Central Bank of Belize Registrar of Credit Unions v Cedric Flowers

• Jurisdiction: Belize
• Judge: Madam Justice Geneviève Chabot
• Judgment Date: 17 May 2022
• Docket Number: Claim No. 719 of 2021
• Court: Supreme Court (Belize)

BETWEEN

Central Bank of Belize Registrar of Credit Unions

Claimants/Respondents

and

Cedric Flowers

Defendant/Applicant

BEFORE

The Honourable Madam Justice Geneviève Chabot

Claim No. 719 of 2021

IN THE SUPREME COURT OF BELIZE, A.D. 2022

Appearances:

Yohhahnseh Cave, Counsel for the Claimants/Respondents

E. Andrew Marshalleck and Naima Barrow, Counsel for the Defendant/Applicant

RULING ON THE DEFENDANT's APPLICATION FOR DECLARATION OF NO JURISDICTION

Introduction

1 This is an Application for a declaration under Rules 9.7 and 63.6 of the Supreme Court ( Civil Procedure) Rules, 2005 (the “ Rules”) that the Court has no jurisdiction to try the Claim. The Claimants/Respondents (hereinafter the “Respondents”) in the Claim, the Central Bank of Belize and the Registrar of Credit Unions, applied to this Court for orders under sections 11 and 12 of the Arbitration Act, Cap 125 in relation to an arbitral award made on June 4, 2021 (the “Award”). The Respondents seek an order setting aside parts of the Award or, alternatively, remitting those parts of the Award to the Arbitrator for reconsideration.

2 The Applicant/Defendant (hereinafter the “Applicant”) makes this Application seeking the Claim to be dismissed on the ground that this Court does not have jurisdiction to try the Claim under either section 11 or 12 of the Arbitration Act. The Applicant argues that the Arbitrator did not engage in misconduct and that there is no defect or error of law patent on the face of the record. According to the Applicant, there is therefore no basis for this Court to exercise its jurisdiction to remit any of the matters complained of by the Respondents to the Arbitrator for reconsideration, or to set aside the portions of the Award complained of by the Respondents.

3 The Application is dismissed. The Court has the power and authority to try this Claim under the Arbitration Act. Any assessment of the grounds of the Claim as against the requirements of sections 11 and 12 of the Arbitration Act necessarily involves an assessment of the merits of the Claim. The Court declines to expand the scope of Rule 9.7(1)(b) and will exercise its jurisdiction in the circumstances of this case.

The Fixed Date Claim

4 The Fixed Date Claim pertains to a Final Award made on June 4, 2021 by Melissa Balderamos Mahler, Sole Arbitrator, under Clause 9 of an agreement entered into by the Applicant, Cedric Flowers, and the Registrar of Credit Unions on May 2, 2017. In the Award, the Arbitrator makes certain orders related to the Applicant's remuneration under the May 2, 2017 agreement and another written agreement dated April 24, 2017.

5 The Respondents seek orders under sections 11 and 12 of the Arbitration Act in relation to the Award. Specifically, the Respondents seek to set aside those parts of the Award which held and ordered the following:

• a. The Applicant to be paid the sum of $3,250.00 plus GST for the liquidation of the Police Credit Union Limited (“PCU”);

• b. The Applicant to be paid the sum of $9,425.00 plus GST for the liquidation of the Citrus Growers and Workers Credit Union Limited (“CGWCU”); and

• c. The Applicant to be paid the sum of $195,000.00 plus GST for the liquidation of the Civil Service Credit Union Limited (“CSCU”).

6 Alternatively, the Respondents seek to remit the said portions of the Award to the Arbitrator for reconsideration.

7 The grounds for the Claim are detailed in the First Affidavit of Diane Gongora. According to Ms. Gongora, as part of her reasons for the Award the Arbitrator correctly determined that there was no legally enforceable agreement in respect of the liquidation of PCU, CGWCU, and CSCU. The Arbitrator therefore had to determine a reasonable sum to be paid to the Applicant. To do so, the Arbitrator was required to examine the evidence supplied by the Applicant.

8 At paragraphs 85 and 86 of the Award, the Arbitrator identifies the following deficiencies in the evidence provided by the Applicant (the Claimant in the arbitral process):

The burden is on the Claimant to properly set out the time he has spent on the work done. The Arbitrator finds that he has failed to do so, from the invoices produced by the Claimant.

