Go2Capeverde Ltd & Anor v Paradise Beach Aldemento Turistico Algodoeiro S.A.

Factual and Procedural Background

The plaintiffs commenced proceedings seeking payment of outstanding commissions and damages for breach of contract, negligent misstatement, and breach of collateral contract arising from an agreement related to a residential property development in the Republic of Cape Verde. The defendant company was incorporated to carry out this development. The first plaintiff and an individual named as defendant to the counterclaim provided services connected to the project, with the second plaintiff involved under an agency relationship.

The defendant delivered a counterclaim alleging breach of fiduciary duty and failure to account for profits from sales of residential units, including two alleged unlawful dual pricing schemes involving significant discrepancies in sale prices and undisclosed profits retained by the plaintiffs and the individual defendant.

The defendant brought a motion under Order 31, rule 21 of the Rules of the Superior Courts seeking dismissal of the plaintiffs' claim and striking out the defence to the counterclaim due to failure to comply with an agreement to provide voluntary discovery of documents. The motion was contested, with cross-examination of the plaintiffs' representatives over two days.

Legal Issues Presented

1. Whether the plaintiffs and the defendant to the counterclaim failed to comply with their discovery obligations under court orders and agreements.
2. Whether such failure was culpable, deliberate, or malicious within the meaning of Order 31, rule 21.
3. Whether the court should exercise its discretion to dismiss the plaintiffs' claim or strike out the defence to the counterclaim based on the failure to make discovery.
4. The appropriate remedy and consequences for the failure to make discovery in the context of ensuring a fair trial and the interests of justice.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Court's Reasoning and Analysis

The court examined the discovery obligations and the failure by the plaintiffs and the individual defendant to disclose certain relevant documents relating to the alleged second dual pricing scheme. The failure was found to be deliberate and malicious, as evidenced by the concealment of emails that came to the defendant's attention only by chance. The court noted evasive and contradictory evidence from the plaintiffs' representatives, their failure to conduct proper searches before the hearing, and a tactical approach to discovery obligations.

The court applied the legal principles that striking out is discretionary and should not be used to punish but to secure the interests of justice. It acknowledged the spectrum of culpability in discovery failures and emphasized the need to balance ensuring a fair trial with enforcing compliance. The court found that the plaintiffs and the defendant to the counterclaim had not treated their discovery obligations with due seriousness, and there was a substantial risk that other relevant documents remained undisclosed, which could prejudice the trial.

Given the nature of the omitted documents and their relevance to the counterclaim alleging breach of fiduciary duties and secret profits, the court concluded that allowing the defence to the counterclaim to continue would undermine the interests of justice. However, the documents did not directly relate to the plaintiffs' claim for commission, which had a full defence.

Holding and Implications

The court STRUCK OUT the defence to the counterclaim of the plaintiffs and the individual defendant for failure to comply with discovery obligations. The claim by the plaintiffs was not struck out, as the failure related primarily to matters relevant to the counterclaim.

This decision means that the counterclaim proceeds as undefended, effectively granting the defendant judgment on that claim. No new legal precedent was established; rather, the ruling reinforces established principles that discovery failures must be culpable and that striking out pleadings is a discretionary remedy reserved for cases where justice cannot otherwise be served. The court emphasized the importance of discovery in securing a fair trial and the need for parties to engage fully and honestly with their discovery obligations.