Henricus Dries Claimant v Barbuda Express Ltd Defendant [ECSC]
| Jurisdiction | Antigua and Barbuda |
| Judge | Blenman J |
| Judgment Date | 20 November 2008 |
| Judgment citation (vLex) | [2008] ECSC J1120-6 |
| Date | 20 November 2008 |
| Court | High Court (Antigua) |
| Docket Number | CLAIM NO. ANUHCV2006/0429 |
IN THE HIGH COURT OF JUSTICE
CLAIM NO. ANUHCV2006/0429
This is a claim by Mr. Henricus Dries against Barbuda Express Ltd. (the company) for outstanding fees. There is also a counterclaim by the company against Mr. Dries for breach of fiduciary duties, together with a request for the accounts of moneys received.
Background
Mr. Henricus Dries was a shareholder and director of the company which owned a ferry service, the Barbuda Express, and Mr. Dries was employed as captain. On the 19th of September 2004, at a meeting of the directors of the company, Mr. Urlwin, Mr. P. van Beek and Mr. Dries, in an agreement which was reduced into writing and signed by all parties, it was agreed that,"the daily operations rate for working directors will beUS $200.00 per day, half to be paid in cash, and half to be retained in a Director's account". Mr. Dries during the period of October 2004 and June 2005 caused the sum of US $22,700.00 to be paid to him. He says that a similar sum was to have been placed in the Director's Account to be retained for his benefit and held in trust for him. Sometime in or about July 2005, as a result of his ill health and in view of the prospect of an extended absence from Antigua, he transferred his shares in the company and subsequently ceased to function as a director. He also ceased to be employed by the company.
Mr. Dries says that based on the agreement, his salary was US $200.00 per day and therefore the company owes him US $22,700.00. He has made several requests that the salaries retained for his benefit and held in trust for him in the directors account, be paid to him, but the company has in clear breach of its contractual and fiduciary obligations failed, neglected and/or refused to pay him the outstanding amount of US $22,700.00, thereby causing him to suffer loss and damage. Accordingly, he has filed this claim for the loss and damage, which he alleges he has suffered.
The company disputes that it owes Mr. Dries any money. The company maintains that Mr. Dries' salary was US $100.00 per day.
Further, the company contends that in addition to the express terms of the agreement, there were certain implied terms namely:
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(a) The US $100.00 to be paid in cash was remuneration for work done by the directors in operating the Barbuda Express; the US $100.00 to be allocated to the director's account was a bonus a director would be entitled to claim in the event that the company was profitable and endowed with funds so that the bonus payments could be made;
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(b) The amount to be paid to the working directors was part of an incentive plan designed to encourage the directors to work assiduously and efficiently in the best interest of the company so as to maximize the possibility that the company would realise a profit;
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(c) The amount that would be allocated to the director's account could only be claimed by a director if the company was profitable in the fiscal year, as would be evident upon presentation of the company's accounts;
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(d) The initial cash payment of US $100.00 per day was a payment for operating the Barbuda Express and that was within the financial capacity of the company; an amount of US $200.00 per day was not within the financial capacity of the company; the amount of US $100.00 to be allocated to the director's account was not an amount representing payments that were accumulating in arrears but were amounts that could be claimed by the directors and whose payment would be contingent on the profitability of the company.
By way of counterclaim, the company says that Mr. Dries owed it fiduciary duty and he was a trustee of the company's assets and property as were in his possession or control. Mr. Dries has breached this duty to the company since the period 1st October to 31st December 2004 constitutes 92 days and the Barbuda Express did not operate on all 92 days. Accordingly, it was not possible for Mr. Dries to operate the Barbuda Express for 92 days during that period. The company further alleges that during the period 1st October 2004 to 30th June 2005, Mr. Dries caused the sum of US $22,700.00 to be paid to himself purportedly pursuant to the agreement that he would be paid US $100/diem for operating the Barbuda Express. The sum of US $22,700.00 accumulating at a rate of US $100/diem represents payments for 227 days. He could not have worked 92 days from 1st October to 31st December 2004 and since he only worked during the period from 1st January to 30th June 2005 means that he could not have worked operating the Barbuda Express for 227 days during the period from 1st October 2004 to 30th June 2005.
