Krisenergy (Gulf of Thailand) Ltd v Rubicon Vantage International Pte Ltd
| Jurisdiction | Cayman Islands |
| Judge | (Goldring, P., Field and Moses, JJ.A.) |
| Judgment Date | 18 November 2020 |
| Court | Court of Appeal (Cayman Islands) |
(Goldring, P., Field and Moses, JJ.A.)
Companies — compulsory winding up — grounds for winding up — inability to pay debts — application for injunction to prevent presentation of petition to wind up based on statutory demand — application and appeal dismissed — no genuine and substantial dispute concerning debt — no genuine cross-claim for amount exceeding statutory claim
Held, dismissing the appeal:
(1) The appellant did not pursue the ground of appeal that the judge erred in fact and law in construing the charter and should have held that the skid works were a variation within the meaning of that expression in the charter. If that ground had been pursued, the court would have upheld the judge’s conclusion for the reasons she gave (paras. 48–49).
(2) The appellant could not complain that the judge had ignored affidavit evidence that there was an explicit agreement between a representative of the appellant and the respondent to employ the variation procedure in respect of the skid works. It did not appear that the appellant had raised the alleged agreement in argument before the judge. It was hardly surprising that the judge did not deal with the alleged agreement, as she was faced with a great deal of other affidavit evidence to which her attention was drawn. If, contrary to this view, the appellant was entitled to criticize the judge for not addressing the alleged agreement, it would be for the present court to consider whether this evidence should have led to the appellant’s application succeeding below. The court considered that the failure of the judge to address this evidence afforded no basis for setting aside the judge’s decision to dismiss the application for the following reasons. The evidence that there was such an agreement was shadowy and vague, and no contemporaneous documents were produced that referred to or otherwise evidenced the making of the agreement. It would be very surprising in the circumstances if the respondent had agreed that the charter’s provisions dealing with variations were to apply to the skid works. The alleged agreement was not pleaded in the claim form issued in the Commercial Court in London where it was alleged that the transportation, installation and integration of the skid were to be undertaken in accordance with the charter which provided for the approval of the costs thereof by the appellant prior to such works being commenced. The alleged agreement was inconsistent with the entire agreement provision in the charter and/or with the provision that none of the provisions of the charter would be considered waived unless an express waiver were given in writing (paras. 52–53).
(3) The court accepted the respondent’s submissions that the appellant’s conventional estoppel case had no real prospect of success and afforded no ground for setting aside the judge’s dismissal of the appellant’s injunction application (paras. 56–57).
(4) The court did not accept that the judge had misconstrued the relevant provisions of the charter and erred in finding that the opening sentence of cl. 3.3.7 of Exhibit B (“Charter approved third party costs only in respect of variations in accordance with the terms of the Charter, and excluding insurance, to be reimbursed at cost plus basis shall be subject to the following mark-up of demonstrated direct cost. Direct cost mark-up: 10%”) was not applicable to the costs of the skid works. Clause 3.3.7applied not only to the costs of the skid works but also to a situation where there had been a variation in accordance with cll. 4.1–4.4 and the parties had agreed on the basis of actual costs plus the mark-up as provided in Exhibit B. The skid works were part of the original work to be undertaken by the respondent in accordance with Exhibit A and therefore they were not subject to the variation procedures provided for in cll. 4.1–4.4. Clause 3.3.7 of Exhibit B must have been intended to apply both to the costs of the skid works that were not contemplated as being subject to the variation regime and where the parties had agreed a variation order on the basis of actual documented costs plus the mark-up in Exhibit B. It therefore followed that it must have been intended that the first sentence of cl. 3.3.7 would apply where the parties had agreed a variation within cl. 4.5(c) and the second sentence “Direct cost mark-up: 10%” was to apply where there was an obligation on the charterer under cl. 12.2(ii) to reimburse expenses identified in Exhibit B. Since the skid works were not a variation but part of the original work, the appellant’s obligation to pay the costs thereof was not covered by the first sentence of cl. 3.3.7 but by the second sentence “Direct cost mark-up: 10%” (para. 60).
(5) The judge did not misconstrue cl. 13.2. The words “in good faith” in cl. 13.2 must be construed having regard to the wording and purpose of cl. 13.2 as a whole. So construed, the words did not mean that the charterer would only fail to act in good faith if it knew it had no grounds for disputing liability. Instead, there would be a lack of good faith for the purposes of cl. 13.2 not only where it was known that there were no grounds to dispute an invoice but also where the stance taken by the charterer was not in accordance with reasonable commercial standards of fair dealing, even if the charterer honestly believed that the grounds relied on were in accordance with fair dealing. On the language of cl. 13.2, “the item billed” was not “disputed in good faith” where part of the sum to which the item billed referred was accepted as having to be paid. In this situation it was only that part of the bill which was disputed in good faith that would be determined in proceedings in the English High Court if the charterer so elected. Applying this approach, in refusing to offer to pay what on any reasonable view approximated to a sum that was not capable of being disputed, the appellant did not act in good faith in relation to the whole of invoice no. 7 (“the item billed”) because the stance it took was otherwise than in accordance with reasonable commercial standards of fair dealing. The court therefore agreed with the judge’s conclusion that cl. 13.2 afforded the appellant no justification for refusing to pay at least the sum that was indisputable, which clearly exceeded the $100 specified in s.93(a) of the Companies Law (paras. 71–73).
