Law report - setting aside default judgments

Blakeney v Lister [2014] SC (Bda) 7 Civ

The Plaintiff had obtained default judgment against the Defendant nine years previously, due to failure to file and serve a document in breach of a court order that the Plaintiff could enter judgment if the Defendant failed to do so.

As it turned out, the Defendant had filed the document but had neglected to serve it on the Plaintiff. Nothing then was done for many years. In 2013, the Defendant applied to set the judgment aside.

Kawaley CJ found that the judgment was irregular, as the Registrar should have been requested to check the file (or should have checked the file in any event) before issuing judgment. He set the judgment aside. Due to the passage of time, he held that it would now be unjust for the parties to continue with the action, resulting in the case being aborted.

Law report - purchase of a minority shareholding

MFP-2000 LP v Viking Capital Limited [2014] SC (Bda) 6 Com

The Respondents, as holders of more than 95% of the shareholding of a company, had given notice to buy out the shares of the Applicant. Before the purchase took place, the Respondents were no longer the holders of more than 95%. The court was required to resolve the issue of whether this prevented the Respondents from enforcing the purchase.

Hellman J balanced the competing constructions and concluded the more commercially sensible construction was that the Respondents were not required to still hold more than 95% at the time of the purchase.

Law report - security for costs

Galloway v Roth [2013] SC (Bda) 81 Civ

The overseas Petitioner was of very limited means and the Respondent sought security of at least $7,000.

It was held by Hellman J that, having regard to the Consitutional right to a fair hearing, the court must have regard to the amount of security a party might be able to raise.

In the event, $1,000 security was ordered.

Law report - costs in judicial review

The Corporation of Hamilton v The Ombudsman for Bermuda [2014] SC (Bda) 1 Civ

The Corporation had been unsuccessful in its contested application to seek leave to commence judicial review proceedings. The Ombudsman sought her costs of the leave application.

The Ombudsman was seeking her costs in connection with the leave application. Justice Hellman noted that previous Bermudian cases on costs in these circumstances did not appear to have been fully argued and did not refer to relevant authorities such as Mount Cook Land Ltd v Westminster City Council  [2004] CP Rep 12, which is that costs should not be awarded on unsuccessful leave applications other than exceptionally.

However, the judge pointed to exceptional circumstances in this case: the Ombudsman had a constitutional duty to publish her report on the Corporation as soon as she was able. It was reasonable for her to be actively involved in the leave application from the earliest stage in order to pre-empt any court order which might prevent her from publishing her report (at [26]). Furthermore, the Corporation had delayed in applying for leave anyway, and it was relevant for the Ombudsman to raise this delay point at the earliest opportunity (at [27]).

The decision is also notable for pointing to the possibility of interim awards on account of costs (at [53]) on the basis that if the successful party is ultimately found to be entitled to a lesser sum she must refund the difference. This is a potentially useful device for obtaining swift payment of costs in litigation, otherwise costs can take many months after the case itself to be resolved.

Law report - requirement to take a full plea

Cox v the Queen [2014] SC Bda 2 App

The Appellant had been sentenced to a term of imprisonment for a sex offence on the basis of a purported guilty plea in the Magistrates Court. He appealed against his conviction and sentence.

Unfortunately, it appeared that this was based on a mistake. Although the appellant had indicated that he had wished to change his plea from not guilty to guilty, this was not formally accepted by the court. The matter was adjourned and, the next time it came before the court, the court mistakenly proceeded on the basis that he had already pleaded guilty.

Justice Hellman ruled that there had not been any conviction, as the law provides that there can only be a conviction after a plea or finding of guilt (at [21]-[32]). However, he went on to quash the conviction (at [39]). He also ruled that it would not be in the interests of justice to order a re-trial on the basis that he had already spent over a year in prison, the offence was not a particularly serious one, and it would be an ordeal for the 13 year old complainant to have to give evidence again.

Comment - The judge commented that it might appear illogical to quash a conviction that had not actually occurred (at [44]). He also said that he could achieve a similar result by treating it as an application for judicial review and granting public law relief (at [45]).

