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THE REPUBLIC OF TRINIDAD AND TOBAGO

IN THE HIGH COURT OF JUSTICE

Claim No. CV2015-01172

BETWEEN

GEORGE GONZALES ENTERTAINMENT SERVICES

Claimant

AND

SANDBOX HD ENTERTAINMENT LIMITED

Defendant/ Ancillary Claimant

KEVAN GIBBS

Ancillary Defendant

Before the Honourable Mr. Justice Robin N. Mohammed

Date of Delivery: 20th February, 2019

Appearances:

Ms. Tamara J. Sylvester for the Claimant

Ms. Dawn Gillian Seecharan for the Defendant/Ancillary Claimant

Ms Rhea Libert for the Ancillary Defendant

JUDGMENT

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I. Background:

[1] The Claimant has claimed the sum of $305,655.00 as outstanding monies pursuant to

three oral agreements entered into between the parties from 2009 to 2011. On the

Claimant’s case, the existence of these agreements are apparent from the various

correspondence exhibited in its pleadings.

[2] The Defendant, in response, denies all liability. It avers that its current Director, Mr

Amede Wilson, only began his directorship on the 30th July, 2011 and as such, was a

stranger to the oral agreements, which all occurred prior to that date. Accordingly, the

Defendant Company (i) made no admissions with respect to the existence or

enforceability of the alleged oral agreements and (ii) averred that any liability for same

should be placed on its previous Director, Mr Kevan Gibbs, who was a Director of the

Defendant Company from 2005- 2011 and to whom all correspondence relating to the

agreements were addressed.

Thus, it was the Defendant Company’s intention to join Mr Gibbs as an Ancillary

Defendant to these proceedings. In any event, they pleaded that the last invoice sent by

the Claimant was on the 9th March, 2011 and thus, by the 14th April, 2015 when this Claim

was filed, these proceedings had become statute barred. (Section 3 (a) of the Limitations

of Certain Actions Act, Chap 7:09.)

[3] In the Ancillary Claim brought against Mr Gibbs, the Defendant Company pleaded that,

upon Mr Amede Wilson’s purchase of the Defendant Company from Mr Gibbs, Mr Gibbs

had provided Mr Wilson with a list of all outstanding debts of the Defendant Company

as follows:

i. George Lee Cock: $20,000.00

ii. DJ Might Krush: $10,000.00

iii. Ricki Ragoonanan: $500,000.00

iv. Keon Warner: $250,000.00

v. Penny Savers: $175,000.00

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[4] The list therefore, did not include the purported debt to the Claimant. As a condition to

the purchase agreement, Mr Wilson agreed as consideration, to be responsible for the

settling of all the Defendant Company’s debts. Thus, having received no notice of any

debt to the Claimant in the said list, the Defendant Company maintained that it is a

stranger to the Claim that any liability thereunder should be placed on the Ancillary

Defendant.

[5] Mr Gibbs sought to abdicate responsibility for this debt by making two essential

averments (i) that he was not the sole director of the Defendant Company from 2005 to

2011 but rather, co-owned same along with Mr Chenier Belgrave. Thus, it was not correct

to say that he alone sold the company to Mr Wilson; and (ii) pursuant to the doctrine of

separate legal personality, it is the Defendant Company and not himself who should be

liable for this debt as he was not, in his personal capacity, a party to any of the

aforementioned oral agreements.

He also sought to aver that he had indeed, informed Mr Wilson of the debt to the Claimant

in 2011 and further, that such debt was included in the list, which he provided to Mr

Wilson upon the sale of the Defendant Company. However, in this Court’s opinion, Mr

Gibbs has failed to identify in his pleading the subject debt on the list provided1.

[6] The Claimant responded to Mr Gibbs’ defence by contending that its managing director,

Mr George Gonzales, dealt directly with Mr Gibbs and Mr Belgrave in their capacity as

the Defendant’s Directors, when entering into the 2009, 2010 and 2011 oral agreements.

Further, the terms of these oral agreements were contained in quotations dated the 23rd

July, 2009, the 13th July, 2010 and the 6th July, 2011, which, although not established in

writing, were confirmed orally by Mr Belgrave and Mr Gibbs. Lastly, the Claimant

contended that it was within the limitation period for the filing of this action and thus,

this Claim was not statute barred.

II. Issues:

(i) Whether this Claim is statute barred?

1 See para 20 of Mr Gibbs’ Defence to the Ancillary Claim filed on the 15th December, 2015

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a. If so, then that is dispositive of the matter.

(ii) If not, then whether the Claimant has the locus to bring this Claim?

(iii) If so, then whether the parties entered into the oral agreements in 2009, 2010 and

2011?

(iv) If so, then whether the Defendant Company is indebted to the Claimant?

(v) If so, then whether the Ancillary Defendant is liable to indemnify the Defendant

Company for the Claimant’s debt?

a. Whether Mr Gibbs agreed to inform Mr Wilson of the Claimant’s debt?

b. If so, whether Mr Gibbs breached that term of the agreement?

c. If so, whether the Court can lift the corporate veil to find the Ancillary

Defendant liable?

(vi) What is the amount of the Claimant’s debt?

III. Law & Analysis:

Whether this Claim is statute barred?

