Graham J
IN THE GRAND COURT OF THE CAYMAN ISLANDS
HOLDEN AT GEORGE TOWN, GRAND CAYMAN
CAUSE NO. 367 OF 1997
BETWEEN:
THOMPSON SHIPPING COMPANY LIMITED
PLAINTIFF
AND:
PORT AUTHORITY OF THE CAYMAN ISLANDS
DEFENDANT
PROCEEDINGS had and taken before The Honourable Mr. Justice Graham on March 11, 1998, in George Town, Grand Cayman.
APPEARANCES:
ON BEHALF OF
MR. P. LAMONTAGNE, Q.C.,
THE PLAINTIFF:
Instructed by Mrs. K. Thompson
ON BEHALF OF
MR. I. CROXFORD, Q.C.,
THE DEFENDANT:
Instructed by Mrs. C. Bridges of Ritch & Conolly
(WEDNESDAY, MARCH 11, 1998)
1 COURT COMMENCED ON WEDNESDAY,
2 MARCH 11, 1998 AT 9:51 A.M.
3
4 THE COURT: Mr. Croxford, before you begin you will see that a shorthand writer is here. I thought I would record the events leading up to today for posterity, if I may put it in that way.
5 MR. CROXFORD: Certainly, My Lord. I'll sit down.
6 THE COURT: Yes. The case is calied cause number 367 of 1997 Thompson Shipping Company Limited plaintiff, and the Port Authority of the Cayman Islands defendant.
7 The plaintiff in this matter seems to have begun shipping operations around about 1977, so far as material facts arise. On the 21st of September 1979, it applied for a licence to operate a crane in the port of George Town.
8 On the 26th of September of 1978, in Exhibit WTB Exhibit 17, a letter was written by Mr. Bush in which he explained that he was willing to grant a licence subject to certain terms and conditions. That letter specially rejected the proposed series of charges which Thompsons had set out for the use of their crane for operators other than themselves.
9 Consequently what was put forward was in effect a rejection of an offer previously put -- I assume on the telephone or by some letter which I do not have -- and he also suggested rates in substitution of that already suggested, together
(WEDNESDAY, MARCH 11, 1998)
1 with certain conditions precedent. In particular, the
2 payment of the fee and the like. There was no reply to
3 that letter that I have seen -- and I assume that I would
4 have seen one -- had there been such a letter.
5 Accordingly, I have to ask myself whether an enforceable
6 agreement ever came into effect. A letter which writes to
7 someone setting out the terms of a proposed agreement in
8 the ordinary circumstances is dealt with by another letter.
9 There was no such letter. As I read it, the most that
10 could have come into being by the events that took place ---
11 because some informal arrangement appears to have been come
12 to -- was that a bare licence which arose from the conduct
13 of the parties. A bare licence is determinable upon
14 reasonable notice. Incidentally, what appear to have been
15 inchoate conditions precedent were never complied with
16 because, inter alia, the fee was never paid, and there was
17 no final agreement between the parties in legally
18 enforceable terms as to the charges were to be levied on
19 third parties. In a contract of this kind, if there were
20 to be such a contract, it plainly should be spelt out in
21 writing. I say for the future that the Port Authority
22 really should go to its attorneys, whom they employ and be
23 charged no doubt a modest fee, to have the matter done
24 properly. But" there it is. That is what seems to have
25 happened. As I say, the most that I can spell out of the
(WEDNESDAY, MARCH 11, 1998)
1 circumstances and documents is a bare licence. I do so on 09:59 AM
2 the papers, I stress, I have heard neither viva voce 09:59 AM
3 evidence nor argument, but on what I have read, this is how 09:59 AM
4 I see it. If I am wrong, and that a contractual licence 09:59 AM
5 emerged, then it can only have been a licence intra vires 09:59 AM
6 the Port Authority; that is to say, they were only 09:59 AM
7 empowered by law to issue a licence under regulation 120(1) 09:59 AM
8 of the Port Regulations, and if so, there are specific 10:00 AM
9 powers in that regulation to "review, vary or revoke" that 10:00 AM
10 licence. Whether I am right as to proposition one, or as 10:00 AM
11 to the fall-back proposition two, that 'licence' or 10:00 AM
12 whatever it was was revocable upon reasonable notice. By 10:00 AM
13 letter dated the 12th of May 1980, the Port Authority wrote 10:00 AM
14 that it had plans for the provision of a crane or cranes.
