PHILIPSBURG:--- NV GEBE was hit with another blow on Wednesday morning when the Court of First Instance delivered its verdict in favor of former Temporary manager Sharine Daniel who was also the company’s head internal auditor for more than ten years.
In the decision rendered on Wednesday, the court said that NV GEBE did not prove its case neither did they submit and or substantiate the accusations they brought against Daniel, one being she stole property from the company and is responsible for the March 16th, 2022 cyber attack.
Based on the decision the court ordered that NV GEBE reinstate Sharine Daniel as the Head Internal Auditor seven days after it is notified of the court’s decision. In the event NV GEBE fails to comply then the company has to pay a penalty of NAF 200.00 per day with a maximum penalty of USD 50.000. NV GEBE also has to pay the cost of the court proceedings estimated to be NAF 2,500.00.
Below is the decision rendered in open court on Wednesday including a free translation.
COURT OF FIRST INSTANCE OF SINT MAARTEN Case number: SXM202300524
Decision dated 30 August 2023
regarding
the public limited liability company N.V. GENERAL ELECTRICITY COMPANY VENWINDSE ISLANDS, established in Sint Maarten,
applicant, also defendant in the counter-application, authorized representative: mr. Z.J.A. BARY,
in return for Sharine Denise DANIEL, residing in Sint Maarten, defendant, also applicant in the counter-application authorized representative: mr. J. DEELSTRA,
The parties will hereinafter be referred to as Gebe and Daniel.
1. The process flow
1.1. Gebe filed a petition with exhibits on May 17, 2023.
On July 7, 2023, Daniel submitted a statement of defense, also an independent counterapplication, with exhibits. In letters dated 6 and 10 July 2023, Gebe submitted additional exhibits. The request was handled on July 12, 2023. At the oral hearing, the attorneys spoke on the basis of pleadings submitted by them. The clerk took notes of everything discussed at the hearing.
1.2. The verdict is set to date.
2. The facts
2.1. The following facts will be established between the parties in this proceedings.
marked. These facts appear from documents submitted and/or follow from statements of the parties insofar as they have been put forward by one party and have been acknowledged by the other party or have not been disputed or have been contested with insufficient reason.
2.2. Gebe operates the only energy and drinking water company in Sint Maarten. It
Country Sint Maarten owns 100% of the shares of Gebe.
2.3. Daniel joined Gebe on June 16, 2013, as Head Internal Auditor (HIA).
entered on the basis of an employment contract for an indefinite period, most recently at a salary of Naf 15,100.00 gross per month plus holiday allowance and thirteenth month.
2.4. Articles 7 and 8 of the Articles of Association of Gebe, insofar as these procedure of importance, stipulated the following: •
"Management, Article 7
1. The corporation shall be managed by a Managing Board, consisting of at least one (1) but not more than three (3) natural persons, under the supervision of a Supervisory Board, consisting of five (5) natural persons. If only one Managing Director has been appointed he shall carry the title of Chief Executive Officer (CEO) or President, hereinafter referred to as President.[...]
Representation, Article 8
1. The corporation shall be represented by the President if only one Managing Director should be officiating, and by the President acting alone or by the President and another Managing Director acting jointly, if more than one Managing Director should be officiating, with due observance of the provision of the following paragraphs.
2. The following acts of management of the Managing Board are subject to the approval of the Supervisory Board:
h. to conduct legal procedures, with the exception of such measures that cannot be postponed, or which are of a purely conservatory nature;
1-1
4. The approval from the Supervisory Board referred to in paragraph 2 of this article 8 shall be sufficiently evidenced towards third parties by a written statement relative thereto from the Chairman of the Supervisory Board, or if the matter is precluded from officiating, by the
Vice Chairman.
6. Without detriment to the provision stated in paragraph 2 of this Article 8, the General Meeting is at all times authorized to designate one or more persons as special representatives of the corporation, either incidentally or for a definitive period, in the event of a conflict of interest between the corporation and a Managing Director or shareholder.
I. .1
11. L.] when all the Managing Directors are absent or otherwise precluded from acting, the corporation shall be temporarily managed by a person appointed for that purpose by the Supervisory Board. The person thus appointed shall convoke a general shareholders' meeting as soon as possible in order to provide for a definitive management. As long as this has not been accomplished, the acts of management of the person thus appointed, shall be limited to those that cannot be delayed."
2.5. By decision of May 11, 2022, Daniel has been appointed Acting Temporary
Manager as provided for in article 8 paragraph 11 of the articles of association, under suspension of her employment contract in the position of HIA. She held the position of Acting Temporary Manager in the period from 21 to 29 May 2022 and from 1 June to 1 September 2022, in the absence of the current Temporary Manager.
