Path cleared for Heineken to acquire Geddes’ D&G shares
There is no firm undertaking whether Heineken Sweden will still acquire outstanding shareholdings in brewery and beverage company Desnoes & Geddes Limited, D&G, but the all-clear has now been given, as the Supreme Court has lifted an order preventing widow Margie Geddes from selling the stocks.
Supreme Court Justice Kissock Laing ruled that the assets of Bardi Limited, including the 84 million shares it holds in D&G, do not belong to Geddes and cannot properly form the basis of a charging order over her assets. D&G trades as Red Stripe Jamaica.
The judge discharged a provisional charging order made by Justice Courtney Daye on December 18, 2012, as varied by an order of the Court of Appeal, dated April 10, 2018, to cover 7.5 million shares in D&G held by Bardi.
He also discharged an injunction granted by Justice Daye restraining Mrs Geddes from selling the 7.5 million shares until the hearing of the application for a final charging order.
The provisional charging order and injunction were granted based on a claim filed by the law firm McDonald Millingen against Margie Geddes, the widow of D&G heir Paul Geddes, for fees for work done between 1999 and 2008. The cost of those fees in court documents showed that it amounted to just under US$1.049 million.
The provisional charging order was obtained ex parte and attached to the two and only issued ordinary shares in Bardi, and the 84 million D&G shares it held. Geddes was also barred from trading both sets of shares.
Bardi argued, however, that its shares in D&G are not jointly owned with Geddes and so it owes no debt to the law firm.
Bardi had appealed against an October 2017 decision by another judge, Justice Nicole Simmons, who refused an application to lift the provisional charging order and the injunction imposed by Justice Daye.
However, in February this year, the Court of Appeal directed that the application filed by Bardi be sent back to the Supreme Court for the issues to be resolved.
Those issues relate to the ownership of the assets registered in the name of Bardi; whether Geddes and Bardi should be considered separate legal entities; whether Geddes was acting at all material times as the alter ego of Bardi; and whether in the circumstances there should be a piercing of the corporate veil.
Justice Laing said that having examined the facts on which Millingen relied to support its assertion that Bardi is the alter ego of Mrs Geddes, “I am unable to accept that collectively they do so establish.”
Accordingly, he found that there is no justification for lifting the corporate veil in this case, saying: “I find that Bardi is entitled to the usual protections afforded to a corporate entity with separate legal personality. Its assets, including the shares it holds in D&G, do not belong to Mrs Geddes and cannot properly form the basis of a charging order over the assets of Mrs Geddes.”
Justice Laing also found that Millingen’s claim for costs for fees for legal services from February 4, 2003, to May 13, 2008, was irregular. He said the claim for those fees could only have been properly made on the basis of ‘quantum meruit principles’, since the Court of Appeal had found that a contingency agreement between the parties was unenforceable. Quantum meruit denotes a reasonable sum of money to be paid for services rendered or work done when the amount due is not stipulated in a legally enforceable contract.
As a consequence, he ruled that the costs of US$1,048,807.19 imposed by the court’s registrar be set aside.
Justice Laing said he was not making a finding that Millingen is not entitled to any fees for the legal services. “I have simply found that it is not entitled to claim such fees in the manner that it has purported to do, which is by the claim in the form it has submitted to the registrar and which resulted in the registrar issuing the default costs certificate.”
Justice Laing said the bill of costs procedure used has deprived Geddes of the opportunity to defend the claim by filing a defence and/or affidavits to be considered by a judge of the Supreme Court in the usual manner pursued in ‘claim form’ or ‘fixed date claim form’ proceedings, he added.
Attorney Vincent Chen, who represented McDonald Millingen, said it’s up to his client to decide what to do next. Attorney Melissa McLeod appeared with Michael Hylton, QC, for Bardi.
The Financial Gleaner understands that there is no final word on whether Heineken will still acquire the shares. The Dutch beer maker took over D&G from then majority partner Diageo Plc in 2015.