Authentic Builders General Hardware 2021 Ltd Elvis Lum Young Navindra Ramnanan v Harry Harnarine Krystal Ramjattan Hari Harnarine Amrit Harnarine Authentic Builders General Hardware Ltd
| Jurisdiction | Trinidad & Tobago |
| Judge | Mr. Justice Robin N. Mohammed |
| Judgment Date | 02 June 2022 |
| Neutral Citation | TT 2022 HC 129 |
| Docket Number | Claim No. CV2021-02018 |
| Court | High Court (Trinidad and Tobago) |
the Honourable Mr. Justice Robin N. Mohammed
Claim No. CV2021-02018
THE REPUBLIC OF TRINIDAD AND TOBAGO
Mr Justin Phelps instructed by Mr Gary Hannays for the Claimants
Mr Dinesh Rambally, Mr Kiel Taklalsingh and Mr Vivek Lakhan-Joseph instructed by Mr Stefan Ramkissoon for the Defendants
On 25 June 2021, this Court granted an ex-parte injunction in favour of the Claimants. The terms of the order were as follows:
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(a) An order restraining the Defendants and each of them whether by their servants and or agents or howsoever otherwise from preventing the Claimants and or their agents or whomsoever they may designate from time to time, access to the premises situate at No. 1 O'Meara Road, Arima, including the administrative office, sales department, warehouses, vehicles and all other departments used by the hardware in carrying out its operations (the business).
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(b) An order restraining the Defendants and each of them whether by their servants and or agents or howsoever otherwise from permitting any person to enter the business other than persons authorized to so enter by the First Claimant.
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(c) An interim injunction restraining the Defendants or either one of them, their employees, servants and or agents from disposing of, removing, assigning, transferring, concealing, pledging, selling or otherwise dealing with the assets, including motor vehicles, heavy equipment, stock and inventory of the hardware operations without the approval of the Claimants.
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(d) An interim injunction freezing the hardware operations, including the removal of any assets, inventory, documents and any other records, until a proper audit of finances, inventory, assets, accounts receivables, accounts payables, sales, and expenditures are undertaken whether jointly or by an independent court appointed person.
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(e) An order that this claim be deemed fit for urgent and early hearing;
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(f) The costs of this application be costs in the cause.
On 1 July 2021, the Claimants filed a Notice of Application seeking the following further interim orders of the Court:
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(a) That this application be deemed urgent and fit to be heard during the period provided for in Paragraph 1 of Practice Direction No. 17.
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(b) That such further orders as may be necessary be made to preserve the business and affairs of the First Claimant.
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(c) An order prohibiting the Defendants whether by their servants and agents or howsoever otherwise from obstructing the Claimants in their efforts to preserve the assets and income of the First Claimant including the taking of stock inventory, identifying assets and collecting financial data and records and communicating with suppliers.
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(d) That the Defendants do deliver up all chattels and operational equipment to facilitate the operations of the First Claimant.
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(e) That the Defendants be restrained from taking any steps to obstruct or hinder the operations of the First Claimant.
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(f) That leave be granted to serve the orders made on this application and the orders already in place on Karon Dharamdass of Teck Bugz Limited.
The grounds of the application were as follows:
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(a) As soon as the orders of the Court were made on 25 June 2021, the Defendants began to obstruct the Claimants’ efforts to preserve the assets and income of the First Claimant and have made numerous allegations with a view to obstructing the same.
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(b) On a daily basis since the said orders were made the Defendants have made allegations and threatened the Claimants with legal action;
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(c) An exchange of correspondence between Attorneys-at-Law for the Defendants and Attorneys-at-Law for the Claimants demonstrates that the Defendants intend to obstruct the First Claimant's business and affairs unless they are in control of the First Claimant, which is contrary to the shareholding, and contractual basis upon which the First Claimant is based.
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(d) The First Claimant has commissioned a stock count supervised by an independent and Chartered Accountant and to which said exercise the Defendants were invited throughout in the person of their duly authorized representative, namely, the Fourth Defendant.
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(e) The exercise was completed on the 30th June 2021 despite several attempts to disrupt it by the Fourth Defendant who walked out when the attempts at disruption failed.