(6) The appellant had shown no good ground for overturning the judge’s finding that the cross-claim was not genuine and serious. The judge’s finding was the result of an evaluative exercise and it had been said many times that an appellate court should be very cautious in differing from the evaluation of the judge at first instance. The judge summarized the claimas it was pleaded in the claim form and the reasons she gave for reaching her conclusion were cogent and provided a sound basis for her finding. In particular, she was entitled to place the reliance she did on the extraordinary delay in bringing the cross-claim (from December 2015 to April 2020) and there was a solid basis for her scepticism as to the losses the appellant claimed to have suffered due to the alleged breach of warranty. The court also rejected the submission that the judge should have had a doubt about the cross-claim and therefore should have adopted a cautious approach. The burden was on the appellant to establish that it had a serious and genuine cross-claim and the judge was entitled to hold on the evidence before the court that the appellant’s claim was not serious or genuine (paras. 77–79).
(1)Angel Group Ltd. v. British Gas Trading Ltd., [2012] EWHC 2702 (Ch), considered.
(2)Bayoil S.A., In re, [1999] 1 W.L.R. 147; [1999] 1 All E.R. 374; [1998] BCC 988; [1998] T.L.R. 606; [1999] 1 BCLC 62, referred to.
(3)Biogen Inc. v. Medeva plc, [1997] R.P.C. 1; (1996), 38 BMLR 149, referred to.
(4)Blindley Heath Invs. Ltd. v. Bass, [2015] EWCA Civ 1023; [2017] Ch. 389; [2017] 3 W.L.R. 166; [2016] 4 All E.R. 490, referred to.
(5)CPC Group Ltd. v. Qatari Diar Real Estate Inv. Co., [2010] EWHC 1535 (Ch), considered.
(6)Citicorp Intl. Ltd. v. Castex Technologies Ltd., [2016] EWHC 349 (Comm), referred to.
(7) Company (No. 2340 of 2001), Re a, English High Ct., April 26th, 2001, unreported, considered.
(8)Company, Re a, [2016] EWHC 1046 (Ch), referred to.
(9)Coulon Sanderson & Ward Ltd. v. Ward (1986), 2 BCC 99207, referred to.
(10)Doughty Hanson & Co. Ltd. v. Roe, [2007] EWHC 2122 (Ch); [2009] BCC 126, referred to.
(11)Emirates Trading Agency LLC v. Prime Mineral Exports Private Ltd., [2014] EWHC 2104 (Comm); [2015] 1 W.L.R. 1145; [2014] CLC 1, considered.
(12)LDX Intl. Group LLP v. Misra Ventures Ltd., [2018] EWHC 275 (Ch), considered.
(13)Manifest Shipping Co. Ltd. v. Uni-Polaris Ins. Co. Ltd., [2001] UKHL 1; [2003] 1 A.C. 469; [2001] 2 W.L.R. 170; [2001] 1 All E.R. 743; [2001] 1 All E.R. (Comm) 193; [2001] 1 Lloyd’s Rep. 389; [2001] CLC 608, considered.
(14)Mann v. Goldstein, [1968] 1 W.L.R. 1091; [1968] 2 All E.R. 769, referred to.
(15)Mulalley & Co. Ltd. v. Regent Bldg. Servs. Ltd., [2017] EWHC 2962 (Ch), referred to.
(16)Quarry Prods. Ltd. v. Austin Intl. Inc., 2000 CILR 265, referred to.
(17)SBJ Stephenson Ltd. v. Mandy, [2000] EWHC 277 (QB), referred to.
(18)Tallington Lakes Ltd. v. South Kesteven District Council, [2012] EWCA Civ 443, referred to.
(19)Teesside Gas Transportation Ltd. v. CATS North Sea Ltd., [2019] EWHC 1220 (Comm), considered.
Companies Law (2020 Revision), s.93(a):
“A company shall be deemed to be unable to pay its debts if—
(a)a creditor by assignment or otherwise to whom the company is indebted at law or in equity in a sum exceeding one hundred dollars then due, has served on the company by leaving at its registered office a demand under that person’s hand requiring the company to pay the sum...
To continue reading
Request your trial