Pinneys Hotel Development Ltd v St. Kitts Nevis and Anguilla National Bank Ltd

• Jurisdiction: Saint Kitts and Nevis
• Judge: Saunders, M
• Judgment Date: 24 July 2024
• Judgment citation (vLex): [2024] ECSC J0724-1
• Docket Number: CLAIM NO. SKBHCV2022/0121 formerly SKBHCV2017/0002
• Court: High Court (Saint Kitts and Nevis)

Between:

[1] Pinneys Hotel Development Limited

Claimant

and

[1] St. Kitts Nevis and Anguilla National Bank Limited

Defendant

CLAIM NO. SKBHCV2022/0121 formerly SKBHCV2017/0002

IN THE HIGH COURT OF JUSTICE

Appearances:

Angela Cozier for the Claimant

Damian E. S. Kelsick, KC for the Defendant

Saunders, M

1 In these proceedings the Claimant (“ Pinneys Hotel”) has sought consequential loss arising from the Defendant's (“ the Bank's”) breach of a loan agreement because the Bank refused to disburse the loan. The Bank's defence, in summary, is that although it admits that it had agreed to issue the loan, it alleges that it was Pinneys Hotel that first repudiated the agreement by its failure to provide adequate security.

2 On 16 February 2024 Pinneys Hotel issued its third application to strike out the Bank's pleadings (“ the Third Application”) and also to seek relief that the Court has no jurisdiction, or, should refrain from exercising its jurisdiction to permit the Bank's Amended Defence filed 3 July 2018 (“ the Amended Defence”) to subsist. Pinneys Hotel stated as grounds of the Third Application that the Amended Defence did not comply with:

• a. Paragraphs (1) and (2) of a prior Order of Master Actie that prolix paragraphs of the Bank's Defence be struck out; and

• b. Part 10.5 of the CPR.

3 On 6 June 2024, I heard the parties' oral submissions and having also read their written submissions, Pinneys Hotel's affidavit in support and the Bank's Notice of Opposition, I have decided to dismiss the Third Application for the reasons set out below.

BACKGROUND TO THE THIRD APPLICATION

4 On 11 October 2017 Pinneys Hotel applied for the first time to Strike Out certain parts of the Bank's Defence on grounds that they were an abuse of process, prolix and failed to disclose a reasonable ground for defending the claim (“ the First Application”). The First Application was granted, in part, by Master Actie (as she then was) on 26 June 2018 (“ the Actie Order”). The Actie Order struck out paragraphs 3(a)(vi) to 3(xxiv) of the Defence for prolixity (“ the Prolix Paragraphs”) and the Bank was ordered to file and serve the Amended Defence to reflect that ruling. Paragraphs 1 and 2 of the Actie Order, in full, are as follows:

“1. Paragraphs 3(a)(vi) to (xxiv) of the defence are struck out pursuant to CPR 26.3(1)(d).

2. The defendant shall file and serve an amended defence to reflect paragraph (1) of the order, within seven (7) days of the delivery of the judgment.”

5 The Bank filed the Amended Defence which took out the Prolix Paragraphs but also added certain paragraphs (“ the New Allegations”) in an attempt to reformulate what it had intended to say in the Prolix Paragraphs. On 18 July 2018, Pinneys Hotel applied to strike out the New Allegations (“ the SecondApplication”) on the basis that the Bank should have obtained Court permission to plead them. Master Dyer (Ag.), as she then was, granted the Second Application. On appeal, however, it was decided that the First Case Management Conference had not passed, the Bank did not need permission to amend the Defence to rely on the New Allegations and the Amended Defence was deemed properly filed (“ the Court of Appeal Judgment”).

IS THE AMENDED DEFENCE IN COMPLIANCE WITH PARAGRAPHS (1)-(2) OF THE ORDER

6 Pinneys Hotel now argues that the Amended Defence does not comply with paragraphs 1–2 of the Actie Order as material from the Prolix Paragraphs, although struck out, has been included in the New Allegations. It is not in dispute that, the Prolix Paragraphs are entirely struck though in the Amended Defence, the New Allegations were an attempt by the Bank to encapsulate the Prolix Paragraphs in a manner that was not objectionable to the Court and that while the Prolix Paragraphs are made up of nineteen (19) paragraphs, the New Allegations are only comprised of five (5). It is also not in doubt that the Court of Appeal Judgment had deemed the Amended Defence properly filed and had decided that it was open to the Bank to amend its defence as it deemed fit at the relevant time.

