Meaning of Order in Jamaican Civil Procedure: Mediation Report & Tomlin Orders, Study notes of Civil procedure

Download Meaning of Order in Jamaican Civil Procedure: Mediation Report & Tomlin Orders and more Study notes Civil procedure in PDF only on Docsity! [2012] JMCC Comm. 15 IN THE SUPREME COURT OF JUDICATURE OF JAMAICA IN THE COMMERCIAL DIVISION CLAIM NO. 2011 CD 00067 BETWEEN GLENN CLYDESDALE 1ST CLAIMANT AND VICTORIA CLYDESDALE 2ND CLAIMANT AND MAGWALL JAMAICA LIMITED 1ST DEFENDANT AND RICHARD CATLING 2ND DEFENDANT AND SAMUEL CATLING 3RD DEFENDANT IN CHAMBERS Mrs. Symone Mayhew and Ms. Debbie Wilmot, instructed by Wilmot Hogarth & Co. for the Claimants. Mr. Vincent Chen instructed by Chen Green & Co. for the Defendants. HEARD: 27 September, and 8 November 2012. CIVIL PROCEDURE AND PROCEDURE-MEDIATION-RULE 74.12(1) OF THE CPR- MEANING OF ORDER IN TERMS OF MEDIATION REPORT-RULE 42.7 OF THE CPR- APPROPRIATE FORM OF CONSENT ORDER-WHETHER AFTER ENTRY INTO CONFIDENTIAL AGREEMENT IN FORM PROVIDED BY RULES TOMLIN ORDER TO BE ENTERED OR WHETHER PARTY SEEKING TO ENFORCE TO FILE NEW ACTION- OVERRIDING OBJECTIVE OF DEALING WITH CASE EXPEDITIOUSLY AND SAVING TIME AND EXPENSE. Mangatal J: 1. This case raises interesting questions, as to the proper interpretation of Rule 74.12 of the Civil Procedure Rules 2002 (“the CPR”), and its interplay with Rule 42.7. Rule 74.12 is concerned with action by the court after the filing of a mediation report. Rule 42.7 deals with Consent Judgments and Orders. I would like at the outset to express my gratitude to Counsel on both sides for their industry and well-thought out submissions. This is, I believe, a fairly novel point in our jurisdiction, and there is a dearth of local authority on the question of what an order made in terms of a mediation report really means. 2. The 1st Claimant Glenn Clydesdale (“Mr. Clydesdale”) is a shareholder and former Director of the 1st Defendant Magwall Jamaica Limited (“Magwall”). 3. The 2nd Claimant Victoria Clydesdale (“Mrs. Clydesdale”) is the wife of Mr. Clydesdale. 4. Magwall is a limited liability company, duly incorporated under the laws of Jamaica, and is a wholly owned subsidiary of Magwall Caribbean Limited (“Magwall Caribbean”). 5. The 2nd and 3rd Defendants Richard Catling and Samuel Catling are both directors of Magwall Caribbean and Magwall and are also Chief Financial Officer and Chief Executive Officer respectively of Magwall. 6. The Particulars of Claim make a number of allegations against the Defendants. Amongst other matters, it is alleged that: a. Mr. Clydesdale agreed to extend a short-term loan in the amount of US$100,000 to Magwall at an interest rate of 2% per month for each month or part thereof that the loan remained outstanding, commencing March 1, 2011, such loan being repayable on demand “Loan 1”; and b. Mrs. Clydesdale agreed to extend an interest free loan of US$200,000.00 to Magwall, such loan being repayable on demand “Loan 2”. 7. The Clydsdales also allege that the 2nd and 3rd Defendants have exercised their powers as the directors of Magwall Caribbean and of Magwall in a manner that is oppressive and unfairly prejudicial to them. 8. Amongst other claims, the Particulars of Claim seek the following: 3) Pursuant to Part 74.12(1) and 42.7 of the Civil Procedure Rules the court is to make an order in terms of the mediation report. 4) The Claimants have honoured their obligations under the Mediation Settlement Agreement but the Defendants have failed and or refused to honour their obligations under the Agreement. 5) In the circumstances it is just and equitable that an order be made in terms of the …Agreement and/or the Mediation Report. 17. Prior to the commencement of the hearing, both parties indicated to me that they were agreed that the Court must make an order in terms of the mediation report. Both Counsel Mrs. Mayhew for the Clydesdales, and Counsel Mr. Chen for the Defendants, agreed upon the mandatory nature of the provision in Rule 74.12(1) and the meaning and import of the word “must”. I found that the position taken by Counsel as to the mandatory nature of the Rules was quite appropriate. Reference was made by Mrs. Mayhew to a decision of the Ontario Supreme Court of Justice in Tim Hagel v. Andrew Giles and Ors. 2006 CANLII3964 (ONSC). As pointed out by Mrs. Mayhew in her submissions, our Mediation Rules were modeled on the Canadian Rules. However, it is useful to compare and contrast the corresponding provisions of the Canadian Rules. It will be readily seen that whereas the corresponding Canadian section is permissive, our Rule 74.12(1) has plainly taken a different path. The Jamaican Rules Committee has taken the mandatory approach to entry of orders once agreement is reached. 18. Rule 74.11 (1) provides for the time frame within which the mediator is to file a report in relation to the completion of the mediation and date of referral .Rule 74.11(2) provides that: 74.11 (2) Where an agreement is reached between the parties, the signed agreement shall accompany the report or be filed at the registry not later than 30 days after the completion of the mediation, unless it is a term of the agreement that it remains confidential. 19. Rule 74.12(1) provides that: 74.12.1 (1) Where an agreement has been reached, the court must make an order in terms of the report [pursuant to rule 42.7]. 