15 "Proper notice will be given to you regarding the cessation 10:01 AM
16 or renewal of your permit." That was the situation which 10:01 AM
17 the plaintiffs happily or unhappily lived with up until the 10:01 AM
18 30th of January 1996, when notice was given. By further 10:01 AM
19 letter dated the 5th May 1997 Thompsons were required to
20 remove their cranes (then there were two of them) on the 10:02 AM
21 22nd June 1997. Accordingly Thompsons had 18 months' 10:02 AM
22 notice of the changes in the informal arrangements.
23 There was a meeting on the 12th of April 1996 in 10:02 AM
24 which Mr. LaMontagne, then retained obviously by 10:02 AM
25 Mrs. Thompson, appeared. There was correspondence. Never 10:02 AM
(WEDNESDAY, MARCH 11, 1998)
1 was it claimed in correspondence by Mr. LaMontagne or Mrs. Thompson that a contractual licence had arisen until it
2 appeared in a letter dated the 9th of May 1997. That claim
3 was repeated in the Statement of Claim on the 9th of June.
4 Any court looking at that would be bound to ask, was this
5 at best, an ex post facto rationalisation? This question
6 has a particular resonance when it appears that there were
7 negotiations as to the possibility of the sale of one of
8 Thompson's cranes to the Port Authority in which Mr.
9 LaMontagne and Mrs. Thompson both took part.
10 The next significant date is the 22nd of August 1997
11 when an application was made for an injunction in front of
12 the acting judge Mr. Justice Kipling Douglas. It is a
13 succinct and trenchant judgment -- I might say a
14 characteristic judgment -- he isolated the point at issue
15 and he set it out in a manner with which I respectfully
16 agree. Of course, it was done in short order because what
17 he was concerned with was whether, even if the plaintiffs
18 could establish a colourable claim, he should deal with
19 that by way of injunction or damages. He dismissed the
20 application and that application was appealed to the Chief
21 Justice (acting as a single judge of the Court of Appeal).
22 He dismissed it as well. So the plaintiffs knew from then
23 on that they had a considerable legal mountain to climb.
24 Then what happened? The matter was set down for
(WEDNESDAY, MARCH 11, 1998)
1 trial before this court in January 1998. The matter came before me on half an hour's notice last Wednesday. It was apparent to me that there were problems in the case for the plaintiff -- or seemed to be. I suggested that the correct approach would be for there to be a trial as to the identity and scope of any alleged contract and that was to be dealt with first. Then any question of damages would either flow from that or not at all.
9 There were before me two summonses on that day. On behalf of the plaintiffs for leave not to serve the core bundle. I was not able to grant that request, but that is relevant in the context of what I am about to say, because the Statement of Claim that day was radically altered. It was altered by deletion with the indication of a likely substitution of a claim for damages which, of course, was implicit but not explicit in the claim for an injunction, because damages in lieu was always an alternative to an injunction. Alive to this possibility, Mr. Croxford and Mrs. Bridges, on behalf of the defendants, had previously sought discovery of any documents relevant to the claim for damages which were alleged to flow from the alleged breach of contract and which would be particularised in the re-amendment of the Statement of Claim and arose if an injunction were not granted. This was discovery which should have taken place a long time before. At that, Mr.
(WEDNESDAY, MARCH 11, 1998)
1 LaMontagne told me he wished to have some time to consider how he wished to plead the case for damages. I told him then that it was in my mind to make an order for discovery and he knew -- and those behind him knew -- from that moment, if they did not know before, which would be hard to believe anyway, that there would be an order for discovery made, and that it would be, because of the time set aside for this case, an order in peremptory terms, as it would have to be, because the court order had already been ignored, in that discovery had not taken place as previously ordered by the Chief Justice on the 18th June 1997. Mr. Croxford, at that stage, indicated that he might wish to oppose the application for leave to amend, but on any clear view, he was unlikely to succeed. On mature reflection he did not oppose the amendment and it was granted on the Monday morning.
The case began on Monday morning and it began in chambers. Mr. Croxford, whose summons on Wednesday had been adjourned pending the service of the re-amended Statement of Claim addressed me and asked for the predictable information required. The basis for the claim of damages was simply exactly what one would expect. The Thompsons were, I gather, saying that by not being able to use their own equipment, they had incurred additional charges. To test the veracity of that claim in simple
terms one had to say "well let's have a look at your profit and loss account as between the time when you were operating your own crane with your own employees and see what has in fact taken place after the demarche by the Port Authority." Such documents are discoverable with ease. A simple matter of tapping a computer -- unless I have wholly misunderstood the way that major companies conduct themselves. In this context Mr. LaMontagne told me that discovery would take three weeks.
