The United Bank of Trinidad and Tobago et Al v Farah
| Jurisdiction | Trinidad & Tobago |
| Judge | Hosein, J. |
| Judgment Date | 12 December 1986 |
| Neutral Citation | TT 1986 HC 173 |
| Docket Number | No. 6039 of 1986 |
| Court | High Court (Trinidad and Tobago) |
| Date | 12 December 1986 |
High Court
Hosein, J.
No. 6039 of 1986
For the plaintiffs: Tajmool Hosein S.C. with him S.G. Maharaj and N. Mohammed.
For the defendant: Bruce Procope S.C., with him C. Phelps.
Injunction - Ex parte injunction — Application to continue ex parte injunction whereby defendant is restrained from entering or remaining on premises of Furniture Ltd. or from interfering with receiver appointed by first plaintiff pursuant to debenture whereby Furniture Ltd. charged all its assets to first plaintiff to secure a loan — Order that ex parte injunction continue on the ground that the plaintiffs have not been guilty of any non-disclosure of material facts which would justify discharge.
Company law - Receiver appointed by first plaintiff to manage company's property pursuant to clause in debenture — Powers of receiver — Whether appointment valid.
This is an application by the plaintiffs for the continuation until trial of an ex parte order dated 10th October, 1986 of Davis J., by which the Defendant is restrained whether by himself his servants agents workmen or otherwise howsoever from entering or remaining in possession of certain premises owned by Furniture Limited situate at O'Meara (and described in the writ) together with the buildings plant and equipment thereon (hereinafter referred to as the said premises) or from interfering with or removing from the said premises any stock in trade plant or equipment or other assets of the said Furniture Ltd., or otherwise interfering with the second plaintiff, the first plaintiff's receiver of the assets of the said Furniture Ltd., appointed in the exercise of powers conferred upon the first plaintiff in a certain debenture dated 31st October, 1983 made between the said Furniture Ltd., and the first plaintiff.
On behalf of the plaintiffs there were filed initially three (3) affidavits that by Dennis Evans, another by Hugh Williams and a third by David Siewlal — all sworn on the 10th October, 1986. On behalf of the defendant two affidavits have been filed: one by the defendant himself dated the 14th October, 1986 and the other by Peter Soon dated the 20th October, 1986. In reply the plaintiffs filed an affidavit sworn by William Thompson dated the 21st October, 1986.
In so far as is relevant, the affidavit of Dennis Evans shows that he is the second Vice President of the United Bank of Trinidad and Tobago Ltd. (the Bank), that by a deed of Debenture (the Debenture) dated 31st October, 1983 registered as No. 25681 of 1983 Furniture Ltd., a company duly incorporated under the Companies Ordinance Ch. 31 No. 1 charged all its assets including its freehold and leasehold property, present and future, together with all buildings plant and machinery thereon in favour of the Bank to secure the repayment of monies advanced by the Bank.
Part of the assets of Furniture Ltd., subject to the debenture are the said premises upon the Certificate of Title to which the name of Furniture Ltd., is duly endorsed as the registered proprietor of the leasehold interest therein. Furniture Ltd., as its name implies, is a company engaged mainly in the manufacture and sale of furniture and carries on its operations at the said premises.
At the request of the Bank and in accordance with the terms of the Debenture, Furniture Ltd., mortgaged the said premises to the Bank and a memorial thereof was duly endorsed on the Certificate of Title of Furniture Ltd.
As at the 7th August, 1986 Furniture Ltd., was indebted to the Bank in the total sum of $5,663,197.00 and the Bank by letter of even date demanded payment of this amount from Furniture Ltd., pursuant to Clause 2 of the Debenture and intimated that interest continued to accrue at the rate of $2,382.42 per day.
Furniture Ltd., never replied to the Bank's letter of demand and has paid nothing in liquidation of its indebtedness to the Bank. Accordingly the Bank proceeded to exercise its power under Clause 10 of the Debenture and appointed the second plaintiff receiver and manager of the undertaking stock and other assets of Furniture Ltd., on the 9th October, 1986.