I think that the judge's indication of a similar result with public law relief points to a solution which would have avoided any logical inconsistency. In my view, the proper analysis is one of an unlawful imprisonment, which could have been dealt with by treating the appeal as an application for habeas corpus or judicial review, and making an order mandating the prisoner's release and a declaration that he had not been convicted.

Law report - security for costs

Galloway v Roth [2013] SC (Bda) 81

The plaintiff lived outside of Bermuda and so the defendant was seeking security for costs in the event that the plaintiff lost the case. The plaintiff was of very limited means such that it would be very difficult for her to pay security for costs of any substantial amount.

Considering the right of both parties to be given a fair hearing, Justice Hellman awarded security of just $1,000

Law report - bring complaints before Employment Tribunal

Fleming v Director of Labour and Training [2013] SC (Bda) 80 Civ

The applicant had submitted a complaint about her employer to the Employment Inspector, in order to determine whether or not it should go before an employment tribunal.

The Inspector refused to forward the complaint to the Tribunal, stating that the employer had not breached the Employment Act.

It was HELD that when an inspector is deciding whether to forward a complaint to the Tribunal, the relevant test is similar to the test for striking out in the Supreme Court as to whether the case has any reasonable prospects of success. It is not for an inspector to make findings of fact and law for himself.

Law report - wrongful dismissal

Woods-Forde v The Bermuda Hospitals Board [2013] SC (Bda) 77 Civ

The Plaintiff worked at the hospital, and was the subject of a disciplinary investigation arising from an allegation concerning a personal dispute with a work colleague. The plaintiff denied the allegation and was later fired for gross misconduct both for the personal dispute itself and for lying about it.

She claimed for wrongful dismissal on the basis that her conduct was not gross misconduct such as to justify firing her. At trial it was conceded by the hospital that the actual allegation that had resulted in an investigation was not itself gross misconduct, and they relied only on the lying about the allegation.

Justice Hellman HELD that the denial was not gross misconduct (at [49]-[54]). The hospital's policies set out the type of dishonesty which it considered to be gross misconduct, which were essentially financial dishonesty.

He awarded her three months' salary in damages, which he said was equivalent to a suitable period to enable her to find another job ([62]-[65]), taking into account her poor health and the difficult labour market.

The plaintiff was also diabetic, so also claimed damages for the loss of her health insurance and having to finance her own overseas medical treatment. The judge agreed that these were damages that could be claimed, as when she entered into employment, the parties could have anticipated that wrongful dismissal would result in her losing the benefit of the health insurance [69]. He calculated the loss by looking at her medical expenditure over the year following her dismissal, and then pro-rating it to the three month period that he found was a reasonable notice [72].

The plaintiff also claimed damages for loss of reputation, as it is more difficult to find a job when you are fired in such circumstances. However, this would have involved the court choosing not to follow the House of Lords case of Addis. Justice Hellman acknowledged that Addis has been criticised but that it is not for him to depart from House of Lords authority at the Supreme Court level ([73]-[76].

Comment - it is surprising that the issue of loss of health insurance has not come up before on termination of employment. This judgment gives a helpful guide as to how such a loss might be calculated in suitable cases.

Child of Bermudian unable to travel?

The Royal Gazette has published an article about the problems of a Bermudian woman getting Bermudian status or a passport for her son, as she only acquired Bermudian status after her son was born.

She says she is unable to travel with her son as she has been unable to obtain travel documents for him.

If the circumstances of the case are as reported, there should be a relatively simple procedure to get a British Overseas Territories (BOT) passport for her son. She could ask the Governor to register him as a BOT citizen, and she would then be able to get a passport for him.

The story reports that the mother was not Bermudian at the time of birth, but the father was. Provided that paternity can be proven then the child should be entitled to Bermudian status from birth.
 I also wonder whether the mother might have an argument for claiming that she was entitled to Bermudian status at birth. She was born overseas, but if her Bermudian dad was domiciled in Bermuda at the time of her birth (which doesn't necessarily mean he was living here) then she would also be Bermudian from birth and so her son would be too.

Even if her son cannot get Bermudian status from birth, he will be deemed to be Bermudian until he turns 22, so it is not too much of a problem right now. The key thing is the passport, which shouldn't be difficult to get.