In addition, Mr. Croxford sought a schedule or any re-scaling of charges to customers because if it transpired that any increased charges arising from the change of circumstances had accrued to Thompsons, Thompsons had the option of passing them on to their customers. They might have alleged, of course, a decline in trade, but that is not their pleaded case as I have noted. Let us hypothesize; if they passed charges on to their customers, then they suffered no loss or damage. If they did, then there might be an analysis to whether that was reasonable in trading terms. We never got that far. Mr. LaMontagne, to my astonishment, told me that he and his instructing attorney would have to supervise the obtaining of this information. What I had ordered, it is to be noted, for the avoidance 'of any doubt, was that the 'accountant' for the Port Authority should meet Thompson's 'accountant', who
(WEDNESDAY, MARCH 11, 1998)
1 I gather is Mr. Wilson, to discuss and identify the documents and to commence the procedure of discovery. I did not order the immediate production of those documents.
2
3
4 What I said was that by the time we came to damages, and allowing for the three weeks which we had for the trial of this action, I expected the discovery process to be complete and the defendants put in a position where they could resist the claim. As I put it to Mr. LaMontagne, he had to assume that his argument on primary liability was to going to succeed and then the court had to proceed to the question of damages. Mr. LaMontagne then said to me, "Oh well, you're threatening to jail Mr. Wilson." I told him that was palpable nonsense, which indeed it was. He also told me that I had in fact issued an Anton Pillar order and I told him that that was also palpable nonsense -- perhaps a slip of the tongue on his part. But most significantly of all, Mr. LaMontagne said to me that, in effect, I had ordered the discovery to the Port Authority of Thompsons' commercial secrets. I said if necessary yes, I had. It seems to me and the court draws this conclusion, that what was more important to Mr. LaMontagne and to the lady behind him who, of course, is not only an attorney for Thompson Shipping Company, but is a prominent family member, and therefore well-acquainted with the inner workings of that company and therefore is in a position with greater
(WEDNESDAY, MARCH 11, 1998)
1 knowledge than most attorneys would ever be. The
2 protection of commercial secrets was more important than
3 futile litigation which they knew must fail. It is in that
4 context that I have briefly set out the problems they faced
5 in setting up an irrevocable contract. It was in that
6 context that I, having said that, told Mrs. Thompson that
7 she could, if she wished, leave court to supervise any
8 discovery process, but I could not for the moment see why
9 it would be necessary, but that was up to her, but Mr.
10 LaMontagne would have to be in the position to open his
11 case to me the moment we went out of chambers and into open
12 court. I was asked to rise for 20 minutes after my order
13 for discovery so that Mr. LaMontagne and Mrs. Thompson
14 could contact the accountant and inform him of the order of
15 the court. When I returned to court Mr. LaMontagne told me
16 that although Mr. Wilson was believed to be at work they
17 could not contact him. No further time was asked for in
18 order to make contact. The court was left with the
19 impression that under no circumstances were Thompsons going
20 to disclose "commercial secrets" to the Port Authority. I
21 further informed Mr. LaMontagne that he could address me on
22 the admissibility and liability for discovery of any
23 particular document.
24 When we went into open court, Mr. LaMontagne told me
25 he proposed to take no further part in these proceedings
(WEDNESDAY, MARCH 11, 1998)
1 nor to call evidence. I took a careful note of what then transpired which I have here. I asked Mr. LaMontagne carefully to consider what course of action he was adopting, to consider the consequences of it, and in particular, to confirm with his instructing attorney, who is in a very unique position in this particular litigation, as to whether he was taking a course that was within the scope of his authority and having done so, he maintained his position. Accordingly, although experiencing a sense of dismay, I entered judgment for the defendants with costs.
12 You have an opportunity now Mr. LaMontagne to correct any issue of fact that you wish to do so. Do you wish to do so?
15 MR. LAMONTAGNE: At this stage?
16 THE COURT: Yes.
17 MR. LAMONTAGNE: No, My Lord.
18 THE COURT: Thank you very much.
(WEDNESDAY, MARCH 11, 1998)
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