THE HOYOS FILE: One legacy (so far) of Kingsland Estates
MARJORIE KNOX may have (so far) lost every case she took to court in Barbados over her rights as a shareholder of Kingsland Estates Ltd., but people who seek justice here already owe her a huge debt.
And her positive legacy in helping to reform a broken judicial system can surely not be in any doubt.
There is an appeal going on in the High Court of Barbados that would not be taking place were it not for Knox taking her case to the Caribbean Court of Justice (CCJ).
The innocuous-sounding CA 6 of 2010 opened last Monday (July 4, 2016) in the Barbados Court of Appeal. Regardless of its outcome, it is history in the making.
It came about as a result of the Privy Council’s ruling in June 2004 against Knox in the Kingsland Estates case, itself historic from the point of view that it was the last Barbados case to be heard by the Judicial Committee of the Privy Council (JCPC) before we switched to the CCJ.
But the matter currently before the appeals court is far more historic as it is only taking place because the CCJ removed the “security for costs” ordered by the Barbados court before Knox could get her appeal heard.
As Justice Wit of the CCJ wrote in the judgement, delivered in the summer of 2012: “We have decided that Mrs Knox does not have to pay any security for costs after all. In other words, the parties are back to square one and the appeal can now finally be heard. What a waste of time and what a waste of money; it is a thought that easily comes up. Of course, today’s judgment will hopefully provide guidance for future cases and that is important enough. But still . . .” (CCJ Appeal No. 8 of 2011, Page 27)
Of course, it only took the justice system another four years to get around to it. The case arose out of the said Kingsland case at the Privy Council, which ordered Knox to pay legal costs to the other parties involved. Five years and one day after the Privy Council ruling, Kingsland Estates finally declared a dividend, and Knox’s one-seventh stake made her entitled to almost three-quarters of a million dollars.
Five days later, the only remaining shareholders with “subsisting interests as garnishors” in the dividend awarded to Knox – the company’s late chairman Eric “Erie” Deane, along with Classic Investments Ltd. and Kingsland Estates Ltd. (owned by Classic), “commenced garnishee proceedings” against her.
Justice Worrell heard the proceedings and a month later ordered nearly $700 000, part of it with interest at eight per cent, to be paid to the garnishors out of Knox’s dividend.
She appealed, but counsel for other side asked the court to make Knox pay “security for costs” totalling BDS$1/4 million before that appeal could be heard.
In December that year, acting Jusitce of Appeal Goodridge ruled that security would have to be paid into court totalling $175 000 within 21 days, and until that was done, the appeal against garnishing the Kingsland dividend would not be heard.
Knox appealed to the full Court of Appeal but it ruled that “the learned acting Justice of Appeal correctly applied the principles relevant to an application for security of costs on appeal in exercising her discretion.” However, it allowed Knox to appeal the matter to the CCJ.
In its ruling, the CCJ “set aside” the order of the Court of Appeal for security for costs which had been originally made by the single justice.
Delivering the judgment of the court, Justice Nelson of the CCJ noted that awarding security of costs was “discretionary” on the part of the judge, but that the “exercise of discretion” in this case was “erroneous in law” because it took into account “irrelevant considerations” and failed to do so for relevant ones. (Page 18)
The CCJ’s Justice Saunders added that the “security” payment ordered of $175 000 “was so excessive that in any event it would not have been permitted to stand,” he wrote, adding that the Barbados court had “merely accepted the figures put forward by counsel with no material provided to support or justify those figures.” (Page 20)
In fact, all the court did was order that already existing new rules adopted by the same Barbados courts for calculating such costs be followed. The CCJ reminded the Barbados court that it was now operating under The (Civil Procedure) Rules, 2008, of which Part 65 “quantified” how costs were to be calculated.
The new rules had been brought in to produce “less expensive justice” and to speed up the delivery of justice.
Ironically, that $700 000 plus interest awarded in costs to the victors at the Privy Council would also have been reduced under new rules, noted Justice Saunders. The amount awarded would have been less than $100 000, including accrued interest.
And in the appeal before the court, following the rules in place, the judge noted, the security for costs should have been set at $5 575 instead of $175 000. And while the court did have some discretion to increase that amount, said the judge, “it is wholly inconceivable that the same could yield costs of the magnitude that were ordered in these proceedings.”
So now we will see how the Court of Appeal rules in the present case. And how long that will take. But no matter where the long and winding road that is Kingsland ends, it has already made, and continues to make, a lasting impression on our legal system, for the better.
At least when it came to security for costs, said the CCJ, the process “lacked transparency,” and the amount would seem to have been “arbitrarily” selected, said Justice Saunders.