Law report - naturalisation as British Overseas Territories citizen

Stevens v The Governor and the Deputy Governor [2013] SC (Bda) 75 Civ

The applicant was the husband of a Bermudian who applied to the Governor to be naturalised as a British Overseas Territories citizen on the basis that he met all the requirements, including that he had no restrictions on the period for which he was allowed to remain in Bermuda for.

The Deputy Governor refused the application on the basis that the conditions placed on the husband of a Bermudian in order to continue to enjoy the spouse's rights amounted to such restrictions.

Hellman J held - being guided by 30 years of established nationality law practice in the UK - that restrictions on the period did not have the meaning given to it by the Deputy Governor. He quashed the refusal and ordered the Deputy Governor to reconsider. He noted that there is still discretion in whether or not naturalisation would be granted.

Comment - this is a welcome judgment which helps to clarify when somebody is able to naturalise. Naturalisation enables the person to acquire a Bermudian passport, which is helpful in particular for people from countries who find it difficult to obtain visas when travelling. It can also simplify the process of obtaining Bermudian status for non-Commonwealth citizens. Naturalised BOT citizens are also deemed to belong to Bermuda under the Constitution, although it is unclear what effect this actually has.

This judgment might affect other people who had their naturalisation applications refused. If an application is refused, the reasons must be communicated to the applicant, and the refusal must be a reasonable decision.

Law report - tariffs for life sentences

I was asked by the Royal Gazette to give an overview of today's Privy Council judgment concerning parole for life sentences. Below is what I passed on to the newspaper:

Parliament passed a law on tariffs for life sentences, which said that a murderer shall not be eligible for release until they have served at least 15 years in prison, and a premeditated murderer shall not be eligible for release until they have served 25 years.

The Bermuda Court of Appeal had said these tariffs were void because tariffs are a matter for the trial judge under the Bermuda Constitution. As they were void, the trial judge could decide on a higher or lower tariff, depending on the circumstances of the case.

However, the Privy Council reached the conclusion that the 15/25 year limits were in fact setting maximum periods – i.e. that parliament meant eligibility for parole could be set for any period up until 15/25 years.

This means that prisoners currently serving life sentences with longer tariffs will be able to get their tariffs capped at 15 or 25 years. It is stressed that this does not mean murderers will automatically go free after 15 or 25 years – it is still a matter for the parole board as to whether they should be released.

It is also stressed that Parliament could get around the Privy Council judgment by simply removing the maximum periods retrospectively. Although the Bermuda Constitution prevents penalties being increased retrospectively, there are good legal precedents that the period for parole eligibility is not a penalty for that purpose.

If that is right, then the Privy Council judgment might turn out to be a storm in a teacup.

For reference, the most relevant parts of the judgment are paras 4-5 and 14-16.

For further reference, the cases on parole eligibility are Hogben v the United Kingdom (European Court of Human Rights) and R v R [2003] 4 All ER 882 (English Court of Appeal). There are probably others too.

It'll be very interesting to see how Parliament implements damage control so as to ensure judges are able to set longer tariffs.

Law report - serving parties outside of Bermuda in trust proceedings

In the matter of the Hanover Trust [2013] SC (Bda) 38 Civ

The Chief Justice clarified an issue regarding service of court proceedings on overseas parties to a trust action. He held that in trust proceedings concerning a Bermuda trust or where the trust property was in Bermuda, it was not necessary to obtain the leave of the court to do this, as the court had clear jurisdiction to hear such applications [143]-[15]. Leave would only be required if the overseas party might potentially challenge jurisdiction to hear the dispute or whether Bermuda is the most convenient forum to hear it [13].

Law report - court and collection fees

Acorn Services Ltd v Dill [2013] SC (Bda) 33 App

The Plaintiff had been awarded judgment for rent arrears, including collection and legal fees attainable under the lease. The Plaintiff had appealed on the grounds that the Magistrate had not awarded the full collection fees under the lease.

Kawaley CJ held that the collection fees were a contractual claim which the Plaintiff was entitled to. The clause in the contract did not put a penalty on the Defendant, but merely reflected the costs that the Plaintiff had suffered in order to collect on the debt [10]-[13].

Law report - stays of proceedings

In the matter of an application for information about a trust [2013] SC (Bda) 45 App

Justice Hellman, sitting as a single judge of the Court of Appeal, had refused a stay of an order by the Chief Justice for the applicant to disclose accounting information to the respondents, pending appeal to the Court of Appeal.