[7] Section 3 (1) of the Limitations of Certain Actions Act, Chap 7:09 prescribes that any

action in contract must be brought before the Court within 4 years from the date that the

cause of action accrued:

1) “The following actions shall not be brought after the expiry of four years from the

date on which the cause of action accrued, that is to say:

a) actions founded on contract (other than a contract made by deed)

or quasi-contract or in tort;

b) actions to enforce the award of an arbitrator given under an

arbitration agreement (other than an agreement made by deed); or

c) actions to recover any sum recoverable by virtue of any enactment.”

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[8] There is no doubt that this provision applies to the case at bar as it involves an action

founded on contract. The material part of this provision, however, is the fact that time

only begins to run from the date that the cause of action accrued. Thus, for this claim to

be statute barred, the cause of action would have had to accrue prior to the 14th April,

2011, which would cause 4 years to have lapsed by the 14th April, 2015 when the Claim

was filed.

[9] What the Defendant seems to have misunderstood is that the cause of action in this matter

is not simply the date that the last invoice was sent. Rather, it is the date that the breach

occurred i.e. the date on which the Defendant Company was supposed to pay the monies

and failed to do so. In this light, the Defendant, bearing the burden of proof on this issue,

has failed to particularize the date at which the cause of action accrued. Nevertheless,

having admitted that it received the quotation of the 9th March, 2011 as exhibited at G of

the Amended Statement of Case, the Defendant has accepted its contents and thus, have

agreed they contracted with the Claimant for the Great Fete 2011, which ran from the

27th to the 31st July, 2011.

Thus, unless expressly agreed otherwise, which is not apparent from the documents, it is

more probable than not that the due date for payment on this agreement would not have

arisen until after the 31st July, 2011 when the event would have concluded. Accordingly,

in the absence of any evidence to the contrary, this Claim filed on the 14th April, 2015

would be well within the 4 years limitation period— having been filed prior to the 31st

July, 2015.

[10] I therefore find that the Defendant has failed to prove that the Claim herein is statute

barred.

Whether the Claimant has the locus to bring this claim:

[11] This issue of law was advanced by the Defendant in its submissions. Essentially, counsel

argued that there are three different entities that act on behalf of the Claimant—George

Gonzales Entertainment Services Limited; (ii) George Gonzales Entertainment; and (iii)

George Gonzales Entertainment Limited. Intituled on the Claim, was “George Gonzales

Entertainment”, which, on the Defendant’s submission, was a company that had since

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been wound up. Thus, counsel submitted that the Claimant Company is not properly

constituted before the Court. Further, should the Court find for the Claimant, the

Defendant and/or Ancillary Defendant would not know which of the three entities is

entitled to the judgment.

[12] The Claimant Company seemed to have missed this issue completely in its Reply. The

fact remains that the company intituled on the Amended Claim is not the same company

in the Certificate of Incorporation produced by the Claimant in its pleading. However,

the Court notes that thereafter, both of the Claimant’s witnesses refer to George Gonzales

Entertainment Services Limited in their evidence-in-chief, which is also the company

named on the certificate of incorporation. Thus, it is presumed that the intitulation on the

Amended Claim was an error. Nevertheless, it is one which the Claimant should not have

made and which it should have attempted to rectify by way of a re-amended pleading or

otherwise.

[13] At the same time, however, the Court notes that counsel for the Defendant submitted that

the Claimant Company as named on the Amended Claim had been wound up and thus

was not properly before the Court. However, it failed to plead this fact, and moreover,

provided no such evidence of such winding up in its witness statement.

[14] At trial, oddly enough, Counsel for the Defendant Company, Ms Seecharan, opted not to

question Mr Gonzales about the issue of the Claimant Company’s locus standi. Rather, it

was counsel for the ancillary Defendant, Ms Libert, who put questions to Mr Gonzales

about the failure to file annual returns etc.2 In fact, it was again Ms Libert who cross

examined Natalie Gonzales about the discrepancy between documents annexed at GG1

and GG2 of Mr Gonzales’ witness statement.

GG1 was stated as being the Certificate of Incorporation for the Claimant Company,

which was an exact replica of annexure “K” of the Amended Statement of Case, and GG2,

was labelled as the Notice of Change of Directors for the Claimant Company. Ms Libert

put to Ms Gonzales that the company number listed on annexure GG1 was different from

that listed on annexure GG2. In fact, on GG2, the company number switched from G

2 NOE 16th November, 2016 Page 30, Lines 10 - 31

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2373(95) to S 4363(95). The implication being that there exists two different companies

representing the Claimant.

However, this mix up was nothing more than an oversight on the part of the Claimant’s

attorney as the document annexed at GG2 was really a Notice of Change of Directors for

the Defendant Company, which explains the different company number. Considering that

this was the sum of the cross examination on this issue, it failed to convince this Court

that the Claimant Company had no locus to bring this Claim.

[15] I therefore find that the Claimant Company has the necessary locus to bring this action

against the Defendant Company.

Whether the parties entered into the oral agreements in 2009, 2010 and 2011:

[16] The Claimant particularized the three purported oral agreements with the Defendant

Company in July, 2009, July 2010 and March, 2011. However, due to the longstanding

relationship between them, it pleaded that the parties’ operated in a very informal manner

and thus, there exists no written agreement nor any proper records of its terms.

