Senior Counsel Ralph Ramkarran SC has successfully represented Trinidad High Commissioner to India, Dave Persad, in the Judicial Committee of the Privy Council (JCPC) in London, United Kingdom, in the case of Dave Persad (Appellant) v Anirude Singh (Respondent) which was heard on June 21.
The case pertained to a claim by Singh against Persad in 2002 for arrears of rent, damages for breach of covenant and mesne profits arising from a breach of a lease agreement under which Persad’s business premises were leased from Singh at Manzanilla Road, Mayaro, Trinidad.
The lease was between Singh and Chicken Hawaii (Trinidad) Ltd (“CHTL”), a company established by Persad after he had personally negotiated the terms of the lease. The first time Singh became aware that the lessee was going to be CHTL and not Persad was when he received the lease agreement which Persad, a lawyer, had prepared. He nevertheless signed the lease, knowing that a company had a separate legal personality.
Singh issued proceedings against both CHTL and Persad, claiming that the latter had “at all material times acted on his own.” Justice Pemberton gave judgment for some TT$44,000 with interest and costs. The Judge found that Persad acted “in his personal capacity” in negotiating the lease and that it was evident that “this was a one man show in the hope that if all was not well he would not be held personally liable.” The Trinidad Court of Appeal upheld the decision on the ground that a “court may pierce the corporate veil when there is an abuse of the corporate personality to frustrate the legal consequences of one’s actions.” Both Pemberton J and the Court of Appeal found that this is what Persad did.
The JCPC, in considering whether Persad was liable, which was the main point in the appeal, rejected the reasoning of Justice Pemberton and the Court of Appeal. It referred to Salomon v Salomon, decided in 1897, which established and defined the corporate personality of companies and emphasized that companies are formed for the purpose of avoiding individual liability. It referred to two recently decided cases of VTB and Prest, which ruled that a person must have an existing legal obligation which the person seeks to avoid by establishing a company. The JCPC found that Persad had no legal obligation which he evaded by forming CHTL and was therefore not liable. The appeal was upheld in Persad’s favour with costs. Singh was represented by Anand Beharrylal, a British-Trinidadian Barrister.
The JCPC is Trinidad’s final court of appeal, Trinidad not having yet joined the Caribbean Court of Justice, which is seated in Trinidad.
Appeals from Guyana to the JCPC were abolished in 1970 when this country became a Republic. Its final court is now the Caribbean Court of Justice.