Sodalco Development Company Ltd v Turquoise Construction Ltd

JurisdictionTurks and Caicos Islands
JudgeWard, C.J.
Judgment Date06 July 2009
CourtSupreme Court (Turks and Caicos)
Date06 July 2009
Docket NumberCL 86/09

Supreme Court

Ward, C.J.

CL 86/09

Sodalco Development Company Ltd.
Turquoise Construction Ltd.

For the plaintiff: Mr. Ariel Misick QC.

For the defendant: Mr. Martin Green.


Jurong Shipyard Pte Ltd. v. BNP Paribas [2008] S.G.H.C. 86

Braynston Finance Ltd. v. De Vires (No. 2) [1975] 2 W.L.R. 41

Armchair Passenger Transport Ltd. v. Helical Bar Plc [2003] E.W.H.C. 267 (QB)

Whitehouse v. Jordan [1981] 1 All E.R. 267

National Justice Compania Naviera SA v. Prudential Assurance Co. Ltd. (The Ikarian Reefer) [1993] F.S.R. 563; [1993] 2 Lloyd's Rep. 81

Field v. Leeds City Council CA 8.12.99 (The Times 18.01.00), [1999] C.P.L.R. 833 CA

Re Bank of Credit and Commerce International SA (No. 5); Sheikh Khalid v. Bank of Credit and Commerce International SA [1994] 1 B.C.L.C. 429

Re Smith and Fawcett [1942] Ch. 304 CA

Re Janeash Ltd. [1990] B.C.C. 250

Shular AG v. Wickman Machine Tool [1973] 2 All E.R. 39

Re a Company (No. 00962 of 1991) ex parte Electrical Engineering contracts (London) Ltd. [1992] B.C.L.C. 248

Re Claybridge [1997] B.C.L.C. 572


Order 41, rule 5(2) of the Singapore Rules of Court

Order 41, rule 5(2) of the Turks and Caicos Supreme Court Rules

Part 35 of the Civil Procedure Rules of England

Order 38, rule 36(2) of the Turks and Caicos Supreme Court Rules

38/36/2 of the Supreme Court Practice, 1999

Civil Practice and Procedure - Interlocutory Proceedings — Whether the proceedings are interlocutory — Whether the expert evidence should be admitted where the witness' experience was sufficient to warrant admitting as the matter was interlocutory — Whether a witness should be called to attend for cross examination where there was nothing special to depart from the normal method of relying on affidavit evidence — Finding the proceedings were interlocutory in nature and the expert evidence should be admitted at this time

Ward, C.J.

I have before me an Amended Originating Summons filed by Sodalco Development Company Ltd. (Sodalco) on May 11th 2009. Sodalco is applying for an order that the Winding-Up Petition presented by Turquoise Construction Ltd. (Turquoise) [The Petition has been presented but to date not issued by the Supreme Court Registry] be either dismissed or stayed on the grounds that:

  • (i) it is disputed that the debt is owing;

  • (ii) the plaintiff has offered security for the payment of the debt and the defendant has refused such security.


This Ruling deals solely with the following preliminary points:

  • (i) Whether these proceedings can be considered as interlocutory proceedings. Mr. Green sought a ruling from the Court, as he submits that these are not interlocutory proceedings and therefore Sodalco cannot rely upon hearsay evidence contained in affidavits which they have filed.

  • (ii) Whether the evidence set out a) in paragraph 8 and the exhibits attached to the affidavit of James Slattery sworn on 71h May 2009 and/or b) in the affidavit and exhibits attached to the affidavit of Allister Hayes sworn on 8th May 2009 should be considered to be expert evidence. Mr. Green sought a ruling that this was expert evidence and that it should not be admitted in the absence of any order permitting the same.

  • (iii) Whether the Court should exercise its discretion pursuant to Order 38 Rule 3 and order the attendance of Mr. Varet Kak Civre for cross-examination limited to the question of the construction of the Agreement dated May, 20th 2008. [Tab 5 of Exhibit “VJC2” — Affidavit Varet Jak Civre sworn on 4th May 2009] Mr. Green sought a ruling and submitted that this was an appropriate case for permitting him to cross-examine this deponent.


On June 1st, 2009, this Court handed down a ruling in the First defendant's Summons applying for inspection of a document exhibited to the affidavit of Varet Jak Civre. In that ruling, the procedural history of this matter up to May 11th, 2009 was fully set out and I therefore do not intend to rehearse it in the same detail herein.


