republic of trinidad and tobago in the court of...

of 23

REPUBLIC OF TRINIDAD AND TOBAGO

IN THE COURT OF APPEAL

Civ. App. No. 105 of 2013

H.C.A No. 04064 of 2008

BETWEEN

MOHAN JAIKARAN Appellant

AND

TSIDKENU INVESTMENT CORPORATION

NEIL SEEPERSAD

WIN TV LIMITED Respondent

PANEL: P. Weekes, J.A.

R. Narine, J.A.

P. Moosai, J.A.

APPEARANCES:

Mr. R. Lawrence-Maharaj, SC. instructed by Mr. M Rooplal on behalf of the Appellant

Mr. J Camacho instructed by Mr. R Katwaroo on behalf of the First and Second Respondents

DATE DELIVERED: Monday 6th

July, 2015

I have read in draft the judgment of Moosai J.A. I agree with it and do not wish to add anything.

I agree.

P.Weekes

Justice of Appeal

I too agree.

I agree.

R. Narine

Justice of Appeal

of 23

JUDGMENT

Delivered by P. Moosai J.A.

I. Introduction.

1. The appellant has not challenged the judge’s finding on the substantive issue of

oppression. Rather his focus is on the remedy granted. Accordingly, the main issue

arising for determination in this appeal is whether the trial judge, Madam Justice Charles,

in the exercise of her judicial discretion in granting relief under the oppression remedy

provision (section 242) of the Companies Act, Chap. 81:01 (“Companies Act”) for

corporate conduct that is oppressive, or unfairly prejudicial to, or in unfair disregard of,

the interests of the first and second respondents as complainants, can be shown to have

been plainly wrong.

II. Summary of my Conclusion.

2. Having considered the respective submissions of the parties, I have concluded that

the appellant has established that the judge, in the exercise of her undoubted judicial

discretion in granting relief for the oppressive conduct complained of, was plainly wrong

in making the orders that she did. In my view, the failure of the judge to properly

evaluate the evidence and determine what was the actual investment made by TIC caused

her to err in law and provide relief which was grossly disproportionate.

III. Relevant background.

3. The first defendant/appellant, Mohan Jaikaran (“Jaikaran”), was at all material

times the Chairman and/or de facto controlling director and majority shareholder (to the

extent of roughly 73%) of the second defendant/respondent, WIN TV Limited (WIN

of 23

TV”): see judgment at first instance1. Hereafter I will refer to them collectively as “the

defendants”. WIN TV at present carries on the business of a television broadcasting

station pursuant to a concession and broadcasting station licence granted for that purpose

by the Telecommunications Authority of Trinidad and Tobago (“TATT”) on 1 March,

2006 and issued in the personal name of Jaikaran.

4. The second claimant/respondent, Neil Seepersad (“Seepersad”), is a director of

and has the majority shareholding in Tsidkenu Investment Corporation (“TIC”), the first

claimant/respondent. Hereafter I will refer to them collectively as “the claimants”.

Seepersad was encouraged to substantially invest in WIN TV and did so through his

company, TIC. Accordingly, WIN TV on 24 July, 2006 issued a share certificate to TIC

in the amount of 15,000 paid-up shares valued at $6 million. Additionally, Seepersad was

appointed a director of WIN TV with effect from 1 May, 2007. The parties dispute

whether the entire sum of $6 million has been paid for the shares.

5. By their claim form and statement of case filed on 24 November, 2008 the

claimants, pursuant to section 242 of the Companies Act, commenced proceedings

against the defendants for oppression. They alleged that the business or affairs of WIN

TV had been, and were being carried on or conducted by Jaikaran, as the Chairman

and/or de facto controlling director and majority holder, in a manner that was oppressive,

and/or unfairly prejudicial to, and/or in unfair disregard of the interests of TIC as a

shareholder and Seepersad as a director of WIN TV. As a consequence they sought

certain orders of the court to rectify the matters complained of.

6. On 30 January, 2013 judgment on the substantive issue of oppression was given

in favour of the claimants against the defendants. However, the judge reserved her

decision on what would have been the appropriate oppression remedy to rectify the

matters complained of, pending written submissions by the parties.

1 Tsidkenu Investment Corporation et al v Jaikaran CV2008-04604 [1].

of 23

7. Consequently, on 30 March, 2013 the judge, in the undoubted exercise of her

wide remedial discretion under section 242 of the Companies Act , ordered as follows:

i. Jaikaran do purchase the shares held by Seepersad in WIN TV at a fair market

value in accordance with section 242 (3) (g) of the Act.

ii. Jaikaran do take all necessary steps to effectively transfer the broadcasting licence

granted in his name by TATT dated 1 March, 2006 to WIN TV.

iii. Jaikaran to pay to the claimants the sum of:

a) US $30,000 for the purchase of 25 plasma television screens; and

b) TT $9,252,849.27 expended by the claimants on behalf of WIN TV.