[17] This was confirmed by Mr Gonzales in his witness statement where he expressed that all

negotiations with respect to the agreements were conducted by telephone. He also stated

that the Defendant was never required to confirm the agreements in writing.3 Ms

Gonzales, his sister and 2nd Director of the Claimant, corroborated that negotiations for

these agreements were indeed verbal.

[18] In response, the Defendant Company has sought to deny the existence of any of these

three alleged oral agreements and states that the quotations sent by the Claimant were

never confirmed. This was not surprising considering that the current Director of the

Defendant Company, Mr Amede Wilson, was not aware of any of the company’s dealings

prior to his appointment in 2011. Acknowledgement of these oral agreements, if any,

would therefore be contained in the Defence of the Ancillary Defendant, Mr Kevan

Gibbs, who pleaded that he had been one of the two Directors of the Defendant Company

3 Para 9

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prior to Mr Wilson’s appointment in 20114. However, Mr Gibbs pleaded that he “was not

party to the alleged agreements with the substantive Claimant.”5

[19] In his witness statement, Mr Gibbs sought to explain his pleading by relying on the

doctrine of the corporate veil to separate himself from the Defendant Company. Thus, he

stated that all works done by Mr Gonzales was on behalf of the Defendant Company. He

stated that prior to the incorporation of the Defendant Company, Mr Gonzales dealt with

him personally. As a result, once incorporated, Mr Gibbs maintained that he was Mr

Gonzales main liaison and therefore, all quotations were addressed to him on the

Defendant Company’s behalf.

Thereafter, Mr Gibbs’ evidence-in-chief, coincided on some material facts with that of

the Claimant. Mr Gibbs stated that he and Mr Gonzales discussed prices for Mr Gonzales’

services in informal ways and would “come to an agreement that way”. To be specific,

he stated that…

“On several occasions between 2008 to 2010, I would receive an email usually

between mid to late July with a quotation from George. Several times, those

quotations would not reflect the agreements that we would come to in the prior

weeks….Even when I would discuss outstanding balances with George, which were

generally paid without invoices or receipts in cash, George would say to us, do not

worry about Natalie.”

[20] Mr Gibbs pleaded case and his evidence-in-chief both suggested that the parties did enter

into oral agreements in 2009 to 2011. His defence therefore, seemed to be that those

agreements were between the Claimant and the Defendant Company and not with him in

his personal capacity. In fact, the existence of these agreements are confirmed by Mr

Belgrave’s evidence, who was the second Director of the Defendant Company at the time.

He stated that he paid Mr Gonzales’ men $14,000.00 because Mr Gonzales called him

and asked him to ensure that his men are paid. He also gave evidence that he recalled a

4 See para 5 of the ancillary defendant defence 5 Para 18

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conversation with Mr Gonzales in 2010 on the issue of discrepancies in the invoices

submitted by his sister, Natalie Gonzales.

[21] None of the witnesses at trial gave any evidence to suggest that these oral agreements did

not exist. In fact, Mr Gibbs admitted under cross-examination by counsel for the

Claimant, Ms Sylvester, that from 2008 to 2011, he entered into agreements with George,

the Director of the Claimant, for him to provide services6.

[22] Thus, I find that the parties indeed entered into the alleged oral agreements in 2009, 2010

and 2011.

Whether the Defendant Company is indebted to the Claimant Company:

[23] This issue is pivotal to the Claim and was one that was heavily disputed amongst all three

parties on their pleadings.

[24] The Defendant Company essentially pleaded that all three of the quotations sent by the

Claimant pursuant to the three oral agreements were never confirmed by the Defendant

Company. Thus, as each of the quotations ended with the line “please reply with a

confirmation,” the Claimant has failed to prove that the monies stated in them are indeed

owed by the Defendant Company to the Claimant.

[25] Mr Gibbs’s Defence was simply that he, in his personal capacity, was not a party to any

of the three oral agreements in 2009, 2010 and 2011. Thus, all liability, if any, should be

placed on the Defendant Company. In any event, he made mention of the agreement for

the sale of a share/interest in the Defendant Company to Mr Wilson in 2011 and stated

that as consideration for the purchase, Mr Wilson agreed to settle all debts of the

Defendant Company. Thus, as part of the terms of that agreement, he pleaded that he

submitted a list of the company’s debts to Mr Wilson which included the Claimant’s debt.

Therefore, based on Mr Gibbs’ pleaded case, it is an agreed fact that a debt was owed to

the Claimant by the Defendant Company.

[26] Mr Gonzales, for the Claimant Company, added in his witness statement that the

Defendant was required to pay the Claimant for its services at the end of the event, usually

6 NOE of the 16th November, 2016 Page 31, Lines 23 - 26

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on the last night or the day after. He specifically mentioned that Mr Gibbs and Mr

Belgrave were the Defendant Company’s former agents and thus, maintained that they,

at all times, entered into the contracts on the Defendant Company’s behalf. In fact, his

evidence was that he had all discussions with Mr Gibbs as the Defendant Company’s

Managing Director and that he received oral confirmation of the quotations in 2009, 2010

and 2011. Further, he gave specifics about the monies to be paid and the debt owed under

each agreement as follows:

1) 2009: Cost- $280,000.000; Amount paid- $160,000.00; Amount owed-

$120,000.00;

2) 2010: Cost- $169,500.00 + $120,000.00 (owed); Amount paid- $111,615.00;

Amount owed: $177,885.00;

3) 2011: Cost $124,800.00 + $177,885.00 (balance owed); Amount paid- $0.000;

Amount owed- $302,685.00.

