Kreg Martin Claimant v Steve Bonner Defendant [ECSC]

• Jurisdiction: Grenada
• Judge: CUMBERBATCH, J.
• Judgment Date: 09 April 2009
• Judgment citation (vLex): [2009] ECSC J0409-1
• Court: Supreme Court (Grenada)
• Docket Number: CLAIM NO. GDAHAM2008/0001
• Date: 09 April 2009

[2009] ECSC J0409-1

IN THE SUPREME COURT OF GRENADA

AND THE WEST INDIES ASSOCIATED STATES

HIGH COURT OF JUSTICE

(CIVIL)

CLAIM NO. GDAHAM2008/0001

In the Matter of an Intended Action the Vessel "Caribbean Soul"

Between:

Kreg Martin

Claimant

and

Steve Bonner

Defendant

Appearances:

Mr. James Bristol for Claimant

Mrs. Avril Trotman-joseph for Defendant

CUMBERBATCH, J.

1 The Defendant is the owner of the vessel 'Caribbean Soul' ('the ship'). The Claimant and the Defendant on or around the 12 ^th June 2007 entered into a loan agreement ('the agreement') whereby the Claimant loaned to the Defendant the sum of US$750,000.00, the terms and conditions whereof are set out in a promissory note of even date. The said promissory note is secured by a preferred marine mortgage ('the mortgage') dated the 17 ^th July 2007.

2 Article V of the said mortgage provides that it shall be displayed on the ship. Paragraph 6(d)(5) of the agreement provides that the Defendant shall acquire and maintain a GPS tracking device that automatically reports the position of the ship daily to an intended accessible server.

3 The Defendant also agreed to communicate to the Claimant the general geographic position and the intended itinerary of the ship at least 15 days in advance of its movement.

4 Article VII of the mortgage is of significance to this action. That article provides:

"The Defendant's failure to comply with all the terms and conditions of the Mortgage and/or the Agreement shall be an event of default and that should the said default continue for 7 days after written notice by the Claimant to the Defendant, the principal sum together with interest shall be immediately due and payable and that the Claimant may take possession of the ship if such sums are not paid forthwith and that the Claimant may without notice increase the interest rate to 8% per annum until paid."

5 The Claimant alleges that the Defendant is in breach of Article V of the mortgage and paragraph 6(d) (5) of the agreement. The Claimant by a letter dated 24 ^th April 2008 notified the Defendant of the alleged breach of paragraph 6(d) (5) of the agreement. By a letter dated the 6 ^th May 2008 the Claimant notified the Defendant of the alleged breach of article V of the mortgage.

6 The Claimant asserts that despite receipt of the letters aforesaid the Defendant has failed to remedy the alleged breaches set out therein and as a result the provisions of Article VII have been invoked. On the 26 ^th May 2008 the Claimant filed a claim form claiming the following relief:

"Amount claimed	US$750,000.00 (@2.7169	EC$2,036,675.00
Court Fees		EC$ 2,500.00
Legal Practitioner's costs on issue		EC$ 25.00
Together with interest thereon up to 25 th April 2008	US$ 25,983.61	EC$ 70,594.87
(Daily rate thereafter = EC$446.39 per day)
Total Claim		EC$2,109,794.80"

7 On the 24 ^th May 2008 the Court heard an ex parte application filed by the Claimant and granted the following orders:

• "1, The Defendant must not remove from Grenada or Prickly Bay, Grenada or in any way dispose of or deal with or diminish the value of his asset namely the Vessel "CARIBBEAN SOUL".

• 2. The Defendant may cause this Order to cease to have effect if the Defendant provides security by paying the sum of US$794,191.00 into Court or makes provision for security in that sum by another method agreed with the Claimant's Legal representatives.

• 3. The said vessel shall be removed to the Grenada Coast Guard base at True Blue in the parish of St. George until further order by the Court.

• 4. The Return Date for the further hearing of this matter shall be the 30 ^th day of May 2008."

8 The orders granted on the 24 ^th May 2008 were varied in the following terms:

"IT IS ORDERED THAT: -

1. The Injunction granted herein on the 24 ^th May 2008 be varied as follows:

(i) The Ship "Caribbean Soul" be removed under the supervision of Grenada Coast Guard to the facilities of the Grenada Marine at St. David's Harbour and hauled out there for safekeeping until further order."

9 On the 26 ^th May 2008 the Registrar of the Supreme Court of Grenada issued a warrant for the arrest of the ship. A caveat of even date was also entered.