8. The appellant has not challenged the judge’s finding on the substantive issue of

oppression. Rather, the focus is on the relief granted for the impugned conduct. In that

regard, he relies on two principal grounds of appeal, namely:

[1] The judge erred in law and in fact by ordering that Jaikaran pay compensation to

the claimants in the sums of US $30,000 and TT 9,252, 849.27 the particulars

being:

a. the judge ordered that Jaikaran pay to the claimants the said sums,

without satisfying herself that the sums had been expended by them;

b. the judge made the said order in spite of the claimants providing no

evidence that they had actually expended the said sums;

c. the judge made the said order, although the claimants provided no

evidence that the said sums had actually been expended on behalf of

WIN TV;

d. in awarding the said sum of TT $9,252,849.27 the judge failed to take

into account that this sum consisted of interest at the rate of 15%

charged by the claimants on all sums which they had purportedly

expended on behalf of WIN TV; and

e. the judge erred in finding that the circumstances of the instant case

warranted the award of a compensation order.

of 23

[2] The judge erred in law by ordering that Jaikaran take all necessary steps to

effectively transfer the broadcasting licence granted in his name by TATT to WIN

TV, the particulars being:

a. all matters in respect of broadcast licences/concessions are governed

by TATT in accordance with the Telecommunications Act, Chapter

47: 31;

b. the Telecommunications Act provides that the transfer of a

broadcasting licence is within the sole discretion of TATT;

c. TATT was not a party to the instant proceedings.

9. On the other hand, the claimants contend that the trial judge’s exercise of her

discretion cannot be shown to be plainly wrong. This is because:

[1] The judge has a wide and liberal discretion in making an order for compensation

pursuant to section 242 (3) (j) of the Companies Act. As a consequence the Court

of Appeal has a limited power of review.

[2] (a) The judge’s decision that Jaikaran take all necessary steps to effectively

transfer the broadcasting licence granted in his name by TATT to WIN TV, on the

ground that it was really the asset of WIN TV and not that of Jaikaran personally,

was correct and in accordance with the principle stated in CI Covington Fund

Incorporation v White.2

(b) The judge’s decision did not infringe the provisions of the

Telecommunications Act, and it was not necessary to join TATT as a party to the

claim because the order made was in respect of Jaikaran and not TATT. The order

was not one compelling TATT to give permission to transfer the licence. Rather,

the order directed Jaikaran to take all necessary steps to have the licence

transferred which could, in the course of things, be done with the permission of

TATT under section 22 (1) (c) and (d) of the Act.

10. It is acknowledged that the court at first instance has a broad discretion in

granting relief for oppression and that the appellate court has a limited power of review.

2 (2000) CanLII 22676 (Ontario SC).

of 23

In AG v Regis3 our local Court of Appeal propounded the principle governing appellate

review of a lower court’s exercise of discretion:

“The law as to the reversal by a Court of Appeal in Trinidad and Tobago of an

order made by a trial judge in the exercise of his discretion is well-established.

The appellate court will generally only interfere if it can be shown that the trial

judge was plainly wrong. Thus, we may say that unless it can be demonstrated,

for example, that the trial judge disregarded or ignored or failed to take

sufficient account of relevant considerations or regarded and took into account

irrelevant considerations or that the decision is so unreasonable or against the

weight of the evidence or cannot be supported having regard to the evidence or

that the judge omitted to apply or misapplied some relevant legal principle or

that the decision is otherwise fundamentally wrong, the Court of Appeal will not

generally interfere with the exercise of a court’s discretion.”

11. The principal question therefore is whether the appellant can establish that the

judge, in the exercise of her judicial discretion in granting relief to rectify the oppression

complained of, was plainly wrong. An answer to this question would entail an

examination of the law on oppression.

IV. The Law on Oppression.

12. The oppression remedy provision is embodied in section 242 of the Companies

Act which, under the rubric “Restraining Oppression”, provides:

“(1) A complainant may apply to the Court for an order under this section.

(2) If, upon an application under subsection (1), the Court is satisfied that in

respect of a company or any of its affiliates –

(a) any act or omission of the company or any of its affiliates effects a

result;

(b) the business or affairs of the company or any of its affiliates are or

have been carried on or conducted in a manner; or

(c) the powers of the directors of the company or any of its affiliates are or

have been exercised in a manner that is oppressive or unfairly

3 CA 79/2011 [11].

of 23

prejudicial to, or that unfairly disregards the interests of, any

shareholder or debenture holder, creditor, director or officer of the

company, the Court may make an order to rectify the matters

complained of.

