COURT OF GRENADA

AND THE WEST INDIES ASSOCIATED STATES

HIGH COURT OF JUSTICE

(CIVIL)

Appearances:

Ms. Karen Samuel for the Claimant

Ms. Zelica Haynes-Soo Hon with Mr. Kerri-Ann Oliverie instructed by Ms. Dia Forrester for the Defendant

Actie, J.

1 The claimant seeks redress for breach of Section 77 of the Companies Act and damages for wrongful dismissal.

Brief Facts

2 The claimant avers that he was employed by the defendant as Resident Engineer, Company Manager and most Senior Executive Officer in or about February 2016 until his dismissal on or about 14 ^th December 2017.

3 The claimant avers that prior to his employment with the defendant, he was employed with DIWI Germany GmbH in the post of Resident Engineer from 9 ^th May 2013.

4 The claimant avers that DIWI Germany GmbH discontinued operations due to bankruptcy and the defendant was subsequently incorporated with the primary objective of taking over, continuing the work and employing substantially all the facilities and employees of DIWI Germany GmbH.

5 The claimant further avers that by express or tacit agreement, the defendant did in fact, as intended, take the claimant and all other staff of DIWI Germany GmbH into its employment upon the same terms and conditions of their appointments with DIWI Germany GmbH.

6 The claimant states he was removed from the post and his duties by the defendant without or adequate notice. The claimant considers that the actions of his removal were calculated with malicious intent, and served to frustrate his contract of employment, as employee of the defendant. The claimant further states that the defendant's actions were calculated to destroy the good faith, trust and confidence of their employment relationship which made it impossible for him to continue in the defendant's employment.

7 The claimant avers that he demanded to be paid all remuneration and benefits due to him by the defendant, but that to date, the defendant has failed and/or refused to pay to him the sums due. The claimant in a claim form filed on 15 ^th October 2018 claims, a declaration that his removal from the post as director of the defendant was unlawful and in breach of his contract of employment; a declaration that the defendant acted recklessly, deliberately and/or maliciously in refusing to file a notice of change to remove the claimant's name as a director of the defendant in violation of Section 77 of the Companies Act; an order that the defendant do give to the claimant a full and unqualified indemnity in respect of all acts and omissions of the claimant and to rectify the Companies Register; a declaration that the claimant was wrongfully dismissed by the defendant on or about 14 ^th December 2017; general and exemplary damages; interest and costs.

The Defendant's case

8 The defendant denies that the claimant was appointed as resident engineer and company manager during the period as alleged. The defendant states that the claimant was appointed as manager on 14 ^th December 2017.

9 The defendant avers that by by-law 4.4.1, the claimant remained a director of the defendant until he effectively notified the defendant by letter dated 28 ^th December 2017 that he deemed himself to no longer be providing his services to the defendant. By letter of 29 ^th December 2017 the defendant informed the claimant that it had not terminated his services to the defendant.

10 The defendant asserts that the claimant was never removed as a director nor as an officer of the defendant either in law or otherwise, and avers that the Companies Registrar was notified of the change of directorship of the defendant.

Legal Analysis

Whether the defendant is in breach of Section 77 of the Companies Act

11 Section 77 of the Companies Act Cap 58A on which the claimant relies states:

“(1) Within fifteen days after a change is made among its directors, a company shall send to the Registrar a notice in the prescribed form setting out the change; and the Registrar shall file the notice.

(2) Any interested person, or the Registrar, may apply to the court for an order to require a company to comply with subsection (1); and the court may so order and make any further order it thinks fit”

12 Counsel for the claimant argues that since the defendant has, up to 2019, refused to file a notice of change of directors, the public is entitled to hold the claimant responsible for acts of the defendant in appropriate circumstances.

13 Section 99 of the Companies Act CAP 58A gives the defendant the liberty to indemnify a former director or officer of the company in the following manner:

“(1) Except in respect of an action by or on behalf of a company or body corporate to obtain a judgement in its favour, a company may indemnify—

(a) a director or officer of the company;

(b) a former director or officer of the company; or

(c) a person who acts or acted at the company's request as a director or officer of a body corporate of which the company is or was a shareholder or creditor, and his or her legal representatives, against all costs, charges and expenses (including an amount paid to settle an action or satisfy a judgement) reasonably incurred by him or her in respect of any civil, criminal or administrative action or proceeding to which he or she is made a party by reason of being, or having been, a director or officer of that company or body corporate.

(2) Subsection (1) does not apply unless the director or officer to be so indemnified—

(a) acted honestly and in good faith with a view to the best interests of the company; and

(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his or her conduct was lawful.”

14 The claimant contends that he is entitled to a rectification of the Companies Register of the change of directors removing him, and an indemnity in respect of all acts and omissions of the defendant occurring since 14 ^th December 2017 until the date of filing the notice of change of directors.

15 The claimant, as a former director, has sufficient standing for this court to so order the compliance of the defendant to Section 77 of the Companies Act CAP 58A. It is the evidence that the claimant is not a director of the defendant. The claimant in a letter dated 28 ^th December 2017 wrote the defendant indicating that he deemed himself to no longer be providing services to the defendant. The defendant in the circumstances ought to have filed the appropriate notice reflecting the change of the directors of the company within fifteen days thereof, as prescribed by statute.

16 Although the defendant asserts in pleadings that the prescribed documentation for the change of directors was filed with the Companies Registry, no proof of same has been laid before the court. In fact, the filed company documents on which the defendant relies demonstrates that the claimant is an active director of the defendant.

17 Given the defendant's failure to so file the notice of change of directors relieving the claimant from liability, this court finds that the defendant is in violation of Section 77 of the Companies Act.

Whether the claimant had a contract of employment with the defendant

18 The determination of the alleged wrongful dismissal of the claimant and the breach of trust and confidence of the employment relationship by the defendant is dependent on the existence of a contract of employment between the parties.

19 A contract of employment need not be in any particular form, but can be inferred from conduct which shows that such a contract was intended although never expressed 1. What is required is an examination of all the relevant evidence, including what was said and done between the parties, to determine whether a contract of service may be implied. This can be deduced from the conduct of the parties and the work done 2.

20 The claimant was previously employed by DIWI Engineering GmbH (hereafter referred to as “DIWI Germany”) as a resident engineer, by virtue of an employment letter from DIWI Germany dated 10 ^th June 2013.

21 The claimant argues that it was an accepted fact that the defendant was a continuance from DIWI Germany, and that from incorporation of the defendant until his termination, he served as company manager and managing director of the defendant. The claimant admits however that up to the date of his termination,

no letters were issued to any employees formalising their transfer of employment, or indicating the terms and conditions

22 The claimant makes reference to letter dated 29 ^th December 2017 from the defendant to the claimant which indicates that the defendant did not terminate the claimant's employment. The claimant further relies on letters dated 15 ^th April 2018 and 18 ^th May 2018 from the then attorneys of the defendant to the claimant's attorneys. In letter dated 18 ^th May 2018, the then attorneys of the defendant state the following:

“…one ought to consider that between the...