The defendant issued a Statutory Demand dated April 2nd, 2009 in the sum of $5.850,000. [Paragraph 5 Affidavit sworn by Varet Jak Civre on May 4th, 2009- No exhibits attached to the affidavit]


Proceedings were initiated by Sodalco Development Company Ltd. (Sodalco) by means of an Originating Summons dated May 4th, 2009 applying for an injunction restraining Turquoise Construction Ltd (Turquoise) until trial, or further order in the meantime, from presenting any petition for the winding up of the plaintiff “for non-payment of debt in the sum of $5,800,000 on the grounds that the debt is disputed and the plaintiff has offered security for the payment of the debt and the defendant has refused the same.” On May 4th, 2009 an application for an interlocutory injunction restraining the presentation of the Winding-Up Petition was filed. The affidavit in support was sworn and filed by Varet Jak Civre on May 4th, 2009.


On May 5th, 2009 the defendant presented a Winding-Up Petition. A copy of the Petition was not included in the papers before me.


On May 7th, 2009 James Slattery swore an affidavit on behalf of the plaintiff, in which he gave evidence concerning the degree of works outstanding,/defective and his estimate for the value of incomplete works.


On May 8th, 2009 Allister Hayes swore and filed an affidavit on behalf of the plaintiff Mr. Hayes exhibited to his affidavit a report dated May 7th, 2009 representing his findings concerning the “current status of the elevator installation at the project.”


On June 3rd, 2009 the Court received submissions touching solely on the preliminary issues requiring determination. At the hearing I promised written reasons which I now give.


Having regard to the contents of this Court's related written ruling on June 1st, 2009 and the limited nature of the applications before me, it is not necessary for a wide review of the background facts to be rehearsed herein.


The proceedings initially arise out of a construction contract dated July 14th, 2005 between the plaintiff and the defendant for construction of Phase 1 of the Seven Stars Development in Grace Bay, Providenciales. It is submitted that the initial contract was superseded by the handwritten Agreement dated May 20th 2008. There is a fundamental dispute as to the construction to be placed on this Agreement. There is an alleged dispute about the claim by Turquoise for sums owed pursuant to the Agreement. Sodalco contends that there was considerable delay in reaching the substantial completion of the project and that there are a number of items of defective or incomplete works still left to be done. Sodalco contends that Turquoise are not creditors, as no payments fall due until all the punch list items are finished and the elevator problems solved. Mr. Green contends that Sodalco's contentions about the construction of the Agreement are a recent concoction, which were only raised for the first time in correspondence on 24th April 2009, after the serving and expiration of the Statutory Demand. Mr. Green submits that Mr. Civre only first purported to dispute the debt by letter of 31st March 2009. In that letter, no reference was made to the repayment schedule set out in the May Agreement. Mr. Green submits that his submissions are fortified by the fact that clear negotiations about re-structuring of the May Agreement payments caused by Sodalco's shortage of money (which were frequently referred to by Mr. Civre as a debt) were conducted following the May 2008 Agreement to March 2009. On the other hand, Turquoise rely on the fact that as of around the end of March 2008 Sodalco undertook to give them two free rental units to house the workers that were supposed to deal with outstanding works remained to finish your contract with Sodalco.” [Email Varet Jak Civre to Ygal Yanco 14th April 2009] It is contended by Turquoise that this shows that in May 2008 the parties were both of the view that the outstanding work would not be completed until around the end of March 2009, which is why the last payment under the May Agreement was scheduled to be made on 31st March 2009.


Mr. Green initially submitted that this was not an interlocutory matter. However, following disclosure of details of the case of Jurong Shipyard Pte Ltd. v. BNP Paribas [2008] SGHC 86 to Counsel by the Court, Mr. Green conceded the point and did not seek a ruling. In Jurong, the Singapore High Court [Matter went on unsuccessful appeal to the Singapore Court of Appeal — The Court of Appeal was not asked to address this point] considered an application for an injunction to restrain the commencement of winding up proceedings. One of the issues that the Singapore Court had to consider was the admissibility of hearsay evidence and whether or not the proceedings were interlocutory in nature. If so, they would fall under Order 41, rule 5(2) of the Singapore Rules of Court [Mirrors Order 41, rule 5(2) of the TCI Supreme Court Rules] which provides that hearsay evidence is admissible in interlocutory proceedings. The Court reviewed Bryanston Finance Ltd. v. De Vires (No. 2) [1975] 2 W.L.R. 41 and came to the conclusion that the full context of each proceeding must be examined before deciding if it was interlocutory. The Court went on to find that the proceedings did not require a decision on the merits of the respondent's claims against the applicant and only required a decision on whether triable issues with respect to the applicant's debts arose. As a consequence, the Court found that the proceedings were interlocutory and therefore hearsay evidence was admissible.


Having regard to Mr. Green's belated position, I need not conduct a full review of the relevant case law. However, I find that these proceedings are interlocutory in nature and...

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