[27] Mr Gibbs, in his evidence-in-chief, maintained that there was no term in the agreement

for sale of the Defendant Company to Mr Wilson that stated that he would be personally

liable for the Defendant Company’s debts7.

However, he introduced new facts in his witness statement as follows: He alluded to a

meeting among himself, Mr Belgrave and Mr Gonzales at his home sometime after the

2010 event failed. At this meeting, he said that it was explained to Mr Gonzales that the

Defendant Company was on the verge of collapse and thus, could not pay the debt. He

then stated:

“We told George that if he forgave the Company’s debts, we would guarantee him

the contract for his services in 2011. If not, and he tried to call in his debt, we would

have to file for bankruptcy. George agreed to that, and said that he wanted the

event to proceed…”

Thus, it now appeared to be his case that all debts from the 2010 event and before had been

forgiven by Mr Gonzales.

7 Para 24

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The Court notes, however, that this fact, was not at all mentioned in the Ancillary Defence.

[28] Mr Belgrave corroborated Mr Gibbs’ evidence about the meeting with Mr Gonzales after

the 2010 event in which Mr Gonzales agreed to forgive the Defendant Company’s debts.

Further, he agreed that they, Mr Gibbs and himself, informed Mr Wilson about the

Defendant Company’s debts in a list sent by email on the 20th May, 2012. More

importantly, he stated that it was no part of the agreement for sale that any liability would

be ascribed to himself or Mr Gibbs for the Defendant’s debts. Thus, he maintained that

any liability should be placed on Mr Wilson for failing to pay the Claimant’s Company’s

debt.8

[29] From the party’s evidence, especially that of the Ancillary Defendant and its

corroborating witness, it is abundantly clear that a debt is owed to the Claimant Company.

In fact, at trial, Mr Gibbs gave evidence that he has never denied the amount claimed in

the Claimant’s quotation dated the 6th July, 2011. Moreover, he stated that he accepts that

there remained an outstanding balance owed to Mr Gonzales even after he paid him the

$80,000.00 in cash.9

An excerpt of the cross-examination by Ms Sylvester of Mr Gibbs on this issue is set out

below:

“Q: and you would agree with me that at no point in that statement, do you deny

the amounts received in that quote dated—do you even—nowhere in that statement

did you mention the quotation dated the 6th July, 2011 attached to the email?

A: No I do not

Q: and at nowhere in that statement do you deny that George performed the

services

A: No I do not

Q: in the quotation of the 6th July 2011 do you in that statement say anything?

8 Para 30 9 NOE 17TH November, 2016 page 41

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A: No

…

Q: In fact, at paragraph 20 your evidence is that you gave George $80,000.00,

correct?

A: yes, in cash

Q: for those services that he performed?

A: yes

Q: and then you indicated to George… that that was all that you had?

A: at the time yes

Q: so you also accept that that suggested that you owed George more money?

A: yes.”

[30] The existence of the Defendant’s debt to the Claimant is confirmed by Mr Belgrave, who

stated in the witness box that the debt owed to the Claimant was “…one of the bigger

debts…” that the Defendant Company had incurred.10 Moreover, he stated that although

he wasn’t privy to the total debt owed, it was “for sure” more than the $80,000.00 paid

to Mr Gonzales.11

[31] I therefore find that a debt is owed to the Claimant. The amount and the liability for that

debt will now be analysed.

Whether the Ancillary Defendant is liable to indemnify the Defendant Company for the

Claimant’s debt:

[32] Each of the Defendants sought to assign liability on the other for the Claimant’s debt.

10 Page 54 lines, 7 - 10 11 Page 48, lines 10 - 14

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[33] Mr Wilson, maintained that Mr Gibbs, as the previous Director, gave him a list of the

Defendant Company’s debts as was required under their agreement for sale, yet failed to

disclose the subject debt. Thus, any liability should fall on the Ancillary Defendant.

[34] Mr Gibbs, in response, has admitted that a debt is owed to the Claimant but states that

(i) he disclosed the debt to Mr Wilson and (ii) that he is not personally liable for any debts

of the Defendant Company based, presumably, on the doctrine of separate legal

personality.

[35] Therefore, on one hand, there is an issue of fact to be determined i.e. whether Mr Gibbs

disclosed the Claimant’s debt to Mr Wilson upon the sale of the Defendant Company and

on the other, and issue of law i.e. whether the Ancillary Defendant is liable in his personal

capacity for the debt.

Whether the Ancillary Defendant disclosed the Claimant’s debt to Mr Wilson:

[36] Within this issue there is a sub-issue that must first be decided, i.e. whether Mr Gibbs

agreed/contracted to disclose to Mr Wilson, the debt owed to the Claimant upon the

sale of his share in the Defendant Company.

