Everaldo UK v Corozal Sugar Cane Producers Association

• Jurisdiction: Belize
• Judge: Farnese, J
• Judgment Date: 12 September 2024
• Court: Supreme Court (Belize)
• Year: 2024
• Docket Number: CLAIM No. CV 56 of 2020

Between:

Everaldo UK

Claimant

and

Corozal Sugar Cane Producers Association

Defendant

CLAIM No. CV 56 of 2020

IN THE SENIOR COURTS OF BELIZE

IN THE HIGH COURT OF BELIZE

Appearances:

Anthony Sylvester for the Claimant

Nigel O. Ebanks & Darinka Muñoz for the Defendant

DECISION

Farnese, J

1 Mr. Uk seeks declarations that decisions taken by the Corozal Sugar Cane Producers Association (CSPCA) to remove him as a Director and expel him as a member are invalid and void. He claims he has suffered loss and damage because these decisions have directly affected his ability to deliver and sell his quota of sugar to the Belize Sugar Industry Limited/ASR Group factory. He also seeks an order that he is entitled to a sum of money, but his pleadings do not specify the sum's amount or the basis of the claim of entitlement.

2 Mr. Vladimir Puck submitted an affidavit in reply to the claim on behalf of the CSCPA as its Chairman. Mr Puck contends that Mr. Uk's expulsion was warranted because of Mr. Uk's improper conduct and abdication of duties as a Director of the CSCPA and leader of the cane farmers in the Patchakan Zone. Mr. Puck further contends that the expulsion followed the procedure outlined in the applicable bylaws.

3 For the reasons outlined below, I find that the CSCPA's decisions to remove Mr. Uk as a Director and to expel him contravened the CSCPA's bylaws. Mr. Uk is entitled to be restored as a member of the association. Due to the passage of time and the recent decision in separate legal proceedings between the parties, 1 restoring Mr. Uk as a Director has become an impossibility. Mr. Uk, however, is entitled to damages in the amount of BZ$9,600 and prescribed costs. I decline to make any decision as to whether the CSCPA was justified in their actions.

Issues

4 The dispute between Mr. Uk and the CSCPA raises the following issues:

• a) Was the decision to remove Mr. Uk as a Director of the CSCPA lawful?

• b) Was the decision to expel Mr. Uk as a member of the CSPCA lawful?

• c) If either of the decisions were lawful, were they justified?

• d) What remedy is Mr. Uk entitled to if any if the CSCPA's decision are found unlawful?

Analysis

Was the decision to remove Mr. Uk as a Director of the CSCPA lawful?

5 The CSCPA admits that the Board of Directors and Surveillance Committee sent a letter to Mr. Uk on 13 ^th November 2019 (Removal letter) that stated that Mr. Uk was “immediately relieved of all

duties and responsibilities as a board of Director” following a vote of non-confidence at a “special secluded emergency meeting” of the Board of Directors held on 10 ^th November 2019

6 Mr. Uk argues, and I agree, that the decision was unlawful because the decision did not conform with the CSCPA bylaws. I also agree that the decision did not conform with the requirements of natural justice, principally the right to know the charge one is facing and the right to respond to those charges.

7 The parties agree that bylaws passed in 2015 (2015 Bylaws) were in force when Mr. Uk was removed as a Director. The 2015 Bylaws do not address the removal of an elected member of the Board through a vote of non-confidence. The only means to remove a Director without bringing the issue to the membership at large is outlined in Article 9.4:

9.4 An elected member of Board shall cease to hold office if he/she:

• 9.4.1 is subject to any disqualification mentioned in the Act or bye-laws;

• 9.4.2 is absent from three consecutive meetings of the Board without leave of absence having been granted by the board; however, before taking any action, the Director concerned shall be given an opportunity by the Board to be heard;

• 9.4.3 resigned and his resignation has been accepted by the Board.

Disqualification references article 9.3 which outlines the eligibility requirements for election to the Board:

9.3 A person shall not be eligible for election as a member of the Board of Directors of the Association if he/she:

• 9.3.1 has not been a member of the Association for at least three years.

• 9.3.2 is a paid employee of the Association;

• 9.3.3 has applied for insolvency or is declared insolvent;

• 9.3.4 is of unsound mind;

9.3.5 is a defaulter in the payment of any debt due to the Association for a period not exceeding six months from the date on which the payment fell due;

9.3.6 holds any office of profit under the Association or receives any honorarium; Except under circumstances as approved by the Board.

