Development Bank of St. Kitts and Nevis v Browne, Walwyn-bowrin and Morris
| Jurisdiction | Saint Kitts and Nevis |
| Judge | Ramdhani, J. |
| Judgment Date | 08 April 2014 |
| Neutral Citation | KN 2014 HC 7 |
| Docket Number | SKBHCV 2012/0084 |
| Court | High Court (Saint Kitts and Nevis) |
| Date | 08 April 2014 |
High Court
Ramdhani, J. (Ag.)
SKBHCV 2012/0084
Mr. Arudranauth Gossai for the applicant/3rd defendant.
Ms. Deidre Williams for the respondent/claimant.
Civil practice and procedure - Joint and several liability — Default judgment against one of several defendants — Whether the principle of conclusive election applied — Merger of cause of action in default judgment — Whether applicable to case of joint and several liability — Finding that the doctrine of election does not apply to the case as pleaded — Notice of Discontinuance — Discontinuance against one defendant — Effect on the remaining defendant — Whether operating as a discharge as against remaining defendant — Finding that there was no actual notice filed stating that there was a ‘release’ from the judgment debt — Costs in the cause — Civil Practice and Procedure Rules Part 12.9.
Ramdhani, J. (AG.) This is an application dated 25 July 2013 by the 3rd defendant/applicant (the 3rd defendant') seeking to strike out the claim against him and for costs on several grounds. First, the 3rd defendant contends that the claimant, having sought and obtained a default judgment against the 2nd defendant, has effectively made a conclusive election in law, the consequences of which is that the cause of action against him has merged into the judgment. Second, he argues that in addition, and in the alternative, the claimant, having filed a notice of discontinuance and withdrawal against the 2nd defendant, the claimant has thereby given him a release, the effect of which also discharged the 3rd defendant from any liability as a co-surety.
The claim in this matter was filed on the 28 February 2012 against the three defendants, seeking to recover, inter alia, the sum of $97,950.99 as monies due and owing jointly and severally, on a loan extended to the 1st defendant, which the claimant stated was guaranteed by the 2nd and the 3rd defendants.
On the 18 May 2012, the 3rd defendant filed a Defence, disputing the claim on several grounds.
On the 30 May 2012 the claimant requested and obtained default judgment under Part 12 of the Civil Procedure Rules 2000 against the 2nd defendant for the entire sum claimed plus interest and costs.
On the 13 June 2012, the claimant filed a Judgment Summons under Part 52 against the 2nd defendant seeking to enforce payment of the judgment sum.
Between December 2012 and May 2013, Counsel for the 3rd defendant wrote a number of letters to Counsel for the claimant in an effort to have the matter withdrawn and costs paid. Apart from a single response from Counsel in January 2013, there was no other communication from that side.
On the 9 April 2013, the 2nd defendant paid part of the judgment debt to the claimant.
The present application to dismiss the claim against the 3rd defendant was filed on the 25 July 2013.
The matter continued against the 2nd defendant until the 31 July 2013, when the claimant filed a Notice of Discontinuance against her.
The first issue raised by the application, is whether the principle of conclusive election applies to the circumstances of this case, and if it does whether there was in fact this election with the resulting consequence that the cause of action existing against the 3rd defendant has been extinguished as having been merged into the default judgment against the 2nd defendant?
On his application, the 3rd defendant did say that he reserved the right to rely on other grounds. An application should contain all the grounds on which an applicant seeks to rely. He may, however, raise other legal issues that have not strictly arisen from the grounds. In this case the 3rd defendant did just that; in his submissions filed on the 9 October 2013, he raised additional legal matters.
The second issue which he raised by his submissions and at the hearing for the court's determination is whether the privileged communications between the parties should be examined by the court, on the basis that there has been a concluded agreement between the parties that the claimant would withdraw the matter? He added for good measure that this discussion and agreement also amounted to an undertaking given to withdraw the matter which the claimant should not be allowed to resile from.
The third issue raised is whether the Notice of Discontinuance filed by the claimant with regards to the 2nd defendant amounted to a release of the 2nd defendant and thereby discharged the 3rd defendant?