2.6. The General Meeting of Shareholders (the Country of Sint Maarten alone shareholder) of Gebe has on September 6, 2022, Mr. Troy Washington appointed as Special Representative as provided for in article 8 paragraph 6 of the articles of association. Subsequently, the then Chief Operating Officer of Gebe was suspended on September 12, 2022, pending an investigation by a third party, SOAB, into the cyber-attack that hit Gebe on March 16, 2022. At the same time, Washington was appointed by the Supervisory Board (Supervisory Board) as Temporary Manager. Washington requested that Daniel take a leave of absence on September 19, 2022, pending the same investigation, which Daniel complied with for the duration of the investigation.
2.7. On March 17, 2023, Gebe informed Daniel of the results of the SOAB investigation, with a request to respond. Daniel did the latter on March 31, 2023, requesting sevens for re-employment.
2.8. Gebe's representative notified Daniel by email dated April 14, 2023
that Gebe intends to submit an application to the General Court for the dissolution of her employment contract. Three reasons are given for this:
a. acting contrary to Gebe's Internal Audit Charter
b. because Daniel has been TM and HIA simultaneously;
c. the taking of business assets by Daniel on September 3, 2022;
d. Gebe's intention to outsource the audit activities.
3. The request 3.1. Gebe requests, essentially, that the Court by order de.
terminate the employment contract between the parties, primarily immediately due to a (delayed) urgent reason and alternatively in the shortest possible term due to a change in circumstances, all without awarding any compensation. Would the Court consider that compensation should nevertheless be awarded in the latter case if it were to be moderated considerably, taking into account all the circumstances of the case?
3.2. Daniel has put forward a motivated defense.
4. The counter-request
4.1. Daniel requests the Court to order by order, as far as possible.
provisionally enforceable, Gebe to condemn:
primarily: to allow it to perform its activities as HIA in accordance with the terms of the labor contract.
alternatively: to payment of a termination fee, applying the subdistrict court formula of ANG 352,333.33 gross, increased by an amount of ANG 374,925.96 as compensation for missing out on the
Case number: SXM202300524
sheet 4
Judgment date: August 30, 2023
appointment as CEO, both amounts plus legal interest from fourteen days after the date of the decision.
primary and subsidiary: to pay the actual costs of legal assistance in the amount of USD 20,046.60, or at least the fixed legal costs, increased by statutory interest from fourteen days after the date of the decision.
4.2. Gebe put forward a motivated defense.
5. The assessment
Flat request
5.1. Daniel argues that Gebe should be declared inadmissible in her request because it was unauthorized by Washington as a Special Representative. This preliminary defense fails.
5.2. It is assumed that Gebe is a party to the proceedings as a legal person to its locus standi. In addition, according to the articles of association, Gebe is normally represented by its CEO. However, there is a vacuum in Gebe's board of directors and for that reason Washington has also been appointed Temporary Manager by the Supervisory Board. As such, Washington may perform administrative tasks that cannot be delayed (article 8, paragraph 11 of the statutes). The Court considers the initiation of this procedure to be one of these. In addition, he is, of course, bound by the Articles of Association, just like the regular director of Gebe. These expressly prescribe that prior approval must be given by the Supervisory Board for the conduct of legal proceedings (Article 8, paragraph 2, under h, of the Articles of Association). It was established at the hearing that no such decision exists. The fact that the Supervisory Board is involved at a later date in consultations about the progress of the procedure could indicate ratification of Washington's decision, but that is not certain. After all, that too requires the existence of a traceable decision, which has not been proven. The Court therefore cannot rule out the possibility that the decision to initiate proceedings is vitiated by a defect. As a result, that decision may be voidable and any interested party who has a reasonable interest in compliance with the obligation not fulfilled can file a claim for annulment. However, a decision cannot be submitted as a defense for annulment. Assuming that the latter is implicit in the claim of inadmissibility, the Court must therefore disregard it.
5.3. The Court will assess the substance of the request. However, Gebe has that not made easy. Daniel has rightly complained that the voluminous petition with the many hundreds of pages of productions lacks an understandable and readable explanation of relevant facts and circumstances. In fact, everything Gebe can think of at Daniel's expense has been brought up haphazardly since she entered the service. Insofar as Gebe thereby wanted to present an overflowing bucket, she fails to recognize that the contents of a bucket can also evaporate through the passage of time, and she ignores the fact that the Court of First Instance in a decision of November 3, 2021 (of no less than 20 pages) about criticism of Daniel's performance has already considered a few things against Gebe. The repetition of that criticism in these proceedings with further addition of unstructured arguments without sufficient apparent relevance and without sufficient legal interpretation is, in the opinion of the Court, a flawed and unsound procedure. This not only makes the work of the Court more difficult but also frustrates the opposing party in its ability to conduct an adequate defense.