[37] Mr Wilson raised the existence of the agreement between himself and Mr Gibbs for the

purchase of the Defendant Company from Mr Gibbs in his Ancillary Claim. He stated

that at the time of purchase, Mr Gibbs provided him with a list of all outstanding debts

of the Defendant Company as follows:

1) George Lee Cock from Radio Tamarind $20,000.00;

2) DJ Might Krush $10,000.00;

3) Ricki Ragoonanan $500,000.00;

4) Keon Warner $25,000.00;

5) Penny Savers $175,000.00

Further, he averred that these debts were settled by him “as agreed consideration” for

the purchase of the company and that, as is evident from the list, the debt to the Claimant

was not included.

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[38] Mr Gibbs’ pleading on this issue was largely the same. However, he stated that the

agreement for the purchase of the Defendant Company was made among Mr Wilson,

himself and Mr Belgrave. He specified that the scope of the agreement included terms as

to (i) the beneficial ownership of the company; (ii) how the ownership would be divided

between Mr Wilson and Mr Belgrave; and (iii) that Mr Gibbs would resign.

The email containing the terms of the share purchase agreement dated the 2nd May, 2012

was supposed to be annexed. However, it was clear that the attached email did not reflect

those terms nor did it discuss the terms of the share purchase agreement. Rather, the

relevant email of the 2nd May, 2012 was disclosed in Mr Gibbs’ witness statement as

annexure “C”. It expressly discusses the “key points that should be reflected in the

contract” and states:

“Sandbox will be owned by Amede and Chenier with the percentage being Amede

80% Chenier 20% (so there would be a partnership contract and a shareholders

agreement). I think there should be a separate contract between Chenier and Kevan

on how the 20% is split between themselves.

All past outstanding debts shall be paid as per agreement between Amede and

Chenier as to who pays who (these will have to be identified and signed off)…”

[39] As is seen from this email, no mention was made of any term of the agreement whereby

Mr Gibbs would provide a list of debts to Mr Wilson. Rather, Mr Gibbs, in his Ancillary

Defence, pleaded that he accepts that he provided a list of outstanding debts of the

Defendant Company to Mr Wilson. He then stated that the debt owed to the Claimant was

disclosed verbally in negotiations in 2011, but that the debt is contained in the list as

attached.

[40] This pleading was a bit confusing considering that the attached list made no mention of

the debt owed to the Claimant. However, although Mr Gibbs has conceded that he

provided a list of debts to Mr Wilson, he did not admit that such provision was a

requirement under the share purchase agreement as Mr Wilson seemed to be suggesting

in his pleaded case.

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In fact, Mr Wilson’s case was altered in his witness statement where he simply stated that

prior to his appointment to Director of the Defendant Company, he asked Mr Gibbs to

provide him with a list of debts owed by the Defendant Company.12 Thus, he was no

longer giving evidence that the disclosure of the company’s debts was a term of the share

purchase agreement.

[41] Similar contradictions occurred on Mr Gibbs case on the issue. In his evidence-in-chief,

he was now stating that there was a meeting with Mr Wilson in which Mr Wilson stated

he would take over management of the event and that “…he wanted a clear indication as

to all the money owed by the company.” Thereafter, his evidence was that “we discussed

all the monies owed, including the debt owed to Mr Gonzales.”13

While not expressly stated, his evidence now suggested that the provision of the debts

would have been part of the negotiations for the sale of his shares and thus, likely to be

one of the stipulated terms of the share purchase agreement as it is clear that Mr Wilson

intended to rely on same.

[42] Clarification on the terms of the share purchase agreement was only given in Mr

Belgrave’s witness statement. Mr Belgrave stated as follows at paragraph 24 of this

witness statement:

“…We also told Mr Wilson about the debts owed by the company. We eventually

sent him a list of all the debts by email dated May 20th 2012 with a full listing of

debts owed, plus money borrowed that needed to get paid back. Eventually we

agreed to an eighty - twenty split…Mr Wilson in turn agreed to pay off the debts

owed by the company as part of his purchase of the eighty percent of the

Company.”

Thus, Mr Belgrave expressly stated that the negotiations for the share purchase

culminated in an agreement—a material term of which involved Mr Wilson paying off

the Defendant Company’s debts. Most importantly, Mr Belgrave admitted that the list of

12 Paras 10 & 11 of Mr Wilson’s witness statement 13 Paras 22 & 23 of Mr Gibbs’ witness statement

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debts contained in the excel spreadsheet of the email dated the 20th May, 2012 was a “full

listing of the debts” of the Defendant Company.

[43] At trial, Mr Wilson’s evidence centred on whether he was indeed provided with a list of

all the company’s debts. He however admitted that the list which he had stated Mr Gibbs

provided to him was not actually a written list. Rather, he stated that they “…sat in a

meeting and he disclosed the list of people that were owed, which I wrote down on a piece

of paper; well I had already wrote most of the people owed.”

More importantly, Mr Wilson admitted that at the time of preparing his witness statement,

he did not have this list of debts which he wrote down with him and thus, it was correct

to say that the list stated in his witness statement was from his memory.14 Despite his

reliance on his memory to produce the list, Mr Wilson maintained at trial that it was not

possible that there may have been names of creditors given to him by Mr Gibbs that he

may have forgotten to include on the list.