(3) In connection with an application under this section, the Court may make any

interim or final order it thinks fit, including –

(a) an order restraining the conduct complained of;

(b) an order appointing a receiver or receiver-manager;

(c) an order to regulate a company’s affairs by amending its articles or

Bye-laws, or creating or amending a unanimous shareholder

agreement;

(d) an order directing an issue or exchange of shares or debentures;

(e) an order appointing directors in place of, or in addition to, all or any of

the directors then in office;

(f) an order directing a company, subject to subsection (6), or any other

person to purchase shares or debentures of a holder thereof;

(g) an order directing a company, subject to subsection (6), or any other

person, to pay to a shareholder or debenture holder any part of the

moneys paid by him for his shares or debentures;

(h) an order varying or setting aside a transaction or contract to which a

company is a party, and compensating the company or any other party

to the transaction or contract;

(i) an order requiring a company, within a time specified by the Court, to

produce to the Court or an interested person financial statements in the

form required by section 151 or an accounting in such other form as

the Court may determine;

(j) an order compensating an aggrieved person;

(k) an order directing rectification of the registers or other records of a

company under section 245;

(l) an order winding up and dissolving the company;

(m) an order directing an investigation under Division 2 of Part V11 to be

made; or

(n) an order requiring the trial of any issue.”

13. The parties do not dispute that both the claimants are complainants within the

meaning of section 239.

of 23

14. Prior to the introduction of statutory reforms, the rights of minority shareholders

as against those controlling a corporation were very limited. What was required to

address this disparity were statutory reforms aimed at balancing the interests of all

persons having interests in a corporation. In enacting section 242 of our Act, our

legislators have given the courts a very broad discretion, applying general standards of

fairness, to decide cases coming before them on their merits4. Andrew Burgess,

Commonwealth Caribbean Company Law5 makes the following observation on our

oppression remedy provision and similar provisions contained in the legislation of other

Caribbean countries:

“These provisions are not a codification of the common law; rather, they are intended

to confer upon individual shareholders and other complainants a remedy which

removes the impediments of the rule in Foss v Harbottle [which held that only the

company itself could sue its directors for a breach of their duty to it] and ensures that

they are insulated from conduct that is oppressive or unfairly prejudicial or that

unfairly disregards their interests.”

15. Section 242 of the Companies Act is modelled on section 241 of the Canadian

Business Corporations Act (“CBCA”) 1985 (formerly section 234). The section 234

(CBCA) remedy has been described as the broadest, most comprehensive and most open-

ended shareholder remedy in the common-law world. It gives the Court a wide discretion

to remedy virtually any corporate conduct that is unfair.6 As remedial legislation drafted

in such broad terms, McDonald J in First Edmonton opined that section 234 should be

given a liberal interpretation:

“The introduction of a statutory remedy against oppression is a deliberate departure

from the policy of judicial non-intervention in corporate affairs. Section 234 [CBCA]

“casts the Court in the role of an ‘active arbiter of business policy’”…. It is drawn in

4 First Edmonton Place Ltd v 315888 Alberta Ltd [1988] 40 BLR 28 [10]-[18] (McDonald J).

5 Andrew Burgess, Commonwealth Caribbean Company Law (Commonwealth Caribbean Law Series, Routledge,

Oxon 2013) 330. 6 Edmonton (n 4) [19].

of 23

very broad terms and as remedial legislation should be given a liberal interpretation in

favour of the complainant…”7

16. Section 242 empowers the court to provide redress to corporate stakeholders for

corporate conduct that has been exercised in a manner that is oppressive, or unfairly

prejudicial to, or that unfairly disregards their interests. Mark Koehnen, Oppression

and Related Remedies8 under the rubric “General Principles relating to Remedies”,

highlights the width of the discretion and the purposive approach to be adopted by the

courts, but cautions against unwarranted judicial interference in the boardroom:

“Section 241 of the CBCA and its provincial counterparts gives courts wide-

ranging discretion to fashion remedies. In addition to the 14 specifically

enumerated remedies, S.241 empowers the court to make any other order it sees

fit. The choice of remedy is governed by the same broad, purposive approach

that applies to the oppression remedy as a whole. Courts will be flexible and

creative when fashioning remedies to suit individual cases. The breadth of

remedial discretion recognizes that monetary compensation for oppression is

usually inadequate…Both the overriding purpose of ending oppression and the

enumerated remedies can be seen as encouraging judicial interference in

corporate affairs. The potentially intrusive nature of the remedy has been

tempered by the principles of minimal interference and reasonable expectations.

As their names suggest, these principles hold that courts should interfere as little

as possible in corporate affairs and that the remedy ought to reflect the

reasonable expectations of the parties.”