It is convenient here to set out the two clauses (2 and 10) of the Debenture where under the Bank acted:
Clause 2: States that the moneys and liabilities hereby secured shall become due and the security hereby created shall become enforceable: –
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(a) immediately upon demand in writing being made upon the company therefore;
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(b) If the company makes default in payment of any interest hereby secured and so forth…
Clause 10: At any time after this security shall have become enforceable
the Bank may appoint by writing any person (whether an officer of the Bank or not) to be a receiver of all or any part of the property hereby charged in like manner and in every respect as if the Bank were a mortgagee within the meaning of they Conveyancing and Law of Property Ordinance Ch. 27 No. 12 or any statutory modification or replacement thereof for the time being in force and had become entitled under that Ordinance to exercise the power of sale thereby conferred and every officer so appointed shall be the agent of the company (which shall alone be personally liable for his acts default and remuneration) and shall have and be entitled to exercise all power conferred by the said Ordinance in the same way as if such receiver had been duly appointed thereunder and in particular by way of addition to but without hereby limiting any general powers hereinbefore referred to every receiver shall have power to do the following things, namely;
(a) To take possession of collect and get in all or any part of the property hereby charged and for that purpose to take or contest any proceedings in the name of the company or otherwise as may seem expedient.
(b) To carry on manage or concur in carrying on the business of the company or any part thereof and to raise money from the Bank or others on the security of any property hereby charged. By the powers in (f) the receiver could go in and appoint managers and workers for the purposes empowered in the Debenture.
It is to be noticed that by Clause 14 the receiver is empowered pursuant to Section 47 of Ch. 27 No. 12 to pay rents and the cost of repairs, insurance premiums and his own commission and if money is left he must apply it in satisfaction of the Debenture.
By Clause 17, the debenture was initially stamped to cover moneys and liabilities secured up to 7.5 million dollars but for further amounts the Bank may upstamp accordingly.
The Certificate of Title to the said premises is exhibited to Dennis Evans affidavit and shows that F/Plan (Furniture) Ltd. (F/Plan) was the registered lessee of the said premises. The Certificate shows that two caveats entered in 1984 were withdrawn and a memorandum of transfer No. 9 of F/Plan's interest in the said premises to Furniture Ltd., dated 23rd August, 1985 was registered on the 27th November, 1985. A minute later on the 27th November, 1985 there was registered a memorandum of mortgage to the Bank of the interest of Furniture Ltd., in the said premises. About three (3) months later on the 30/1/86 a caveat was registered by the defendant and another caveat was entered by Development Finance Corporation (DFC) on the 2nd October, 1986.
Two days before the appointment of the Bank's receiver on the 7th October, 1986 a writ No. 5899/86 had been issued against the DFC and others by Farah the defendant herein in which inter alia he sought an order in paragraph (g) thereof setting aside the memorandum of transfer dated 23rd August, 1985 from F/Plan to Furniture Ltd., on the ground that it “constitutes a fraudulent conveyance of the plaintiff's (Farah's) premises.”
The writ in those proceedings is exhibited to the Evans affidavit as well as an inventory of the items at the said premises and it is not in dispute that the DFC itself had by a Debenture a security over the said premises though their security is subsequent to the Bank's. In action 5899/86 Farah had joined as the second defendant the receiver appointed by DFC under their debenture one John Hilton who was the liquidator of F/Plan in voluntary liquidation. So much for the affidavit of Dennis Evans.
The gist of Hugh Williams' affidavit is that he was duly appointed receiver of the assets of Furniture Ltd on the 9th October, 1986 in exercise of the powers under the Bank's Debenture and that he was prevented by the defendant from taking possession of the said premises and the other assets of Furniture Ltd., Bearing this out is a letter from the Solicitors for the defendant dated 9th October, 1986 exhibited to his affidavit. The letter states as follows:
Mr. Hugh Williams,
Receiver for United Bank of T & T Ltd.,
over Furniture Ltd.,
c/o Peat Marwick Mitchell & Co.,
65 Independence Square,
Port of Spain.
Dear Sir,
We refer to this afternoon's telephone conversation between yourself and our Mr. Montano wherein you informed the writer that you had today been appointed by United Bank of Trinidad and Tobago Limited receiver over the assets of Furniture Limited. We wish to repeat what was told to you in the said telephone conversation, i.e. the plant at Arima belongs to F/plan (Furniture) Limited and has nothing to do with Furniture Limited which has nothing on these said premises. Indeed, there is an action afoot now to set aside as a fraudulent conveyance the Memorandum of Transfer that your client seems to be mounting its entire legal position on.
Further, take notice that Mr. Richard Farah is a stranger to all matters concerning Furniture Limited and is in no position to deal with anything to do with that company. We suggest that you deal with the Managing Director of that Company.
We also wish to confirm...
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