10 The Defendant on the 5 ^th June 2008 filed an application seeking the following relief:

• "1. The Claimant deposits into the High Court Registry a minimum sum of One Million Eight Hundred Thousand Dollars Eastern Caribbean Currency and the same be held by the Registrar to settle any judgment and costs found against the Claimant.

• 2. The dismissal and/or variation of the Order made on the 24 ^lh day of May 2008 and varied on the 26 ^lh day of May 2008 by the Honourable Justice Francis Cumberbatch.

• 3. The Warrant of Arrest and Caveat entered on the 26 ^th day of May 2008 be discharged."

11 This application was superseded by an application of the 19 ^th June 2008 accompanied by an affidavit of even date. An additional affidavit was also filed by the Defendant on the 8 ^th August 2008. I will refer to these two affidavits later in this judgment.

12 At the hearing of the applications by the Defendant two issues emerged for the Court's determination. These are whether the injunction granted herein should be discharged and as a consequence the warrant of arrest and caveat be discharged; and secondly, whether Grenada is the forum conveniens for the hearing of these proceedings,

13 It is common ground that the injunction has been superseded by the issue of a warrant of arrest of the ship. Notwithstanding this, however, the Defendant sought the discharge of the injunction on the following grounds:

1

Non compliance with the Civil Procedure Rules 2000 ('the CPR'); 2. Material non disclosure; 3. The failure of the Claimant to properly notify the Defendant of the proceedings.

14 Counsel for the Defendant submitted that the Order of the 24 ^th May 2008 did not contain the undertaking for damages as is required under part 17.2(2) of the CPR, nor does it contain the notice required under Part 11.16(3) of the CPR. Counsel further submitted that no reasons were advanced by the Claimant in his application for an interim ex parte injunction as to why notice thereof was not given as is required in Part 17.3(3) of the CPR.

15 An examination of the relevant documents reveals that the Order of the 24 ^th May 2008 does contain both the undertaking as to damages and the notice required under Part 11.16(3) of the CPR. The Court was satisfied that in all the circumstances the need for speed and urgency in the pursuit of this application was good reason for not giving notice. The Court finds that the first ground for the discharge of the injunction fails.

16 On the ground of non disclosure Counsel submits that the Claimant knew of the general whereabouts of the ship as a result of information conveyed by the Defendant's attorney in California to the Claimant's attorney, also in California. Counsel contended that the Claimant knew that the ship was headed to Brazil and that there were on going communications between the parties' California attorneys on general matters. Hence, there was no real risk of the dissipation of the asset. It was further submitted that the Court was not informed of litigation in the State of California commenced by the Defendant against the Claimant.

17 It was further submitted to the Court that the evidence does not disclose that the Claimant was acting in good faith in the making of his application and that in all the circumstances it would be inequitable to allow the injunction to remain in force as the Defendant would continue to suffer loss of earnings before the hearing and determination of the substantive matter.

18 The Claimant's Counsel contends that the Defendant by his own admission in paragraph 5 of his affidavit of the 19 ^th June 2008 and in his affidavit of 5 ^th June 2008 concedes that the GPS system was not yet in operation. She further contends that the raison d'etre for obtaining the injunction was to keep the ship within the jurisdiction of Grenada to facilitate the institution of Admiralty proceedings in rem.

19 Counsel denies that the Claimant was at the time of the institution of these proceedings aware that the Defendant had commenced proceedings against him in California as it was not until the 1 ^st June 2008 that same was served on him.

20 In her closing submission on this issue Counsel for the Claimant stated that her client had no knowledge of the matters which he allegedly failed to disclose and in any event those matters were neither material nor relevant to the injunctive order.

21 It is trite law that in all cases for injunctive relief there is the obligation on the part of the Applicant to have clean hands. Indeed, the more draconian the relief sought, the greater is the obligation to have clean hands. Lord Donaldson summed up the position in Bank Mellat v Nikpour (Mohammad Ebrahim) [1985] Com. LR. 158 at 159;

"It was so well enshrined in the law that no injunction obtained ex parte should stand if it had been obtained in circumstances in which there had been a breach of duty to make the fullest and frankest disclosure that it was difficult to find authority for the proposition; it was trite law. Happily the court had been referred to the dictum of Warrington LJ. in R. v. Kensington Income Tax Commissioners, ex p. Princess Edmond de Polignac at 509, where it was said that if a person did not make the fullest possible disclosure he would be deprived of any advantage he might have already obtained by means of the order."

22 In the same case Donaldson L.J. categorised the Mareva and Anton Filler injunctions as the law's two 'nuclear' weapons. In Columbia Picture Industries Inc v Robinson [1987] Ch. 38 Scott J. said that the affidavit evidence in support of an application for an Anton Piller order...