17. In BCE Inc. v 1976 Debentureholders9 the Supreme Court of Canada extensively

reviewed the law on oppression. The Court considered that the best approach to the

interpretation of s. 241(2) is one that combines the two approaches developed in the

cases:

7 ibid [28].

8 Markus Koehnen, Oppression and Related Remedies (Carswell, Canada 2004) 326-327.

9 [2008] 3 SCR 560.

of 23

“One should look first to the principles underlying the oppression remedy, and in

particular the concept of reasonable expectations. If a breach of a reasonable

expectation is established, one must go on to consider whether the conduct

complained of amounts to "oppression", "unfair prejudice" or "unfair disregard"

as set out in s. 241(2) of the CBCA.”10

18. The Court made two preliminary observations that featured throughout all the

jurisprudence. Firstly, oppression is an equitable remedy. It seeks to ensure fairness –

what is “just and equitable”. It gives a court a broad, equitable jurisdiction to enforce not

just what is legal, but what is fair. Thus, courts considering claims for oppression should

look at business realities, not merely narrow legalities. Secondly, like many equitable

remedies, oppression is fact-specific. What is just and equitable is judged by the

reasonable expectations of the stakeholders in the context and in regard to the

relationships at play. Conduct that may be oppressive in one situation may not be in

another11

.

19. The reasonable expectations of these stakeholders were considered to be the

cornerstone of the oppression remedy. The test is objective. The Court considered:

“As denoted by “reasonable”, the concept of reasonable expectations is

objective and contextual. The actual expectation of a particular stakeholder is

not conclusive. In the context of whether it would be "just and equitable" to grant

a remedy, the question is whether the expectation is reasonable having regard to

the facts of the specific case, the relationships at issue, and the entire context,

including the fact that there may be conflicting claims and expectations… Fair

treatment - the central theme running through the oppression jurisprudence - is

most fundamentally what stakeholders are entitled to "reasonably expect".”12

20. Having discussed the concept of reasonable expectations that underlies the

oppression remedy, the court considered the second prong of the s.241 oppression

remedy. Even if reasonable, not every unmet expectation gives rise to a claim under

10

Ibid [56]. 11

ibid [57]-[59]. 12

ibid [62], [64].

of 23

s.241. The section requires that the conduct complained of amount to "oppression",

"unfair prejudice" or "unfair disregard" of relevant interests.

21. In summary, the test developed by the court was as follows:

“(1) Does the evidence support the reasonable expectation asserted by the

claimant? and (2) Does the evidence establish that the reasonable expectation

was violated by conduct falling within the terms "oppression", "unfair prejudice"

or "unfair disregard" of a relevant interest?”13

V. Analysis.

22. Against the foregoing backdrop, it is now possible to address the matters in

dispute. At the heart of the dispute appears to be the amount of monies expended by the

claimants. This is a matter that was directly put in issue on the pleadings. This issue can

be separated into the two awards made by the judge:

i. TT$9,252,849.27 expended by the claimants on behalf of WIN TV; and

ii. US$30,000 for the purchase of 25 plasma television screens.

TT$9,252,849.27 expended by the claimants on behalf of WIN TV

23. In the statement of case the claimants contend that they have paid $6 million for

the purchase of 15,000 shares in WIN TV, for which TIC was issued a share certificate14

.

The parties all treat this as a US $1 million investment, although if the actual exchange

rate was used, the figure would be higher. The only other claim therein was for an

unquantified sum in respect of a loan to WIN TV from TIC (through Primis Corporation

Ltd, a company in which Seepersad was the principal shareholder and controlling

director) to defray expenses for the period March to August 2007: para 21 statement of

case.

13

ibid [95]. 14

[5] & [35] of statement of case.

of 23

24. In their defence the defendants, while admitting to the issuance of a Share

Certificate to TIC in the amount of 15,000 paid up shares valued at $6 million, have

claimed that to date they have only received $5,810,386.80 of that sum15

. To their

Defence they have annexed a breakdown of payments made by Primis Corporation for or

on behalf of WIN TV totalling $5,810,386.80: see Appendix 10. They averred that the

payments referred to by the claimants in para 21 of the statement of case were not loans,

but disbursements for the 15% share purchase in WIN TV. They go on to state that

Seepersad made a separate claim of Jaikaran for payment of the sum of $9,252,849.27 at

a rate of interest of 15% by the provision of a statement of payments16

: see Appendix 19.

Also annexed to the Defence was a letter from TIC, dated 13 August, 2008 signed by

Seepersad as Managing Director, which, on the face of it, suggested the extent of their

total investment in WIN TV:

“My records show that between the periods 11th January, 2006 to 28

th August,

2007 I have made substantial loans and advances to WIN TV both in the form of

cash payments and purchase of goods and services, a summary of which is

attached.