[44] Mr Belgrave also referred to an extended negotiation period for the share purchase from

2010 to 2012. He agreed that part of these negotiations was for the apportionment of the

Defendant Company’s debts. In fact, he stated that the negotiations “started off with

that.”15

This evidence suggests to this Court that the disclosure of the Defendant Company’s debt

was part of the negotiations between the relevant parties and thus, could be considered a

term of any share purchase agreement.

I am more convinced of this standpoint when Mr Belgrave’s other evidence is considered.

Under cross-examination from Ms Seecharan, he stated that the debt owed to the

Claimant was one of the bigger debts of the Defendant Company and therefore, was

considered to be an obvious debt. In fact he stated “…if we had any reason to sell, that

would have been one of the bigger reasons.”16

14 NOE 16th November, 2016, page 64 - 65 15 NOE 17th November, 2016, page 53 16 NOE 17th November, 2016 page 54

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He then proceeded to admit that the relevant parties discussed in their negotiations how

all of the Company’s debt should be dealt with.

Notwithstanding the above, despite claiming that all debts were discussed, when asked

by Ms Seecharan to respond to the Defendant’s case that neither he nor Mr Gibbs ever

disclosed the Claimant’s debt to Mr Wilson, Mr Belgrave gave a very tentative response:

“Well, it’s not possible to deny it---well if he says so. But reality is that certain

debts are obvious so we would have listed it first.”17

In fact, as it pertains to the issue of whether either of the Defendant Company’s former

Directors ever informed Mr Wilson of the debt owed to the Claimant, their responses

were not at all convincing.

Mr Gibb’s evidence on this issue was as follows:

“I cannot a hundred percent say if we actually told Amede about George

Gonzales but to the best of my knowledge, we told him about the debts owed”.18

[45] I am, therefore, of the considered opinion that it was a material term of the negotiations

as well as the agreement for sale that Mr Gibbs would be required to provide a list of the

company’s debts to Mr Wilson, which Mr Wilson, as consideration for the purchase of

his shares, would settle.

[46] Thus, (i) the inability of either of these former Directors to say with any certainty that

they fulfilled this material term by disclosing the debt owed to the Claimant; and (ii) the

lack of any written evidence showing that they did indeed disclose the debt to Mr Wilson,

suggest to this Court that it is more probable than not that the debt was never disclosed

to Mr Wilson. Such a finding means that Mr Gibbs had breached a term of the share

purchase agreement with Mr Wilson.

[47] Whether or not this finding makes Mr Gibbs personally liable to indemnify Mr Wilson is

the crucial legal issue to be discussed below.

17 Page 54 lines 1 - 4 18 NOE 17th November, 2016 page 26

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Whether the Ancillary Defendant is personally liable for the Claimant’s debt:

[48] Mr Gibbs wishes to rely on the doctrine of the “corporate veil” to contend that even if the

debt is owed to the Claimant, that debt must fall with the Defendant Company because it

is a separate legal entity.

[49] The law on agency as set out by Counsel for the Claimant, Ms Sylvester, is both relevant

and accurate. It states, essentially, that it is an established presumption that Mr Gibbs, as

a Director of the Defendant Company, acts as an agent of the company on all contracts.

Halsbury’s Laws of England Volume 1 (2017) states as follows on the issue of the right

and liabilities of a principal and agent:

As a general rule, any contract made by an agent with the authority of his principal

may be enforced by or against the principal where his name or existence was

disclosed to the other contracting party at the time when the contract was made.

Where the principal is undisclosed, the authorised contract of the agent may also

as a general rule be enforced by or against the principal. If, however, the agent

contracts in such terms as to imply that he is the real and only principal, evidence

to contradict the terms of the contract will not be admitted. Whether he has

contracted in such terms or not depends upon the construction of the particular

contract. Where an agent contracts in his own name but not in terms which are

consistent only with his having done so as principal, oral evidence may be admitted

to prove the identity of the principal.

Where a person makes a contract in his own name without disclosing either the

name or the existence of a principal, he is personally liable on the contract to the

other contracting party, though he may be in fact acting on a principal's behalf.

He will continue to be liable even after the discovery of the agency by the other

party, unless and until there has been an unequivocal election by the other

contracting party to look to the principal alone... Where the contract is not written

Page 19 of 25

but oral, the question whether the agent is personally liable must be determined

in the context of the background against which the contract was made.”19

[50] Thus, it appears that the general rule is that the principal or, in this case, the Defendant

Company, would be liable under any agreement entered into by Mr Gibbs as its agent if

done with the company’s ostensible or actual authority.

Thus, to ascribe liability to Mr Gibbs, Mr Wilson would have to show that either: (i) He

did not know that Mr Gibbs was acting as an agent of the Defendant Company; or (ii)

that Mr Gibbs did not disclose the existence of the Defendant Company; and/or (iii) that

Mr Gibbs contracted with him in his personal capacity.

Further, considering that the share purchase agreement was oral, liability must be

determined from the contextual background.

[51] Options (i) and (ii) will not be available to Mr Wilson as it is undisputed that he knew Mr

Gibbs was the Director of the Defendant Company when he entered into negotiations for

the share purchase agreement.

[52] As to option (iii), Mr Wilson’s pleaded case was that he had purchased the Defendant

Company from Mr Gibbs. However, in his evidence-in-chief, he changed and stated that

he had purchased Mr Gibbs’ shares in the Defendant Company. Mr Gibbs, in his Defence,

agreed that the agreement was for the purchase of his rights in the company. This was

confirmed in his witness statement.