5.4. The Court understands that Gebe basically accuses Daniel of having her duties neglected and that she (merle) is therefore to blame for the aftermath of the fatal cyber attack that could have taken place in the company. However, this accusation is not supported by the thorough investigation conducted by SOAB and Gebe failed to point out where the report of that expert party contains relevant criticism of Daniel's performance that can be related to the aftermath of the cyber attack. The Court therefore attaches no significance to the accusation.
5.5. Because the Court of First Instance was unable to make any sense of what Gebe stated in it
In addition, the petition has also accused Daniel, the announcement made by the authorized party on 14 April 2023 and the three specific accusations mentioned by Coen are referred to, as already stated in other 2.8 in this decision. It is worth judging the following. It is factually incorrect that Daniel simultaneously held the positions of Temporary Manager and HIA. Upon her appointment as Temporary Manager, Itmers agreed to suspend her position from HIA, and Gebe appointed an interim HIA. With regard to the accusation that Daniel would have stolen company goods on September 3, 2022, the Court established that this cannot follow directly from the evidence that Gebe has gathered for this. Daniel has made it sufficiently plausible that she only took personal belongings with her on the day in question. Daniel has again summarized the account of that day during the oral hearing (pleading notes mr. Deelstra, marginals 15 and 16), which Gebe has not been able to disprove. Mgt about the reorganization proposed by Gebe, which would provide for the outsourcing of audit work and should therefore lead to the loss of jobs, including Daniel's. Daniel rightly pointed out that the approval of the Supervisory Board required for a reorganization is lacking, that there is no reorganization plan, let alone that consultations have been held with the employees and the trade union. In the absence of any concrete indication, the General Court will not anticipate any of this.
5.6. The reasonable grounds necessary for dissolution of the employment contract
ground, consisting of a change of circumstances, is therefore absent. Nor can it be found in the disruption in the employment relationship with Daniel, as alleged by Gebe. This requires that at least attempts have been made to improve a poor working relationship. Gebe left that behind. A serious and permanently disrupted employment relationship is therefore not (yet) possible are assumed.
5.7. The Court rejects the request for dissolution. Gebe is the in with that outcome the unsuccessful party so that it must pay the costs of the proceedings.
The counter request
5.8. The primary advanced employment with the strengthening of penalty payments can be assigned. It is stated first and foremost that an employee, in principle, has a compelling interest in being able to perform the agreed work. By imposing a far-reaching measure such as suspension or non-activity, the employer deprives the employee of the opportunity to perform the agreed work. This measure also has a diffusive character. It therefore follows from the requirements of being a good employer that the employer can only use this measure if he has reasonable and sufficiently weighty grounds to do so. When assessing this, it is in any case taken into account whether there is an imminent disadvantage for the employer if the employee continues to work. This is conceivable, for example, if an investigation has to be carried out into irregularities or complaints in which the employee is involved, and he could frustrate that investigation.
Gebe, who is under the obligation to demonstrate that there are reasonable grounds for excluding the employee from work, has not made it sufficiently plausible that all this is the case. First of all, there is no longer any research going on. During the investigation, Daniel paused. After completing this, she understandably insisted on resuming work. Gebe should not have refused that request. After all, the file does not reveal anything about uncontrollable and unworkable situations in the workplace due to the presence of Daniel.
5.9. Daniel has also requested an integral cost award. That the claim is dismissed by the Court. According to settled case law, the starting point is that the parties to the proceedings can each claim a fixed compensation for the costs of the proceedings. Only in special circumstances can this principle be deviated from and a full court order for costs awarded. The court must exercise restraint in this respect and limit its application to cases of abuse of procedural law and/or wrongful act. In particular, it concerns a claim or a defense of which a party to the proceedings knew or should have been able to, or on propositions of which that party had to understand in advance that they had no chance of success. All this is not included in the request made by Gebe. Daniel believes that her position on Gebe's admissibility does provide sufficient grounds for this, but the General Court did not follow that position, while a different opinion would only indicate a legal difference of opinion. That can happen and it is not illegal. It will suffice for the Court to order Gebe to pay the costs of the proceedings at the fixed rate.
6. The decision
6.1. rejects the request;
6.2. orders Gebe to pay the costs of the proceedings estimated at ANG 2,500.00
authorized representative for salary; on the request
orders Gebe to allow Daniel within seven days of notification of this decision to perform her usual duties as Head Internal Auditor with all associated duties and powers, under penalty of forfeiture of penalty payments of Naf 200.00 per day for each day that Gebe fails to act to comply with this order, up to a maximum of USD 50,000.00;
6.4. orders Gebe to pay the costs of the proceedings estimated at ANG 2,500.00
authorized representative for salary;
6.5. declares this decision for 1 barrel with regard to the decisions under 6.3 and 6.4
executable in stock;
6.6. rejects what is requested more or otherwise.
This decision was issued by mr. G.A.F.M. Wouters, Judge, and pronounced in open court on 30 August 2023 in the presence of the Registrar.
Click here for the Dutch Version of the decision rendered on Wednesday.