The amounts totalled $9,252,849.27.

This is separate and apart from the payment of fifteen thousand ($15,000.00)

dollars for fifteen thousand shares in [WIN TV] the certificate for which is held

in the name of [TIC]…”

25. It is manifest that the statement of case did not mount a claim for $6 million, plus

an additional sum of $9,252,849.27. The claimants, in their reply, deny that there was any

balance outstanding for the 15% shareholding and maintain that it was paid in full.

26. It is clear therefore that on the pleadings the amount actually invested by the

claimants in WIN TV was in issue. The claimants contend that $6 million was spent on

the purchase of the 15,000 shares plus an unquantified sum in respect of a loan to WIN

TV for WIN TV to defray expenses for the period March to August 2007. However,

15

[5] & [10] of defence. 16

ibid [31].

of 23

Jaikaran’s contention is that the total investment by the claimants was TT$5,810,386.80.

Further, the defendants have annexed a letter of 15 August, 2008 from the claimants

which makes no mention of a separate sum of $6 million, and which, had it gone into

evidence at trial, could arguably have been treated as an admission by the claimants that

the total sums expended were TT$9,252,849.27 between 11 January, 2006 to 28 August,

2007, and TT$15,000 for 15,000 shares in WIN TV. As outlined earlier, in assessing a

claim of oppression, the court must determine whether the evidence supports the

reasonable expectation asserted by the complainants. In this case, their reasonable

expectation would naturally be influenced by their actual investment. The issue of the

amount expended having been raised on the pleadings, it was incumbent on the claimants

to prove at trial by cogent and compelling evidence, save for the TT$5,810,386.80

expressly admitted by the defendants, any further sums actually expended.17

27. At trial, the only evidence led was from the complainants’ witness, Seepersad,

whose witness statement was filed on 23 October, 2009. There was no cross-examination.

In so far as seeking to prove the sums actually expended in WIN TV, Seepersad’s witness

statement attested, inter alia, that:

i. TIC invested US$1 million in exchange for 15% shareholding in WIN TV and

was issued a share certificate dated 24 April, 2006: para 4. No documentary

evidence was forthcoming from the claimants to account for this payment, nor

was there any clear indication that the $6 million sum was separate and apart from

the further sums alleged to have been expended by the claimants.

ii. Seepersad provided Jaikaran with a breakdown of payments made on behalf of

WIN TV in the sum of $9,252,849.27 which was annexed and marked “NS 7”.

This was the same document referred to in the defence, the quantum of which was

put in issue by the the defendants. It is to be noted that “NS 7” is a document, the

source of which was not proved, which sets out the date the payments were

allegedly made, to whom the payments were allegedly made, and the amount in

TT and US dollars. These total TT $7,128,241.42 or US $1,124,328.30. On this

17

Halsbury’s Laws of England (2014) vol 29, para 628.

of 23

total sum the sum of 15% interest is added to arrive at the final figure of TT

$9,252,849.27. However, the said document is not part of the official records of

any company, nor is a single receipt or returned cheque annexed in support

thereof. A closer examination reveals that it purports to set out twenty payments

made between the period 11 January, 2006 and 28 August, 2007 to WIN TV and

several foreign corporations which appear to be cable companies. The document

does not state by whom the payments are made. However, a comparison with the

document listed as Appendix 10 to the defence, in which the defence admits

payments totalling TT $5,810,386.80, reveals that:

(a) 16 of the 20 payments substantially accord with the payments referred to

in Appendix 10.

(b) These 16 payments were, as the defendants acknowledge, made by Primis

Corporation, Seepersad’s company, for and on behalf of WIN TV: see

Appendix 10.

With respect to the award of interest on the said sums at the rate of 15% set out in

the said document, no evidence has been adduced, such as by way of agreement

between the parties, supporting any basis for such an award.

28. This therefore was the evidence before the judge on this issue. Having held that

there was oppression, the judge focused her attention on the appropriate oppression

remedy. However, I am of the respectful view that the judge, in the exercise of her

judicial discretion in granting relief, was plainly wrong. I say so for the reasons that

follow.

29. There was a significant gap, in the region of a few million dollars, between what

the respective parties were alleging was actually expended by the claimants. In my view

the judge erred in law by failing to grapple with and resolve conflicts of evidence which

were central to the issues in the case: see Lloyds TSB Bank plc v Hayward.18

In that

regard, with respect to the sums of $6 million and $9,252,849.27, it was incumbent on the

18

[2002] EWCA Civ 1813.

of 23

judge to determine whether the claimants had satisfactorily established that one or both

sums had been paid by the claimants as they alleged. An examination of NS 7 would

have revealed that only 16 of the 20 payments accord substantially with the payments

admitted by the defendants as having been paid by the claimants on behalf of WIN TV.