The 3rd defendant contends that when the claimant sought and obtained default judgment against the 2nd defendant, this was a conclusive election and as such there was a merger of the cause of action against him into the judgment obtained against the 2nd defendant. He also appears to be relying on the separate doctrine of merger of cause of action, his argument being on the same facts when the claimant obtained default judgment against the 2nd defendant, the single cause of action was merged in the judgment. He states that on either the doctrine of election or the merger of the cause of action, (Whilst an election will result in a merger, the doctrine of merger is not in all cases dependent on there being an election. Note Halsbury Laws Volume 9 at paragraph 624 states: “As a general rule, a judgment recovered against one of more of a number of joint debtors bars an action against the others, even if the creditor did not know of their existence at the time when the first action was brought, and even if the judgment is not satisfied. This principle is said to depend upon the doctrine of merger or upon the rule that joint debtors have the right to be sued together.”) the result is that the claimant may not continue any claim against him for the same debt. He has relied on a number of cases to support his position, namely John Hopkin v. Robinson Lumber Co. Ltd. Civil Appeal No. 8 of 1998 (Grenada); Hammond v. Scholfield [1891] 1 Q.B. 453; Morel Brothers Co. Westmoreland (Earl of) [1903] 1 K.B. 64.
Does this principle help the 3rd defendant in the circumstances of this case?
The doctrine of election was recently revisited by the Privy Council in Rukhmin Balgobin v. South West Regional Authority [2012] U.K.P.C. 11, where the Board held that “where a claim against more than one defendant could not be pursued either because the factual basis of the suit against one was incompatible with that necessary to establish liability against the other or the legal bases of both claims could not be consistently advanced, an unequivocal election to pursue one basis of the claim would preclude reliance on the other”.
The Board went on to explain that an unequivocal election meant the deliberate adoption of liability by a claimant to choose to pursue one defendant to judgment at the expense of pursuing the claim against the other. It also requires that the choice must be communicated to the other party, and this must be done in such a way that would lead the other party to believe that the claimant had made a deliberate preference of the chosen alternative over any other. Balgobin made the point that in an appropriate case if a claimant were to seek and obtain a default judgment, it may amount to an unequivocal election.
The principle of election of course is only applicable where it is genuinely feasible. It is properly applicable where there is a genuinely alternative liability situation. Morel Brothers; Scarf v. Jardine [1881–82] L.R. 7 App. Cas. 345. It is also relevant in cases of joint liability between two or more debtors and cases in which the cause of action against one is inconsistent with the cause of action against the other.
It is in these cases that the question of an unequivocal election will have significant consequences and will have the effect that a claimant will be barred from proceeding against any other person with regards to the same cause of action which was the subject of the election.
In Balgobin, Lord Kerr delivering the judgment of the Board relied on the decision in King and Another v. Koare (1844) 13 M & W 494 to explain the consequences of election. In particular His Lordship pointed to the judgment of Parke B. where he stated:
““If there be a breach of contract, or wrong done, or any other cause of action by one against another, and judgment be recovered in a court of record, the judgment is a bar to the original cause of action, because it is thereby reduced to a certainty, and the object of the suit attained, so far as it can be at that stage; and it would be useless and vexatious to subject the defendant to another suit for the purpose of obtaining the same result. Hence the legal maxim, ‘transit in rem judicatam,’—the cause of action is changed into matter of record, which is of a higher nature, and the inferior remedy is merged in the higher. This appears to be equally true where there is but one cause of action, whether it be against a single person or many. The judgment of a court of record changes the nature of that cause of action, and prevents its being the subject of another suit, and the cause of action, being single, cannot afterwards be divided into two. Thus it has been held, that if two commit a joint tort, the judgment against one is, of itself, without execution, a sufficient bar to an action against the other…
“We do not think that the case of a joint contract can, in this respect, be distinguished from a joint tort. There is but one cause of action in each case. The party injured may sue all the joint tortfeasors or contractors, or he may sue one, subject to the right of pleading in abatement in the one case, not in...
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