Beaumont Park Ltd v Technology, Development & Investments Ltd

• Jurisdiction: Saint Kitts and Nevis
• Judge: Farara JA
• Judgment Date: 22 July 2024
• Judgment citation (vLex): [2024] ECSC J0722-2
• Docket Number: SKBHCVAP2020/0018
• Court: Court of Appeal (Saint Kitts and Nevis)

Between:

Beaumont Park Limited

Appellant

and

Technology, Development & Investments Limited

Respondent

Before:

The Hon. Mr. Trevor Ward Justice of Appeal

The Hon. Mde. Esco Henry Justice of Appeal

The Hon. Mr. Gerard St. C. Farara Justice of Appeal [Ag.]

SKBHCVAP2020/0018

THE EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Civil Appeal — Compromise and Settlement Agreement — Construction and interpretation of release and discharge clauses — Whether the learned judge erred in construing clause 9 of the Compromise and Settlement Agreement — Whether the learned judge erred in construing the ‘Other Claim’ limb of clauses 17 — 19 of the Compromise and Settlement Agreement — Whether the appellant's claim against the respondent was barred by the ‘Other Claim’ limb of clauses 17 — 19 of the Compromise and Settlement Agreement

In the High Court of Justice, Beaumont Park Limited (“the appellant” or “BPL”) sought certain reliefs against three defendants, Technology, Development & Investments Limited (“the respondent” or “TDI”), Vitaly Kryuchkov (“Mr. Kryuchkov”) and Elena Pogoretskaya (“Ms. Pogoretskaya”). The reliefs sought were for orders that TDI and Mr. Kryuchkov pay to the appellant two distinct sums of money. The first, the Legal Fees Claim, was for payment of the sum of US$84,042.03. This claim was dismissed by the High Court in a written judgment dated 15 ^th June 2020 (“the judgment”) after trial. The appellant's appeal against this decision was not pursued before this Court.

The second claim, the Sums Advanced Claim, was for re-payment of the sum of US$3,118,357.81 expended by the appellant on the instructions of Mr. Kryuchkov for the benefit of the respondent (TDI). As pleaded in the statement of claim, the Sums Advanced Claim concerned sums advanced from the funds of the appellant between 14 ^th February 2014 and 10 ^th February 2017 totalling US$4,347,646.08, which advances were used to discharge the obligations of the respondent pursuant to a Shareholders' Agreement entered into around 9 ^th December 2013 (the “SHA”) between the appellant, the respondent, Mr. Kryuchkov, Strathmore Investments Limited (“SIL”), Bedford Investments Limited (“BIL”), Daislyn Sharpe (“Ms. Sharpe”) and Michael Martin (“Mr. Martin”), all shareholders of the appellant.

Pursuant to the terms of the SHA, the respondent agreed to fund the further development of certain lands situate in the Federation of St. Christopher and Nevis known as Beaumont Park (the “Project”). As pleaded in the statement of claim, at the Board meeting of the appellant on 5 ^th December 2013, Mr. Kryuchkov was appointed to the Board as nominee of the respondent and some 600,000 shares in the appellant company were issued to the respondent, TDI. The appellant pleaded that in causing it to make the advances, Mr. Kryuchkov breached his fiduciary duties to the appellant. The appellant asserted that the obligation to provide funding for the future development of the Project was, as per the terms of the SHA, that of the respondent, and accordingly the advances made from the appellant's funds in discharging the respondent's said funding obligations, were a debt to be repaid to the appellant. Consequently, whilst the respondent's funding obligation arose out of the SHA, the debt owed by the respondent did not arise out of the SHA.

The situation between the parties worsened and three claims were brought in the High Court: (i) the BIL/Michael Martin Claim (SKBHCV2016/0061) brought by BIL and Michael Martin against BPL, TDI, Vitaly Kryuchkov, Elena Pogoretskaya and TDI Real Estate Corp; (ii) the TDI/BPL Claim (SKBHCV2016/0093) brought by TDI and BPL against Michael Martin, Arthur Sharpe, Daislyn Sharpe, BIL and SIL; and (iii) the SIL Claim (SHBHCV2016/0101) brought by SIL against BPL, TDI, Vitaly Kryuchkov and Elena Pogoretskaya (collectively the “Three Claims”). After a successful court ordered mediation in February 2017, a Compromise and Settlement Agreement (“CASA”) was entered into on 11 ^th February 2017 by the parties settling the Three Claims.