Accordingly, the company counterclaims for an account of all moneys which came into the hands of Mr. Dries as an employee/director. The company also seeks an order for the payment by Mr. Dries to the company of any sum found due from him to the company upon taking such account, together withinterest thereon at the commercial rate of 10% per annum from the date the sum ordered to be paid became due until payment or judgment or interest thereon as provided for by section 27 of the Eastern Caribbean Supreme Court Act.
Issues
The issues that arise for the Court's determination are as follows:
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(1) Whether the company is indebted to Mr. Dries;
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(2) Whether Mr. Dries is liable to account to Barbuda Express for moneys collected.
Evidence
Mr. Dries and Mr. David Milliken Smith filed witness statements on behalf of the claimant. On behalf of the company, Mr. Gregory Urlwin filed a witness statement. They were all cross examined.
Dr. David Dorsett's submissions
Learned Counsel Dr. Dorsett stated that in light of the circumstances in which the agreement was arrived at and the language of the agreement, the contract was that the daily operators' rate was available to a director, if the director was operating the Barbuda Express for a day. Dr. Dorsett said that the agreement that half of the "daily operators rate for working directors" be retained in a directors' account was intended to work as an incentive to encourage the directors to work assiduously and efficiently in the best interests of the company so as to maximize the possibility that the company would realise a profit, and accordingly the amount to be retained in the directors' account and paid to working directors would be contingent upon the financial capacity of the company and the profitability of the company.
Dr. Dorsett asked the Court to construe the agreement in the following terms:
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(1) The rate for a director operating the Barbuda Express vessel is US $200 per day.
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(2) The mechanism through which payment is to be paid is for half to be in cash and the other half to be retained in the directors' account.
Next, Learned Counsel Dr. Dorsett said that Mr. Dries did not operate the vessel for 227 days, in that the company records indicate that in 2005 he only worked for 96 days operating the Barbuda Express (indeed he admits that he only captained the Barbuda Express for 96 days in 2005). Even though, Mr. Dries contends that he did 83 days of company related work in 2004. Dr. Dorsett said that Mr. Dries is entitled to compensation for the days he operated the Barbuda Express vessel which would be the sum of 96 days that are agreed with respect to 2005 plus the sum for the relevant days for 2004, which at its most generous would be 83 days, which sum does not add up to 227 days.
Dr. Dorsett turned his attention to the interpretation of the agreement. He said the object of all construction of the terms of a written agreement is to discover the intention of the parties to the agreement. Parties cannot be held to agree to matters which they did not intend. Suffice it to say, "An aggrieved party hardly pursues litigation merely to engage the Court in a discovery of the intention of the parties". What is desired is for the Court to give effect to a certain intention and to enforce a certain outcome in favour of the aggrieved party. The intention of the parties is of course not independent of the aim, or object, or commercial purpose of the agreement. Hence, there is the need for consideration of the matrix of relevant facts in construing the terms of an agreement. He referred the Court to Lord Bingham of Cornhill inBank of Credit and Commerce International S.A. (in liq.) v Ali (No.1) [2001] UKHL 8; [2001 2 WLR 735:
"In construing any contractual provision, the object of the Court is to give effect to what the contracting parties intended. To ascertain the intention of the parties the Court reads the terms of the contract as a whole, giving the words used their natural and ordinary meaning in the context of the agreement, the parties' relationship and all the relevant facts surrounding the transaction so far as known to the parties. To ascertain the parties' intentions the Court does not of course inquire into the parties' subjective states of mind but makes an objective judgment based on the materials already identified".
InReardon Smith Line Ltd v Hansen-Tangen [1976] 3 All ER 570 p 574 c-h Lord Wilberforce stated:
"No contracts are made in a vacuum: there is always a setting in which they have to be placed. The nature of what is legitimate to have regard to is usually described as "the surrounding circumstances" but this phrase is imprecise: it can be illustrated but hardly defined. In a commercial contract it is certainly right that the Court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, and market in which the parties are operating. When one speaks of intention of the parties to the contract, one is speaking objectively; the parties cannot themselves give direct evidence of what...
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