Daniel Jay Dykgraaf v The Split Holdings Ltd
| Jurisdiction | Belize |
| Judge | Madam Justice Patricia Farnese |
| Judgment Date | 16 March 2022 |
| Court | Supreme Court (Belize) |
| Year | 2023 |
| Docket Number | Claim No. 66 of 2022 Claim No. 319 of 2022 |
IN THE MATTER of the Companies Act, (Chapter 250) of the Substantive Laws of Belize
AND
IN THE MATTER of an Application under Section 98 of the Companies Act for an Order that the time for registration of a Charge and Memorandum Accompanying Charge be extended
The Honourable Madam Justice Patricia Farnese
Claim No. 66 of 2022
Claim No. 84 of 2022
Claim No. 319 of 2022
IN THE HIGH COURT OF BELIZE, A.D. 2023
Ms. Priscilla Banner and Ms. Wendy Auxillou, for the Applicant
Rt. Hon. Mr. Dean O. Barrow and Ms. Darinka Muñoz for the Respondent
The Court was asked to decide if three claims ought to be consolidated into a single claim or, in the alternative, to proceed as a joint hearing. I find that the three claims involve common questions of law and fact that justify the claims being consolidated to avoid the potential for conflicting verdicts if the matters were tried separately. Consolidation is also consistent with the Court's overriding objective to deal with matters justly. Finally, that the fact that Parties are a claimant in one matter and defendant in another is not a bar to consolidation.
Ms. Rodriguez is the Administratrix Ad Colligenda Bona of estate of Mr. James Lynskey. Mr. Lynskey was the sole director and sole shareholder of the Split Holdings Limited (Split Holdings). The Split Holdings owns the “Split Property”, a commercial property on Caye Caulker. The Land of the Lazy Lizard Ltd (Lazy Lizard), a separate corporate entity, operates a restaurant and 2 bars on the Split Property. The estate of Mr. Lynskey controls the Lazy Lizard. Ms. Rodriguez is the instructing party in this litigation for the Lazy Lizard and the Split Holdings. All three Applicants share the same legal representation.
Mr. Daniel Jay Dykgraff seized possession of the Split Property on the grounds that they were acting as a lawful receiver in relation to an unregistered charge on the Split Property executed by The Split Holdings and Mr. Dykgraff in 2019, prior to Mr. Lynskey's death. The charge relates to a US$3,000,000 loan from Mr. Dykgraff to Mr. Lynskey, as borrower, and The Split Holdings, as surety. While in possession of the Split Property, 1 Mr. Dykgraff entered into a lease of the Split Property with LL Caye Caulker Company Limited (LL Caye). My Dykgraff controls LL Caye.
Mr. Bruce Bobby Hunt was Mr. Dykgraff's employee/agent in Belize when Mr. Dykgraff seized possession of the Split Property. Mr. Hunt, LL Caye, and Mr. Dykgraff have the same legal representation and have made joint submissions to this Court.
This application sees to consolidate three Claims. The central issues in each claim are:
of 2022 Mr. Dykgraaf v Split Holdings
Mr. Dykgraff seeks an order directing that the time for registration of a Charge and Memorandum Accompanying Charge between the parties be extended. He asserts that the missed deadline was primarily accidental and or due to inadvertence or to some other sufficient cause. Specifically, he claims that he was waiting to receive a copy of the land title for the Split Property from Mr. Lynskey. Ms. Rodriguez, on behalf of The Split Holdings, challenges the authenticity of the loan agreement that gave rise to the charge and notes that no resolution to raise a loan of US$3 million has been filed with the Companies Registry. She further alleges that the Mr. Dykgraaf did not need the land title to register the charge but deliberately failed to register in order to avoid paying the stamp duties. Registration of the Legal Charge and Accompanying Memorandum has been suspended by the Registrar of Companies pending the outcome of this litigation. The Registrar has also denied the Notice of Appointment of Receiver.
of 2022 Ms. Rodriguez (as Administratrix), Split Holdings, Lazy Lizard v. Mr. Dykgraaf, Mr. Hunt, LL Caye
Ms. Rodriguez et al. seek damages for trespass to the Split Holdings and a permanent injunction restraining the Defendants from occupying the Split Property. Mr. Dykgraaf asserts he has a right to occupy the Split Property as a lawful receiver as a consequence of Mr. Lynksey's default of the loan agreement. Mr. Hunt and LL Caye argue that they did not trespass as their occupation arises from Mr. Dykgraaf's rights as lawful receiver.
of 2022 Mr. Dykgraff, LL Caye v. Ms. Rodriguez (as Administratrix), Split Holdings
Mr. Dykgraff seeks repayment of the $US 3 million loan he says is in default plus damages and specific performance of the loan agreement. Mr. Dykgraff specifically asks for specific performance of the share purchase and buy-out option in the loan agreement. LL Caye seeks damages for the breach of the lease agreement. Ms. Rodriguez denies that the loan was in default and question the authenticity of the loan agreement and the charge. Ms. Rodriguez possesses a copy of a loan agreement between the same parties, for the same amount, containing different terms. The Defendants also say that Mr. Dykgraaf and LL Caye are not entitled to the damages they seek because their actions, including signing the lease agreement were unlawful. Ms. Rodriguez and Split Holdings assert that Mr. Dykgraaf is not a lawful receiver because the charge was never registered.
That I have the discretion to consolidate these matters is without doubt. Rules 26.1(2)(b) and (h) of the Supreme Court ( Civil Procedure) Rules, 2005 (CPR) include the power to consolidate proceedings or try two or more claims on the same occasion in the Court's case management powers. Other than the overriding objective to deal with cases justly, the CPR provides no guidance on when an application to consolidate or to jointly hear matters should be granted.
The Parties submissions signal general agreement as to the factors I must consider. As outlined in Simmonds v Minister of Labour & Social Security et al. 2 consolidation typically occurs in cases that have common questions of law or fact or arise out the same transaction or occurrence. Saving time and expense to parties and the Court can justify consolidation. A real risk of inconsistent or irreconcilable conclusions of facts or law in separate proceedings is an additional reason in favour of consolidating claims. Prejudice to a party, delay, and the application coming at a later stage in the proceedings are factors that speak against consolidation.
After reviewing the Parties' submission, it is clear that this application will be decided on three issues:
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1. Do the three claims involve common questions of law or fact or arise out of the same occurrence?
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2. Do the factors that support consolidation outweigh those that speak against consolidation?
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3. Is the fact that Parties are a claimant in one matter and defendant in another a bar to consolidation?
Yes. At the root of the three claims are questions related to the status and enforceability of a loan Mr. Lynskey entered into prior to his death with Mr. Dykgraaf. Mr. Dykgraaf alleges the loan was in default and he is entitled to specific performance of the loan agreement. Ms. Rodriguez says the loan was not in default and even if it were, the loan agreement Mr. Dykgraaf wishes to enforce is not the proper loan agreement. Deciding...
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