By clause 9 of CASA, the SHA was terminated with immediate effect and all parties thereto were discharged from the performance of all ‘outstanding obligations’ thereunder. By clauses 17–19 of CASA, two categories of claims were discharged. In the first place, the defendants, their servants, agents, employees and successors in title to each of the Three Claims were discharged and released by the respective claimants from any and all actions, suits, causes of action, claims and demands whatsoever comprised in the respective Claim or otherwise. In the second place, the said defendants, and their servants, agents, employees and successors in title were released and discharged from any actions, suits, causes of action, claims and demands which ‘has or at any or but for the execution of this Compromise and Settlement Agreement could or might have had for or by reason of the Defendants shareholding or directorship, or the holding of any office, in BPL’ (the appellant) which second category of claims is referred to in the judgment below as the ‘Other Claim’.

The learned judge found that, on a balance of probabilities, the Sums Advanced Claim was proven in the amount claimed of US$3,107,995.44. However, he went on to hold that the Sums Advanced Claim is barred by the ‘Other Claim’ limb of clauses 17–19 of CASA. The judge also gave judgment in favour of the respondent on its counterclaim for a declaration that CASA remained in full force, but dismissed, on privity of contract principles, the respondent's counterclaim for an order requiring the appellant, its servants and agents, to perform their obligations to pay certain sums/benefits to Mr. Kryuchkov and Ms. Viviana DaSilva that were due to them under clauses 2 and 5 of CASA.

Being dissatisfied with the judge's ruling on both the Legal Fees Claim and the Sums Advanced Caim, the appellant appealed. The appellant challenged the judge's findings that the Sums Advanced Claim was barred by clauses 17–19 of CASA. The appeal essentially concerned a singular issue of interpretation of Clauses 9 and 17–19 of CASA and whether the learned judge was correct to conclude that the ‘Other Claim’ limb of clauses 17–19 applied to the Sums Advanced Claim thereby barring the appellant from bringing that claim against the respondent.

Held: allowing the appeal against the order barring the Sums Advanced Claim and the declaration on the Counterclaim, and making the orders set out at paragraph 76 of this judgment, that:

• 1. In construing the terms of a release, a court should be guided by the six principles set out by the House of Lords in Bank of Credit and Commerce International SA v Ali and others. These six principles can be distilled into two broad planks. The first is that there are no special rules of interpretation or construction to be applied by a court when construing releases or compromise agreements which would make the approach to their interpretation any different from the ordinary rules of construction to be deployed when interpreting the words of a contract. The second is that it is not uncommon for the wording of releases to be so wide as to extend its coverage not just to existing known claims, but also to existing unknown claims of the contracting parties which might come to light later. As a corollary to this second plank, the fact that a known claim at the time of contracting was not specifically identified and expressly stated to be covered by a release clause, while an important factor in determining whether it was covered by the contractual release, does not lead inexorably to the conclusion that it was not intended to and is not, as a matter of proper construction, covered by the release clause. The judge clearly had in mind these guiding principles when embarking on the exercise of construing clauses 17–19.

  Bank of Credit and Commerce International SA v Ali and others [2002] 1 AC 251 applied.

• 2. The Sums Advanced Claim related to monies already advanced by the appellant to the respondent to discharge the latter's obligation to provide funding under the SHA for the future development of the Project. On the evidence it was clear that this claim must have been known to exist at the time of entering into CASA by both the appellant and the respondent. Despite this, there is no mention whatsoever of this claim in CASA much less of the respondent being released or in some way absolved from its unquestionable liability to repay the sums advanced by the appellant.

• 3. By clause 9 of CASA, all parties to the SHA were released from all ‘unperformed obligations’ under the SHA. However, it is clear from the judgment that the learned judge did not embark upon the exercise of construing clause 9 and applying it to the issue in dispute between the parties in relation to the Sums Advanced Claim. This was, perhaps, because the wording of clause 9 is clear and unequivocal. The Sums Advanced Claim is a claim relating to the sums advanced by the appellant to TDI, allegedly in breach by Mr. Kryuchkov of his fiduciary duties to the appellant, to discharge the respondent's funding obligations under the SHA. The sums advanced by the appellant and to be repaid by the respondent gave rise to a debt outside the SHA. Properly construed, this debt or obligation to repay the sums advanced did not arise under the SHA. It was therefore a discreet claim made by the appellant for the reimbursement of the money which it advanced to the respondent. Moreover, the express purpose of CASA is an agreement to settle the Three Claims, and the Sums Advanced Claim was not the subject of any of the Three Claims settled by or under the terms of CASA. Accordingly, viewed in this way, the Sums Advanced Claim, albeit a prior existing claim known to the appellant and the respondent, was not caught by the ‘Other Claim’ provisions of clauses 17 to 19 of CASA.

• 4. Under...