7 It is not sufficient for Pinneys Hotel to point to a paragraph in the New Allegations and to say that it contains the substance, or, part of the substance of one of the Prolix Paragraphs and that ipso facto that paragraph should be struck out, or, that the Bank is in breach of the Actie Order. Whether written material is “prolix” is a function of the inscrutableness, as a whole, of the relevant words and paragraphs employed. The Actie Order, in my view, therefore, cannot be construed as a ban on the use of particular phrases, or, paragraphs which make up the Prolix Paragraphs. To do so would mean that an order that a certain portion of a document is “prolix” is necessarily an order that constituent words or paragraphs, regardless of whether they are themselves “prolix”, should be removed from a litigant's lexicon entirely. When I asked Ms. Cozier whether she considered the New Allegations to also be prolix, she answered that she did not. To me, that answer belies any possible suggestion that the New Allegations were pleaded in breach of the Actie Order as argued.

8 Ms. Cozier also submitted that the New Allegations continued the same paragraph numbering as the Prolix Paragraphs (so, 3(a)(vi),(vii),(viii),(ix)… to 3(xxiv)) and that was also a breach of the Actie Order. As I have discussed above, the Actie Order mandated that the Prolix Paragraphs, pleaded in the manner in which they had been, be struck out. The striking out of the Prolix Paragraphs had nothing to do with their numbering. This second submission amounts to a suggestion that the Bank was required to skip the paragraph numbers that were struck out and to start pleading the New Allegations at, for example, “3(xxv)”. Had the Bank pleaded the Amended Defence in that way, not only would the numbering be counterintuitive, I do not believe that it would have been more consistent with what the Actie Order mandated.

IS THE AMENDED DEFENCE IN NON-COMPLIANCE WITH PART 10.5 OF THE CPR

9 Part 10.5 of the CPR is as follows:

“Defendant's duty to set out case

10.5 (1) The defence must set out all the facts on which the defendant relies to dispute the claim.

(2) Such statement must be as short as practicable.

(3) In the defence the defendant must say which (if any) allegations in the claim form or statement of claim –

(a) are admitted;

(b) are denied;

(c) are neither admitted nor denied, because the defendant does not know whether they are true; and

(d) the defendant wishes the claimant to prove.

(4) If the defendant denies any of the allegations in the claim form or statement of claim –

(a) the defendant must state the reasons for doing so; and

(b) if the defendant intends to prove a different version of events from that given by the claimant, the defendant's own version must be set out in the defence.

(5) If, in relation to any allegation in the claim form or statement of claim, the defendant does –

(a) admit it; or

(b) deny it and put forward a different version of events, the defendant must state the reasons for resisting the allegation. 109 108

(6) The defendant must identify in or annex to the defence any document which is considered to be necessary to the defence.

(7) A defendant who defends in a representative capacity must say –

(a) what that capacity is; and

(b) whom the defendant represents.

(8) The defendant must verify the facts set out in the defence by a certificate of truth in accordance with rule 3.11.”

10 There has been considerable guidance from the Court of Appeal over the years concerning a Defendant's duty to set out their case pursuant to Part 10.5 of the CPR. Without rehashing all of those decisions and the specific rules in part 10.5 of the CPR that they applied, it is sufficient to refer to the decision of the Court of Appeal Elwardo Lynch v Ralph Gonsalves Civil Appeal No.18 of 2005. In that decision the defendant's case was struck out having pleaded, without more, “no admission” in respect of the claimant's allegation that he had published defamatory statements of him. In finding that the trial judge was entitled to make the finding that the claimant was not obligated to prove that allegation, Barrow JA stated as follows at [11]–[12]:

“What the defence stated, in response to the allegation in the statement of claim that the defendant published the defamatory words, was: “No admission is made to paragraph 4 of the Statement of Claim.” Unsurprisingly, the judge held that that defence was a violation of the rule because the defendant could not claim that he did not know whether it was true that he had published the words alleged.

…

With respect, I do not see the need to address these arguments because, as I understand it, the consequence of failing to defend against an allegation is the same as it was under the old rules of court. In the old rules it was explicitly stated in RSC order 18, rule 3 that if there is no defence to a material allegation in the statement of claim that allegation must be treated as admitted. Where an allegation was admitted RSC order 27 rule 3 entitled a plaintiff to apply for judgment on admissions. In CPR 2000 the same purport is contained in rule 12.5, which states that the consequence of failure to file a defence to the claim or any part of it is that the court office, at the request of the claimant, must enter judgment for failure to defend. Rule 12.5(c)(i) makes clear that a defendant is in the same position if his defence has been struck out as if he simply had not filed a defence or a defence to a part of a claim. When there is a failure to defend the rule does not require the claimant to prove his case; the claimant is at once entitled, at the stage of the failure to defend, to apply for judgment”.

11 Ms. Cozier has also referred me to the recent decision of the Court of...