20. Rule 42.7 provides as follows: Consent judgments and orders 42.7 (1) This rule applies where- a. none of these Rules prevents the parties agreeing to vary the terms of any court order; and b. all relevant parties agree the terms in which judgment should be given or an order made. (1) Except as provided by paragraphs (3) and (4), this rule applies to the following kinds of judgment or order- (a) A judgment for- (i) The payment of a debt or damages (including a judgment or order for damages or the value of goods to be assessed); (ii) The delivery up of goods with or without the option of paying the value of the goods to be assessed or the agreed value; and (iii) Costs. (b) An order for- (i) The dismissal of any claim, wholly or in part; (ii) The stay of proceedings on terms which are attached as a schedule to the order but which are not otherwise part of it (a “Tomlin Order” ); (iii) The stay of enforcement of a judgment, either unconditionally or on condition that the money due under the judgment is payable on a stated date or by installments specified in the order; (iv) Setting aside or varying a default judgment under part 13; (v) The payment out of money which has been paid into court; (vi) The discharge from liability of any party; (vii) The payment, assessment or waiver of costs, or such other provision for costs as may be agreed; and (viii) Any procedural order other than one falling within Rules 26.7(3) or 27.8(1) and (2). (2) This rule does not apply- (a) Where any party is a litigant in person; (b) Where any party is a minor or patient; (c) In Admiralty proceedings; or (d) Where the court’s approval is required by these Rules or any enactment before an agreed order can be made. (2) This rule does not allow the making of a consent order by which any hearing date fixed by the court is to be adjourned. (4) Where this rule applies the order must be- (a) Drawn in the terms agreed; (b) Expressed as being “By Consent” (c) Signed by the attorney-at-law acting for each party to whom the order relates; and (d) Filed at the registry for sealing. THE SUBMISSIONS ON BEHALF OF THE CLYDESDALES 21. It was Mrs. Mayhew’s submission that having determined that the court is required to enter an order in terms of the Report, whether the settlement agreement is attached to the report or not, the question arises as to what type of order should be made. Rule 74.12 dictates that the order should be in accordance with Rule 42.7 and this rule deals with various types of consent orders. It was Counsel’s submission that when one considers the result of the mediation and the fact that the parties agreed to keep the terms confidential, but to use the Supreme Court to enforce the order in the event of breach, the obvious order is a Tomlin type order as provided for in Rule 42.7(b)(2) of the CPR. THE SUBMISSIONS ON BEHALF OF THE DEFENDANT 22. Mr. Chen quite helpfully set out the categories into which the orders provided for in Rule 42.7 can be “loosely categorized”, as follows: (a). Settlement of the matter; (b) entry of a judgment for payment or dismissal of the action or the doing of some act in the action itself; and (c ) stay of the action on terms (Tomlin Order). Mr. Chen submits, correctly, that these categories have different implications. 23. Those in (a), it was argued, bring the proceedings to an end and no further steps can be taken within that action; a new action would have to be brought to enforce them. Those in (b) will be enforced by the issue of process within the action and the proceedings remain alive until the orders are enforced. Those within (c ) keep the proceedings alive as it is only stayed upon the terms agreed. It is Mr. Chen’s submission that in the case of particular piece of litigation had not been transposed into the schedule to a Tomlin Order. When one of the corporate parties applied for an Order enforcing the terms of the schedule, it was argued by the other party that the corporate party was itself in breach of a term of the larger agreement and accordingly, was not entitled to the Order sought. The Privy Council decided, as a preliminary point, that the argument could indeed be mounted by the party resisting enforcement. See also paragraph A7-19 of Mr. Foskett’s Lecture. RESOLUTION OF THE ISSUES 31. In my judgment, the court has to consider the nature of the compromise embodied in the Agreement. It also has to look at the contents of the Mediation Report, and consider the proper construction of the relevant rules. 32. I agree with Mr. Chen that the agreement reached at mediation can be as wide as the parties may devise and, so long as it is correctly worded, such an agreement will fall within one of the categories contemplated by Rule 42. Mediation proceedings are indeed fully accommodated by the Rules. 33. I also think that it is important to put aside any considerations to do with breach in relation to a consideration of this application. Questions of breach and enforcement are in my judgment not relevant to a consideration of the court’s compulsory task of entering an order in terms of the mediation report. They can only confuse the issue if they are examined at this point. The question at this stage is simply what format should the order take in order to properly reflect and represent the agreement between the parties. In addition, what is the correct construction to attach to the wording of the rules, bearing in mind the overriding objective of dealing with cases justly when considering the just and proper way to interpret Rules 74.12(1), and Rule 42.7. 