To that extent the claimants had satisfactorily established that amount of $5,810,386.80.

However, neither of the claimants was able to provide any documentary evidence to

support the balance of these two sums claimed. The documentary evidence provided in

support was merely a typed document setting out how the sum of $9,252,849.27 was

arrived at: see NS 7.

30. The evidence that the court relied upon appears to be the statements made in the

witness statement of Seepersad and the statement of expenditure annexed as NS 7.

Indeed, the trial judge accepted unequivocally that the sums as set out in NS 7 were

expended on the basis that it was unchallenged evidence19

. This appears to be a failure to

properly analyse the evidence20

.

31. The defendants, while they did not challenge these figures at trial, did put the

expenditure, save for what was expressly admitted, in issue on the pleadings. And in this

appeal they contend that the other side has failed to prove that they expended the said

sum. In my view, even though the defence did not cross-examine Seepersad at trial, it did

not relieve the claimants of the obligation of proving that part of the expenditure which

the other side put in issue. This they could not do by merely producing a document, NS 7,

the source of which was questionable, with particulars amounting to millions of dollars,

and rely on it as establishing their actual expenditure. Similarly, with respect to the

purchase of the 15,000 shares for $6 million, I have already made the point that there is

no documentary evidence, not a receipt nor a returned cheque, adduced in support thereof

would which would suggest that this payment was separate and apart from the payment

referred to in NS 7.

19

Tsidkenu (n 1) [7], [18]. 20

Regis (n 3) [10]-[11].

of 23

32. McGregor on Damages21

on the burden of proof at trial emphasises a claimant

must still prove his loss even where the defendant fails to deny the allegations of damage

or suffers default:

“The claimant has the burden of proving both the fact and the amount of damage

before he can recover substantial damages. This follows from the general rule that the

burden of proving a fact is upon him who alleges it and not upon him who denies it, so

that where a given allegation forms an essential part of a person’s case, the proof of

such allegation falls on him. Even if the defendant fails to deny the allegations of

damage or suffers default, the claimant must still prove his loss.”

33. Of similar effect is the decision of our Court of Appeal in Anand Rampersad v

Willies Ice Cream Ltd.22

In respect of a claim for special damages, Archie JA (as he then

was) also emphasises the particularity with which a claimant must establish his loss:

“I wish to emphasise at the outset that the fact that a defendant may not challenge the

values of destroyed items given by the plaintiff does not automatically entitle the

plaintiff to recover whatever is claimed. The rule is that the plaintiff must prove his

loss. The correct approach is as stated by Lord Goddard C.J in Bonham Carter v Hyde

Park Hotel [1948] 64 Law Times 177:

“Plaintiffs must understand that if they bring actions for damages, it

is for them to prove their damage, it is not enough to write down the

particulars, so to speak, throw them at the head of the court saying

‘this is what I have lost, I ask you to give me these damages.’ They

have to prove it’.”

34. Implicit in the order that she made was an acceptance by the judge that the

claimants had spent not only the $9,252,849.27, but had also paid an additional US$1

million or TT$6 million for TIC’s 15,000 shares in WIN TV. However, this was never

part of the pleaded case, nor could that be gleaned from a perusal of Seepersad’s witness

statement, nor was this established at trial. To the extent that the judge took both sums

21

McGregor, The Law of Damages (The Common Law Library, 19th

ed Sweet & Maxwell, London 2014) [50-001]. 22

CA 20/2002, 8.

of 23

into account in fashioning the appropriate oppression remedy, the relief grossly exceeded

what could conceivably be the reasonable expectation of the claimants.

35. It is well settled that where a judge is plainly wrong in the exercise of his or her

discretion, the Court of Appeal is entitled to look at the matter afresh and come to its own

conclusion as to how the discretion ought to have been exercised: Romauld James v

AG23

.

36. On an analysis of all the evidence before me, it is apparent that the award of both

a buyout of the 15% shareholding and the $5,810,386.80 for the proven investment would

doubly compensate the claimants. It must be determined, therefore, which,if any, of these

awards would result in fair treatment in all the circumstances.

37. In fashioning the appropriate remedy, while the purchase of shares at fair market

value would appear to be appropriate, the principle of fair treatment and the reasonable

expectations of the parties must be considered. It is possible that a buyout of the 15%

shareholding at fair market value may meet the reasonable expectations of the parties.

However, counsel for the claimants at the hearing of the appeal indicated that it was

unclear whether the shares were currently worth anything. The fair market value of the

shares therefore appears, in the absence of evidence of its value, to be too uncertain a sum

for the order for a buyout to be an appropriate remedy in the present case and may well

be productive of injustice to the claimants.