Thus, the issue is whether Mr Gibbs contracted in his own personal capacity to sell

his shares in the Defendant Company to Mr Wilson, or, in the alternative, whether

he contracted on behalf of the Defendant Company, in the share purchase

agreement.

[53] Unfortunately, the Court was not privy to any submissions or case law on this issue by

the Defendant— the party asking to ascribe liability on the Ancillary Defendant.

[54] The Claimant argued that it dealt with the Ancillary Defendant in his capacity as an agent

for the Defendant at all times. However, the issue in discussion concerns Mr Gibb’s share

19 Halsbury’s Agency Volume 1 (2017) para 157

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purchase agreement with the Defendant and thus, does not concern any dealings between

Mr Gibbs and the Claimant.

[55] In similar fashion, the Defendant’s reliance on the sole case of Wallersteiner v Moir

(1974) 3 All ER 217 to argue that the corporate veil should be pierced was not properly

fleshed out. Counsel failed to properly show, in her submissions, that the Defendant

Company was merely Mr Gibbs’ “puppet” in order to persuade the Court to “pull” the

corporate veil as occurred in Wallersteiner supra.

[56] In reply, counsel for the Claimant contended that the Defendant’s newfound reliance on

the “piercing of the corporate veil” to escape liability was not part of its pleaded case.

I did not agree with this submission. At paragraph 18 of the Amended Defence it was, to

my mind, sufficient for the Defendant to give notice that it intended to include Mr Gibbs

as an Ancillary Defendant considering that all correspondence was addressed to him.

I do, however, agree with the remainder of counsel’s submission that the Defendant has

seemed to confuse the relevant issues in contention. Ms Sylvester for the Claimant argued

that Counsel for the Defendant based her submission on the issue of whether Mr Gibbs

should be personally liable to the Claimant for the debt on the grounds that the Defendant

Company was really his “puppet” i.e. “pierce the corporate veil”. This is a separate issue

from the material issue at hand, which is, whether Mr Gibbs should be personally liable

to indemnify the Defendant because of his failure to disclose the debt.

[57] Bearing this in mind, the Court notes the learning in Halsbury’s supra under the

principles of agency as stated above, which, when applied to the case at bar, states that

Mr Gibbs “…will continue to be liable even after the discovery of the agency by the other

party, unless and until there has been an unequivocal election by the other contracting

party to look to the principal alone.”

The debt that is the subject of these proceedings is ultimately owed to the Claimant and

thus, on the material oral agreements for the provision of services, the Claimant and the

Defendant are considered to be the contracting parties. It follows that if the Claimant

makes an unequivocal election to look at the Defendant Company alone for the

satisfaction of its debts, then it appears that such request must be granted. Based on Ms

Page 21 of 25

Sylvester’s submissions, it is clear that she has made such an election on behalf of the

Claimant.20

[58] In any event, I agree with Ms Sylvester’s submissions, especially her reliance and analysis

of the learning cited in the case of VTB Capital v Nutriek International Cop’n and

others (2013) 2 AC 337 by Lord Neuberger21:

140. “In any event, it would be wrong to hold that Mr Malofeev should be treated

as if he was party to an agreement, in circumstances where (i) at the time the

agreement was entered into, none of the actual parties to the agreement intended

to contract with him, and he did not intend to contract with them, and (ii)

thereafter, Mr Malofeev never conducted himself as if, or led any other party to

believe, he was liable under the agreement.”

142. “In my view, if the corporate veil is to be pierced, the true facts must mean

that in reality it is the person behind the company rather than the company which

is the relevant actor or recipient as the case may be.”

[59] Considering that it is the Defendant who alleged that the corporate veil should be pierced,

the burden rests on it to show that (i) Mr Wilson intended to contract with Mr Gibbs in

his (Mr Gibbs’) personal capacity to purchase his shares of the company and (ii) that Mr

Gibbs conducted himself in a way that led Mr Wilson to believe that he, Mr Gibbs, would

be personally liable under the share purchase agreement for any failure to disclose the

debts.

To my mind, the Defendant has failed to properly address these issues in its submissions

and thus, has not discharged this burden of proof. Further, Mr Gibbs’ case has always

been that there was no term of the share purchase agreement which made him personally

liable for any loss of the Defendant Company.

[60] Accordingly, I do not find the Ancillary Defendant liable to indemnify the Defendant for

the debt owed to the Claimant.

20 See para 48 of the Claimant’s submissions 21 Paras 140 & 142

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I shall therefore dismiss the Ancillary Claim.

What is the amount owed to the Claimant?

[61] This is the final issue to be resolved in this matter and was no less difficult to determine.

The Defendant put the Claimant to proof of all the sums claimed. Considering that the

three oral agreements involved discussions with the Ancillary Defendant and Mr

Belgrave on behalf of the Defendant Company, the Court must focus their evidence to

determine what is owed to the Claimant.