The applicant then re-applyied for Justice Hellman to stay the matter only until the full Court of Appeal could consider the matter in a further month's time.

Hellman J held that he did have the authority to do this [13]. He decided that, as the full Court of Appeal would be able to consider the matter in as little as a month, it tipped the balance in staying the order for that short period [20].

Law report - two sets of costs and judicial review

Kentucky Fried Chicken (Bermuda) Limited v Minister of Economy, Trade & Industry [2013] SC (Bda) 35 Civ

This judgment concerned what happens when an applicant has failed to obtain the relief they were seeking in judicial review proceedings where there is more than one respondent.

Kawaley CJ noted that this was strangely not something which had been raised before in a considered judgment in Bermuda [5].

The general position is that only one set of costs would be awarded as an applicant should not have to pay for duplication of effort. There is an exception when a second respondent has a separate interest on an issue which is not dealt with by the first respondent.

The Chief Justice took the route of allowing costs to both respondents, but only one set of costs for each issue, depending on whether the issue was one properly for the Minister or for the BIU to respond to, so as to avoid duplication of costs [7]-[10].

The Chief Justice indicated that, in future, the proper time to raise the issue of paying two sets of costs is early in the proceedings, in order to allow the parties to focus on who should play an active role in the proceedings [11].

Law Report - Loophole in the Criminal Appeal Rules?

Brangman v Raynor [2013] SC (Bda) 23 App

In his appeal against sentence, Brangman received a small reduction in his sentence to bring it into line with other sentences for sex offences handed down by the Magistrates' Court.

An interesting issue arose, however, as to whether appellants were able to exploit a provision in the law to get an automatic extension of bail when they appeal.

Kawaley CJ said that sections 11 & 12 of the Criminal Appeal Act appear to allow that if an appeal against conviction is filed before sentencing takes place, the proceedings are automatically stayed and so if the appellant is already on bail he cannot be remanded until the appeal is determined [41].

That appeared to be what had happened in the present case, where the appellant had managed to cleverly get his appeal in between the conviction being read out and the sentencing, presumably by serving it personally on the Senior Magistrate. Kawaley CJ said he would welcome the views of the Court of Appeal on this issue.

Comment - It's also noted that it requires the lawyers to not only get the appeal form drafted in time but to find and serve the Senior Magistrate. If the Senior Magistrate is sitting in Court, it would presumably be contempt of court to approach the bench to serve him without his permission. That might be a practical way for the Senior Magistrate to postpone an appeal until bail and other important issues have been dealt with.

Law Report - court appointment of third arbitrator

Carnival Corporation & ors. v Estibeiro [2013] SC (Bda) 20 Civ

The parties were involved in an arbitration under Bermuda law. The Respondent had applied to the Florida Court for the appointment of a third arbitrator. The Applicants had applied to the Bermuda Supreme Court for the same, submitting that the Bermuda Court was the appropriate place to do this.

Kawaley CJ agreed that the Bermuda Court was the appropriate place to seek relief in a dispute concerning a Bermuda arbitration. He appointed Geoffrey Bell QC, who was of a higher order of seniority than those suggested by the applicants, which should help to allay the concerns of the respondent as to the third arbitrator's neutrality.

Law Report - disclosure of information - Tax Information Exchange Agreements

Bunge Limited v The Minister of Finance [2013] SC (Bda) Civ

The Applicant was challenging the Minister's refusal to provide a copy of a request for information by Argentina under an Agreemnet for the Exchange of Information Relating to Taxes.

Hellman J notedthat the International Co-operation (Tax Information Exchange Agreements) Act 2005 was materially similar to the USA - Bermuda Tax Convention Act 1986 for these purposes, although the 2005 Act did not contain a provision that the notice requesting the information should contain the pertinent details of the initial Request [15].

He held fairness and justice required that an applicant was entitled to be satisfied that a request fulfilled the statutory requirements. The right to disclosure of the request is not unfetted. Confidential or sensitive information, for example information prejudicial to the investigation, could be redacted [38]. If necessary, the Court could review the unredacted request in the absence of the applicant to determine whether or not it is valid [41].

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