Further, the judge went on to state that any compensation awarded should reflect the fact

that Jaikaran was in fact,in his capacity as director, the source of the oppressive conduct.

There has been no challenge to this aspect of the judge’s finding. Thus, Jaikaran in his

personal capacity should be ordered to compensate the claimants. This is supported by

the case of Raymond Budd v Gentra Inc et al24

where Doherty JA stated:

“Where a plaintiff seeks a remedy against a director or officer personally under s.241,I

do not think it is accurate to suggest that the plaintiff is attempting to “circumvent the

23

CA 154/2006 [5] (Kangaloo, JA). 24

43 BLR (2d) 27 [36&53].

of 23

principles with respect to personal liability of directors and officers.” On the contrary

the plaintiff is making a fundamentally different kind of claim than is contemplated in

cases like Peoples. The plaintiff is not alleging that he was wronged by a director or

officers acting in his or her personal capacity, but is asserting that the corporation,

through the actions of the directors or officers, has acted oppressively and that in the

circumstances it is appropriate (i.e.fit) to rectify that oppression by an order against

the directors or officers personally…………..

Oppression applications involving closely held corporations where a director or officer

has virtually total control over the corporation provide another example of a situation

in which a director or officer may be held personally liable to rectify corporate

oppression.”

38. Section 241(3)(j) allows the court to make an award of compensation to an

aggrieved person. In the case of Lunn v BCL Holdings Inc25

, a compensation order was

made in addition to a fair value buy-out. However, in that case the compensation awarded

was for contributions made by the complainant not reflected in the price of the purchase

of his shares. It is clear therefore that the buy-out order alone would not have been a

sufficient remedy in those circumstances. In contrast, in the instant case, the monies

expended by the claimants proven in the sum of $5,810,386.80 represented their total

investment in the company. And the impugned conduct occurred within a relatively short

period (within two years of the claimants coming on board). Therefore, in the exercise of

the broad and equitable jurisdiction of the court to make an award that is fair in all the

circumstances, I am of the view that the appropriate remedy would be to order

compensation in the sum of $5,810,386.80 to be paid by Jaikaran to the claimants

together with interest thereon.

39. In the prevailing economic climate, I am of the view that interest at the rate of 6%

per annum would be appropriate and just in all the circumstances. Accordingly, there

would be interest on the award of $5,810,386.80 at the rate of 6% per annum from the

date of the filing of the claim to the date of judgment of the learned trial judge.

25

[1997] 2 WWR 542 (Sask QB) (Dawson J).

of 23

US$30,000 for the purchase of 25 plasma television screens

40. On the issue of the expenditure for plasma screens, the witness statement of

Seepersad revealed that WIN TV required funding for the purchase of 25 plasma screen

television sets for the Port Authority and Airports Authority costing US $30,000. As

WIN TV had no money for their purchase, and in an effort to assist WIN TV in covering

its immediate funding needs, Seepersad undertook and indeed purchased 15 plasma

screen televisions. However, this was on the clear understanding that he would be

reimbursed for this purchase by WIN TV26

. In support of this aspect of the claim,

Seepersad annexed:

(a) A document dated 22 May, 2007 signed by the then President of WIN TV

and headed “WIN TV IMMEDIATE FUNDING NEEDS”. Under the

heading “Capital Requirements” therein is endorsed a note of “25 plasmas

for Port Authority & Airport Authority US $30,000”: see “NS 3a”;

(b) An invoice from Best Buy, USA made out to Primis Corporation Ltd for

the purchase of 15 televisions comprising of 13 plasma televisions and 2

LTD televisions for US $49,066.85. The 13 plasma televisions were to be

shipped directly to Primis Corporation Ltd’s address in the USA with a

desired delivery date of 11 May, 2007. The 2 LCD televisions were to be

picked up at one of the store’s branches in Miami.

41. Even though the invoice refers to the purchase of 13 plasma televisions for some

US $46,000, the claimants only mounted a claim for US $30,000. I am of the view that it

was reasonable to draw the inference that the said sum of US $30,000 had been spent by

the claimants on the purchase of plasma televisions as part of WIN TV’s immediate

funding needs. The document dated 22 May, 2007 signed by the President of WIN TV

setting out the immediate funding needs of WIN TV for 25 plasma screens costing US

$30,000 provides support for such an inference.