The CSCPA has not argued that Mr. Uk was disqualified, and Mr. Uk has not resigned. Therefore, Mr. Uk could only be removed because he was absent from meetings.

8 The balance of evidence does not support a finding that Mr. Uk was removed as a Director of the CSCPA for non-attendance at Board meetings. Mr. Puck testified that Mr. Uk boycotted approximately 20 meetings, a charge Mr. Uk denies. No evidence was provided in support of Mr. Puck's claim. But even if such evidence was provided, the Removal letter does not identify non-attendance at meetings as a reason for his removal. The letter contains many allegations of poor conduct and references two warning/caution letters sent to Mr. Uk by the Surveillance Committee. The first letter was purported to have been sent in February 2018. I am unable to conclude whether Mr. Uk's attendance was addressed because this letter was not submitted into evidence. The second letter was sent two days prior to the Removal letter and accuses Mr. Uk of behaviours that are irresponsible, damaging, immature, malicious, unnecessary, and designed for personal gain. The Committee requests that he immediately desists but fails to substantiate these allegations with examples of Mr. Uk's offending conduct; Mr' Uk's non-attendance at Board meetings is not mentioned.

9 I also find that Mr. Uk was not given the opportunity to be heard as required by Article 9.4.2 of the 2015 Bylaws. Mr. Uk testified, and Mr. Puck did not deny, that Mr. Uk was not given notice of the “special secluded emergency meeting” in clear violation of the 2015 Bylaw. This violation alone is sufficient to declare the Board's decision unlawful and, therefore, invalid. The CSCPA is established under section 32 of the Sugar Industry Act. 2 The Sugar Act mandates that the CSCPA manage its affairs in compliance with the Act and the association's bylaws. 3

Was the decision to expel Mr. Uk as a member of the CSPCA lawful?

10 Mr. Uk was sent a letter (Expulsion Letter) on 31 ^st December 2019 informing him that the Board of Directors and the Surveillance Committee met and decided to expel him as a member of the CSCPA pursuant to Article 41 of newly revised bylaws (Revised Bylaws). The Revised Bylaws

were purported to have been passed at the CSCPA's annual general meeting (AGM) held on 7 ^th December 2019. Mr. Uk disputes the validity of the Revised Bylaws on the grounds that they were not properly before the membership at the AGM because members were not given notice of the motion to amend the bylaws. He argues that the 2015 Bylaws continues to apply which mandate under Article 6.3 that he be given one month notice of an intention to expel him. Mr. Uk further asserts that regardless of which bylaws are found to apply, the expulsion was unlawful because he was not afforded the right to be heard

11 The CSCPA asserts that the Revised Bylaws were properly enacted and govern Mr. Uk's expulsion. While the CSCPA concedes that he AGM's agenda did not contain an express item for amending the bylaws, they argue that this item fell under “Other Business”. Mr. Puck testified that the membership understood from previous AGMs that revised bylaws would be brought forward at the 2019 AGM. If, however, the court finds that the 2015 Bylaws applied, the CSCPA argues that Mr. Uk waived his rights to be notified and heard through his conduct.

12 Based on the record before me, I find that the 2015 Bylaws were in force when Mr. Uk was expelled. The validity of the Revised Bylaws was recently the subject of a decision of Chabot J in a claim between the CSCPA and Mr. Uk and I endorse Chabot J's reasoning for reaching the conclusion that the Revised Bylaws were not properly enacted. 4 The members did not have proper notice that amendments to the bylaws would be considered at the 2019 AGM contrary to Article 17.1 of the 2015 Bylaws.

13 Article 17.1 mandates members be given “due” notice of amendments. Due notice not only requires knowledge that an amendment to the bylaws will be proposed, but that the members have actual notice of the content of the amendment. I find that the members had neither in this case. First, even if I were to find as fact that members were made aware of the need to revise the bylaws at previous AGMs and that there was an intention to bring them forward at the subsequent AGM, an intention expressed at a previous meeting is not sufficient notice.

14 Also, Article 17.1 requires members be given “due notice of the intention to move the amendment” (underline added). The use of “the” removes any doubt that members must have notice of the

specific changes proposed. The Article does not say members must be given notice of an intention to amend the bylaws — members must be given notice of “the amendment.” A review of the minutes of the AGM clearly establishes that the content of the amendments was not presented to the members for consideration

15 I further find that the Board of Directors failed to comply with the requirement to give Mr. Uk notice of their intention to expel him from the CSCPA as...