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(f) The completion of the stock count/inventory has given the parties an accurate status of the physical stock on site when the First Claimant took possession on the 26th June 2021.
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(g) A FCCA accountant has expressed the view that serious financial irregularity has taken place in the business during the period when the Defendants were in control.
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(h) There are substantial recurrent expenditures imminent such as the rent payment of approximately $38,000.00 and the instalments for the two (2) trucks, which are in the sum of about $34,000.00.
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(i) The Defendants have diverted all sales and profits for the month of June 2021 and therefore left the Company without its own resources to even pay its rent and instalments.
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(j) The First Claimant will suffer irreparable injury if its business is not reopened soon since its clients will go to other Hardware stores including that of the Defendants. Suppliers will also become apprehensive to supply the First Claimant if there is no continuity in its operations.
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(k) The First Claimant has paid for the point of sale system and is entitled to its use in its operations. The First Claimant also paid for the down-payment for the trucks and the profits of the First Claimants business paid for the instalments (1 being paid so far) and all other machinery and equipment. The Claimant has also paid for all other ancillary equipment purchased for the 10 tonne Hiab truck and the salaries for the drivers and therefore entitled to use said equipment in its operations.
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(l) The Claimant has retained a Fellow member of the Association of Certified Chartered Accountants (FCCA) who has done a preliminary review of the documents involved in this matter and has found that the impugned activities of the Defendants are irregular and contrary to proper accounting practice and that the business had a high possibility of fraud.
An affidavit of Elvis Lum Young was filed in support. The affidavit details the refusal of the Defendants and its agents on the morning of 26 June 2021 to give the Claimants via the bailiff access to the financial and other records of the company. Karon Dharamdass from Teck Bugz Limited who installed the Point of Sale system, cameras and the fingerprint access to the administrative offices, was telephoned by the bailiff and asked to provide access to reinstate the point of sale system but he refused to do so and stated that he was only taking instructions from Harry Harnarine and no one else. Harry Harnarine was contacted by the bailiff to instruct Teck Bugz Limited to restore access but he refused. The records were accessed using an employee's credentials. The LINX machine which was used to divert monies into the Defendants’ accounts was taken to the Fraud Squad upon making the report on behalf of the First Claimant.
By email dated 27 June 2021, the Defendants’ attorney-at-law wrote to the Claimants’ attorney-at-law seeking further undertakings. The Claimants’ attorney responded to this email and inter alia sought a representative of the Defendants to witness a stock-taking exercise. The stock-taking exercise commenced at about 11:45am on the 28 June 2021 and was supervised and conducted by Chartered Accountant, Hardeo Dookhran. Harry Harnarine was disruptive and uncooperative during the process. Two trucks which were brought in by the Fourth Defendant and an agent of the Fifth Defendant were inspected but the Third Defendant indicated that the trucks would be taken back into his possession. The bailiff advised Mr Lum Young to take possession of the trucks.
The stock-taking continued the next day. The Fourth Defendant was present and intensified his searches in his administrative areas without paying attention to the process. Around 12:15pm, the Fourth defendant began to challenge the authority of the accountant and indicated that the Defendants would no longer be participating in the exercise and left the premises. The stock-taking continued until the 30 June 2021.
The First Claimant retained a Fellow Member of Association of Chartered Certified Accountants, Mr Nigel Laptiste, who has provided a preliminary report containing inter alia the sales of the company in relation to its initial stocks and the allegations contained in the Statement of Case. The report was attached.
On 12 July 2021, the Defendants filed a Notice of Application for interim relief and the variation and discharge of the said ex-parte interim injunction.
The Court has been asked to grant the following reliefs:
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(a) The Claimants whether personally and/or through their agents and/or servants be hereby restrained from preventing the Defendants and/or their agents and/or servants from (i) access to the premises situate at No. 1 O'Meara Road, Arima by any means whatsoever; and (ii) from involvement in the business and operations of the hardware.
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(b) A mandatory Order be granted that the Claimants restore the Defendants’ access to the premises situate at No. 1 O'Meara Road, Arima and do all things necessary to facilitate same including but not limited to providing keys for any new locks placed on the premises.
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(c) Item (a) of the said Order be discharged and the Defendants provide in its stead an...
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