26

[12] of witness statement.

of 23

42. I am of the view that the judge could have come to the conclusion that, even

though invoiced to Primis Corporation, the sum of US$30,000 was expended by the

claimants on behalf of WIN TV to purchase these screens. This was undoubtedly because

in the earlier correspondence referred to, namely Appendix 10, the defendants

acknowledged that Seepersad’s company, Primis Corporation, had indeed made

payments to WIN TV for and on behalf of the claimants. Thus, it could be reasonably

inferred that Primis Corporation was making this payment to WIN TV for and on behalf

of the claimants. Additionally, the document dated 22 May, 2007 was signed by the then

President of WIN TV, to which no objection was taken, and supported Seepersad’s

testimony that, at the material time, WIN TV was looking to source 25 plasma screens, as

part of its immediate funding needs, at a projected cost of US$30,000.

43. However, in determining whether or not compensation should be awarded to

Seepersad for this investment, the judge should have gone on to consider the issue of

mitigation and, in particular, what Seepersad said at para. 14 of his witness statement:

“Jaikaran knew that I purchased the plasma screens specifically for this contract

and yet he unilaterally cancelled the said contract leaving me to dispose of the

said screens at my own cost.”

44. While Seepersad can be said to have acted admirably in seeking to mitigate his

loss, no evidence was led as to the manner of disposal of, nor the price obtained for, these

screens. It is a basic principle of law that where a claimant takes steps to mitigate the loss

to him consequent upon the defendant’s wrong and these steps are successful, the

defendant is entitled to the benefit accruing from the claimant’s action and is liable only

for the loss as lessened: McGregor on Damages.27

Thus the trial judge fell into error by

failing to consider the extent of the loss as lessened by Seepersad’s steps to mitigate.

27

McGregor on Damages (n 21) [9-006].

of 23

45. It is clear that in a case where the fact of a loss has been shown but the necessary

evidence as to its amount is not given, nominal damages may be awarded28

. In the Privy

Council decision of Greer v Alstons Engineering, it was held that a nominal award of

$5000 was sufficient in a case where the fact of loss had been shown but insufficient

evidence as to its amount was given. As stated by Sir Andrew Leggart29

:

“Although the loss under this head was unquantified, it is the duty if the court to recognise it by

an award that is not out of scale. The sum of $5000 may indeed be regarded as on the low side;

but it is not so low as to be wrong in principle and to warrant any interference by their

lordships.”

46. In my view, an award of TT$5000 would similarly be proportionate and just in

the circumstances of the instant case30

.

Transfer of licence

47. In my view, in seeking to rectify the oppression complained of, it was necessary

for the judge to consider the effect of the global order that she was making. She sought to

balance the principles of minimal interference and reasonable expectations. As there

existed a breach of trust and confidence between the competing factions, she determined

that a buyout order should be made. She therefore ordered that Jaikaran, the transferor,

purchase the shares held by Seepersad in WIN TV at a fair market value in accordance

with section 242(3)(g) of the Companies Act. She further made the compensation order

whereby Jaikaran was to pay to the claimants the sum of $9,252,849.27 and US$30,000.

Finally she ordered that Jaikaran take all steps necessary to transfer the licence granted in

his name by TATT to WIN TV.

28

McGregor on Damages (n 21) [12-004]; Greer v Alstons Engineering Sales & Services Ltd [2003] UKPC 46 [6]. 29

Greer (n 29) [9]. 30

See also Pan Trinbago Inc. v Simpson CA S-027/2013 [61].

of 23

48. In my respectful view, given the fact that:

i. the aim of her order would have been to ensure fair treatment of the claimants;

ii. the order would have severed all ties between the competing factions; and

iii. the order would effectively have restored almost complete control of the company

to Jaikaran, the majority shareholder;

the least intrusive and fairest measure, from a business perspective, would have been to

preserve the status quo and not order Jaikaran to seek to effect a transfer of the licence to

WIN TV as this would no longer have any effect on the aggrieved party. For those very

reasons I am of the view that the order I have made does not require me to go further and

order the transfer of the licence to WIN TV. While Jaikaran has argued that the trial

judge erred in law by ordering that Jaikaran take all necessary steps to effectively transfer

the broadcasting licence granted in his name by TATT to WIN TV, it is unnecessary,

having regard to the conclusion which I have reached, to determine the issue as framed.

VI. Conclusion.

49. By reason of the foregoing, the appeal is dismissed. In all the circumstances I

order:

i. That Jaikaran do pay to the claimants the sum of $5,810,386.80 with interest

thereon at the rate of 6% per annum from the date of filing of the claim to the date

of judgment of the learned trial judge;

ii. That Jaikaran do pay to the claimants the sum of $5,000 as nominal damages; and

iii. That the decision of the judge with respect to the transfer of the broadcasting

licence is hereby set aside.

50. Having regard to my orders, and for the avoidance of doubt, TIC’s shares are to

be formally transferred to Jaikaran upon payment of the said sums.

of 23

51. The court will hear the parties on the issue of costs.

P. Moosai

Justice of Appeal

republic of trinidad and tobago in the court of...

Documents