Further, the Arbitrator notes that the Claimant has not itemized his bill by actual time spent on each activity. The Claimant did accept under cross-examination that the invoice “does not attempt to identify specific tasks or give an indication as to how much time was expended on each individual task”. There is a general notation of work done but this was not itemized or separated by activity or date.

9 According to Ms. Gongora, following her finding that the evidence supplied by the Applicant was deficient, the Arbitrator opined that the Respondents “ have provided no evidence to show or even suggest what time would be reasonable in the circumstances or to counter the assertion by the Claimant that certain hours were actually spent on the work as stated in the said invoice” (para. 88 of the Award).

10 Notwithstanding the above findings, the Arbitrator relied on the time allocation in the Applicant's invoices in determining what was owed to him in respect of the liquidation of PCU, CGWCU, and CSCU. The Arbitrator's approach, according to Ms. Gongora, was erroneous and amounted to an error of law patent on the face of the record because:

• a. The Arbitrator misapplied the principle and implications of the burden of proof;

• b. Once the Arbitrator had expressly found, as she did, that the evidence from the Applicant was dissatisfactory, she was obligated to reject the evidence irrespective of any evidence coming from the other side in opposition to it; and

• c. The Arbitrator's reliance on the time allocation in the Applicant's invoices in the said proceedings in order to determine what was reasonable remuneration in the circumstances was erroneous on point of law and a misapplication of the principle of quantum meruit.

The Application

Submissions of the Applicant

11 The Applicant applies for an order declaring that this Court does not have jurisdiction to try the Claim. The Applicant submits that the Respondents have not provided any basis for this Court to exercise its jurisdiction to remit any of the matters complained of by the Respondents to the Arbitrator, or to set aside the portions of the Award complained of by the Respondents.

12 The Application rests on two main contentions. Firstly, the Applicant argues that there was no error of law or misconduct by the Arbitrator in observing the Respondents’ failure to provide evidence. It is the burden of any party to a dispute to establish the facts and contentions in support of its case and persuade the tribunal of the correctness of its allegations. Taken in its proper context, the sentence at paragraph 88 of the Award referring to the Respondents’ failure to provide evidence was in support of the Respondents’ own assertion that the sum claimed by the Applicant was not a reasonable sum. The Respondents therefore have mischaracterized what was actually found by the Arbitrator.

13 Secondly, the Respondents’ position that the Arbitrator engaged in misconduct by relying on portions of the Applicant's evidence after finding that the Applicant's evidence was deficient, instead of rejecting the evidence in its entirety, has no basis in law. The Applicant's claim was a claim for a type of damages, and the Arbitrator was entitled to do her best to determine the sums due to the Applicant. A tribunal's task is to make whatever findings it can on the evidence before it, and that is precisely what the Arbitrator did in making the awards being challenged.

14 According to the Applicant, there is no basis for this Court to exercise its jurisdiction since the errors and the misconduct alleged by the Respondents clearly do not appear on the face of the Award. At the hearing, Applicant's counsel acknowledged that if this Court considers that it must go further than simply looking at the face of the Award to satisfy itself of the absence of any error or misconduct, then the Court should exercise its jurisdiction to try the Claim.

Submissions of the Respondents

15 The Respondents oppose the Application. They note that the Application was not brought under Rules 26. 3 or 15, which would require the Court to assume jurisdiction and to adjudicate the merits of the Claim, but was made under Rule 9.7. A challenge under Rule 9.7 may consist of either a dispute as to the court's jurisdiction to try the claim, or an argument that the court should not exercise its jurisdiction.

16 The Applicant seeks a declaration that the Court has no jurisdiction. In Dunn v Parole Board, 1 the Court held that challenges to the court's jurisdiction do not include disputes based on an application of any limitation provisions which provide a defence to a claim and are considered procedural. Similarly, the contention that there were no reasonable grounds for bringing the claim and that the claim had no real prospect of success did not go to the jurisdiction of the court, but went to an assessment of the claim that was before the court.

17 The Applicant's argument can be distilled to an argument that the Respondents’ prospects of success are either extremely limited or non-existent. The matters on which the Application is premised involve an assessment of the merits of the Claim, something that the Court may only consider subsequent to a finding that it has the necessary jurisdiction. Rule 9.7 is inapplicable.

18 Sections 11 and 12 of the Arbitration Act confer statutory powers on this Court to remit an award for the reconsideration of the arbitrator in four circumstances: where there is some defect or error patent on the face of the award; where the arbitrator made some mistake; where material evidence which could not with reasonable diligence have been...