34. In this case, the Mediation Report announces that the claim and the defence are settled. However, it is important to examine the Agreement itself. This Agreement is in a form which requires certain sections to be filled out by the parties, depending on the particular facts and circumstances of their compromise. Part 74 of the CPR. establishes automatic referral to mediation of certain matters, and applies to matters already filed within the civil jurisdiction of the Supreme Court. Mr. Chen has submitted that the settlement agreed has brought the original proceedings to an end, and that the parties have made no provision in the Agreement for the making of further applications to the court for enforcement. However, I disagree with that submission entirely. To my mind, Mr. Chen’s argument ignores the significance of Clause 2b. Whilst Clause 2a of the standard form agreement states that in exchange for the promises made by the parties they agree that execution of the Agreement operates as a withdrawal of complaints identified by the “mediation case number found in the Preamble above”, Clause 2 b very significantly for present purposes, states: 2. In exchange for the promises made by ALL PARTIES to this Agreement, they both freely and voluntarily agree: b. That in the event any party hereto believes that the other has violated a term or condition of this Agreement to notify in writing the Mediation Manager at the Dispute Resolution Foundation within 30 calendar days of the date of the alleged violation and request that the terms of the Agreement be specifically implemented. In addition, the parties agree to utilize the Supreme Court to enforce the terms and Conditions of the Settlement Agreement. (My emphasis) 35. The parties also agreed to keep the terms of the Agreement confidential –see the Mediation Report filed by the Mediator in the Supreme Court on February 9, 2012. As stated by David Foskett Q.C. at paragraph A7-04, there are relatively simple compromises, for example, involving the mere payment of a sum of money, or the giving up of possession of premises. In such cases, a straight-forward consent judgment or order can be entered. For example, with regard to payment of a sum of money, Rule 42.7(2)(a)(i) could come into play. If this agreement were arrived at by way of mediation, then in such a case, one would expect that the Agreement could be exhibited (although it does not necessarily have to be the case), and in that event , a straight-forward consent order could be entered up pursuant to Rule 74.12(1) and Rule 42.7. However, there are relatively more complicated cases, involving for example a number of inter- related obligations, some of them being of a nature that, even had the parties wished otherwise, they could not be made orders of the court. It is pointed out that there is no jurisdiction to make a judgment or order by consent which the court would not otherwise have jurisdiction to make. This is one of the situations where a Tomlin order can prove very useful. See also Phillips v. Clarke [1969] 3 All E.R. 710, cited by Mrs. Mayhew. At paragraph A7-05, Mr. Foskett has this to say about the Tomlin order: What had emerged, certainly by the early part of this century, was a practice whereby parties agreed to the stay of the proceedings upon the terms of the agreement between them. Those terms were recorded in a Schedule to the Order and the intention was that the Court should be able to make orders in aid of the enforcement of those terms as the result of an application by summons within the stayed action. In other words, no fresh action was required, although, of course, a further step in the proceedings was necessary in order to obtain a suitable form of Order. 36. At paragraphs A7-19, A7-20, (upon which passages Mrs. Mayhew relies in support of her Submissions), the learned author states: Before drawing all this to some form of conclusion, let me draw attention to one feature of the standard Tomlin Order procedure which parties do from time to time adapt. Since the Schedule to the Order is part of the Court record, it is open to public inspection. Parties may wish, for an assortment of reasons, to keep their settlement confidential. This can, at least in part, be achieved by recording the terms of the settlement on a separate document rather than in the schedule. Provided that that document is clearly identified on the face of the Tomlin Order, there can be no objection to dealing with things that way. 37. Whilst, therefore, Mr. Chen is right that the Agreement does not expressly speak to a stay, it seems to me that in effect that is what is being agreed. The action is being settled, yet it is agreed that if there is allegation of breach, the parties will utilize the Supreme Court for the enforcement of the terms and conditions of the Settlement Agreement. In other words, the bargain is that the action would not be resorted to thereafter except for the purpose of enforcing the terms. Since it is the Supreme Court from whence the matter came to the Mediator, then for the parties to agree to utilize the Supreme Court for enforcement of the Agreement, must mean going back to the Supreme Court, or in other words, resorting to the action filed for the limited purpose of enforcing the terms of the Agreement. There is no magic in the word “stay”, or indeed, in the words “liberty to apply”, if words such as those utilized in the instant case are extant. I therefore agree with Mrs. Mayhew that the result of the mediation, coupled with the parties agreeing to keep the Agreement confidential, and agreeing to use the Supreme Court to enforce the terms in the event of breach, do point heavily to the appropriateness of a Tomlin order. This conclusion is strengthened because a number of the terms were to do with matters outside of those claimed, could not have been ordered by the Court in any event as a consent judgment, and some arose subsequently to the filing of the Claim Form. These characteristics of the contents of the Agreement, do not, as Mr. Chen argued, support the view that a new claim would have to be made on the Agreement, because such subject matter are exactly the kind that are aptly suited to be