[62] Mr Gibbs, at trial, gave the following evidence on this issue:

1) That he admits that money was owed to the Claimant but that the balances reflected

in the emails from Natalie Gonzales varied drastically from what was agreed with

Mr Gonzales.22

2) That he received the quotations sent by the Claimant for their services performed

from 2009 to 2011. In particular, that he gave no evidence that he disagreed with

the figures in Mr Gonzales’ quotation for great fete 2010 in the sum of

$177,885.00.23

3) That he failed to mention in his evidence-in-chief, any agreement with Mr Gonzales

that Mr Gonzales would forgive the Defendant Company’s debts in 2011.24

4) That nowhere in his evidence-in-chief did he deny the amount stated in the

quotation from Mr Gonzales dated the 6th July, 2011 in the sum of $124,800.00 nor

did he deny that Mr Gonzales performed the services.25

5) That after giving Mr Gonzales $80,000.00 cash as part payment after the 2011

event, he admitted that he continued to owe Mr Gonzales money.

6) That he never disputed the figure contained in the email dated the 5th August, 2010.

22 NOE 17th Nov page 31 23 NOE page 35 24 Page 37 NOE 25 NOE page 41

Page 23 of 25

7) That despite the above admissions, he disagreed that the amount owed to the

Claimant is: $177,885.00 (undisputed quotation from 2010) + $124,800.00

(undisputed 2011 quotation) - $80,000.00 paid in cash.26

[63] Mr Belgrave’s evidence at trial was simply that he remembered giving Mr Gonzales’

$80,000.00 in cash.

[64] However, both witnesses run into difficulty in relying on this fact in support of their case.

This is because this alleged payment of $80,000.00 in cash to Mr Gonzales after the 2011

event never found its way into the Ancillary Defence. Thus, this evidence was introduced

only in Mr Gibbs’ and Mr Belgrave’s witness statements. The fact that it was not pleaded

means that they ought not to be allowed to rely on this fact as part of their case.

I therefore do not accept that Mr Gibbs paid Mr Gonzales the sum of $80,000.00 in cash

after the 2011 event.

[65] Mr Gonzales’ case made no reference to any such payment in any event. His pleaded case

and evidence-in-chief were consistent as to the quotations sent and the amounts claimed.

[66] At trial, he confirmed that the Defendant Company made part payments of the debt under

the 2009, 2010 and 2011 quotations and that those payments were made in cash.

However, Mr Gonzales admitted that he failed to document those payments anywhere.27

Thus, he accepted that he had a very casual style of business.

He however asserted that such informality did not make it difficult for him to keep track

of what was owed to his company.28

The extent of his very lackadaisical accounting system was revealed when he stated that

although he deposited the cash payments from the Defendant Company into an account,

he produced no bank statement to prove same. Most importantly, as stated above, he

stated that each of his quotations expressly asked the Defendant to reply with

confirmation but no such written confirmation was ever received.

26 NOE page 43 27 NOE 16th November, 2016, page 16 & 17 28 Page 19

Page 24 of 25

[67] The problem that Mr Gibbs faces is the discrepancy between his pleaded case and his

evidence both in his witness statement and at trial on the issue of the quotations. In his

Ancillary Defence, he simply stated that he was not party to the oral agreements and

therefore, accepted no liability thereunder. That was the entirety of his defence to the debt

claimed. He therefore failed to address in any manner, the amounts contained in the

quotations.

His witness statement then raised a different defence—that although money was owed to

Mr Gonzales, the amount stated in the quotations varied drastically from the amount they

agreed upon. Further, that Mr Gonzales told him not to worry about Natalie’s quotations.

[68] In similar fashion to the above, I find that this new defence was not pleaded and therefore,

the Ancillary Defendant ought not to be allowed to rely on it at trial. This finding means

that Mr Gibbs has not at all challenged the amounts on the quotations in 2009, 2010 and

2011 and thus, is deemed to admit same.

[69] Accordingly, I find that the Claimant has proven its entitlement to the debt claimed in its

Amended Claim as follows:

Balance owed from 2010: $177,885.00

+ Quotation from 2011: $124,800.00

TOTAL: $302,685.00

IV. Disposition:

[70] Accordingly, in light of the foregoing analyses and findings, the order of the Court

is as follows:

ORDER:

1. Judgment be and is hereby entered for the Claimant against the Defendant on

the Claimant’s Amended Claim.

2. The Defendant shall pay to the Claimant the judgment debt in the sum of

$302,685.00.

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3. Interest is hereby awarded on the said sum of $302,685.00 at the rate of 1.5%

per annum from the date of filing of the Claim (i.e. 14th April 2015) to the date

of this judgment (i.e. 20th February 2019) quantified in the sum of $17,414.75.

4. Thereafter there shall be statutory interest on the said judgment debt at the

rate of 5% per annum from the date of this judgment to the date of payment.

5. The Defendant shall pay to the Claimant costs of the Amended Claim to be

quantified on the prescribed scale of costs to be calculated as follows: Value of

the Claim = Judgment Debt + pre-judgment interest =$302,685.00 +

$17,414.75 = $320,099.75. Prescribed costs on $320,099.75 (value of the Claim)

amounts to $47,209.98 in accordance with Appendix B CPR 1998.

6. That the Defendant’s Ancillary Claim be and is hereby dismissed.

7. That the parties shall address the Court on the question of the entitlement and

quantification of costs on the Ancillary Claim.

___________________

Robin N. Mohammed

Judge