Bank of Jamaica v Dextra Bank and Trust Company Ltd

• Jurisdiction: Jamaica
• Judge: Carey, J.A.,WRIGHT, J.A.,GORDON, J. A.
• Judgment Date: 29 July 1994
• Neutral Citation: JM 1994 CA 44
• Docket Number: Civil Appeal 61 of 1994
• Court: Court of Appeal (Jamaica)
• Date: 29 July 1994

Court of Appeal

Carey, J.A.

Wright J.A.

Gordon, J.A

Civil Appeal 61 of 1994

Bank of Jamaica

and

Dextra Bank and Trust Company Limited

Appearances:

Dr. Kenneth Rattray, Q.C.; David Muirhead, Q.C. and Douglas Leys for the appellant

Richard Mahfood, Q.C.; Dennis Goffe, and Miss Susan McGhie for respondent

Practice and Procedure - Stay of proceedings — Appeal against refusal of application for stay — The defendant applied for a stay of proceedings pending criminal proceedings — Defendant contended that there was considerable overlap between the instant case and the criminal proceedings and the trial about to commence should be halted until those proceedings were completed — Whether the trial judge was correct in refusing the application — Finding of the court that the trial judge correctly exercised his discretion — Trial judge balanced the interests of the parties — No potential danger to B.O.J. because they were not defendants in the criminal proceedings.

Carey, J.A.

1 On March 11 1993, the present respondent, Dextra Bank and Trust Co. Ltd. (DB), a Caymanian Bank, filed a writ against Bank of Jamaica, the central bank of this country (BOJ), claiming the sum of US$3M on a promissory note dated January 20, 1993, and interest thereon. By an amendment to the statement of claim on September 30, 1993, a claim for conversion of its cheque was added to recover the face value of the cheque was added to recover the face value of the cheque, that is, US$2,999M. As well, there was an alternative claim in that sum for monies had received. The appellant put in a defence whereby, as to the original claim, it averred that one of the signatures on the promissory note was a forgery and the other signatory was not authorized to sign the said note on its behalf. Further, it pleaded that the Caymanian Bank “through its negligence facilitated or caused the said forgery and fraud to be perpetrated on DB.” With respect to the second claim, it was pleaded that BOJ changed its position for reasons particularized in the defence and further averred that it was a bona fide purchaser for value without notice of any claim or interest by DB in the amount claimed. The respondent duly filed a reply. Further and better particulars were lodged by DB and interrogatories were administered on either side. An order for speedy trial was obtained by DB and confirmed on appeal to this court.

2 The matter came on for trial before Paul Harrison, J. on June 6, 1994. this was better that deliberate speed: it was simply breath-taking in light of the fact that the interlocutory stages included a side awing through the Court of Appeal at the instance of the appellant which had sough to have the order for the speed trial set aside. It then applied for a stay of the proceedings pending criminal proceedings which It is alleged arose out of the same transaction and which had been instituted. By an order dated June 7, 1994, the judge refused the application for stay.

3 The appeal is taken against the refusal. The application for stay was requested on the footing that because of the considerable overlap between the instant case and criminal proceedings which had been initiated, the trial of the action then about to commence should be halted, pending the completion of those criminal proceedings. The essence of Dr. Rattray's submission was that with respect to applications for stay where there was an overlap between concurrent civil and criminal proceedings, the fundamental consideration was public policy in the administration of criminal justice. In exercising its discretion, the court must take into account all relevant factors and was not to be restricted by the fact that a defendant in the civil case was not a party to the criminal proceedings. As illustrations of relevant factors, he urged that the hearing of the civil case could give rise to adverse publicity to the prejudice of the defendants in the criminal trial. The shutting out of evidence which would otherwise be available to BOJ because of the rule of confidentiality after a criminal trial constitutes a prejudice to BOJ in the present civil proceedings. Further, it was said that there was a possibility of a carriage of justice in the criminal trial by reason of the prior civil proceedings because of the opportunities for fabrication of evidence or interference with witnesses in the criminal proceedings.

4 These arguments were presented against a background of facts contained in two affidavits of Randolph Dandy, the principal legal cer on the staff of BOJ. From the first affidavit, the following is emerge:

• (i) the issue of an alleged loan which took the form of a cheque for US$2.9M is the subject of it fraud, is a live issue;

• (ii) there is a report that Orville Beckford was arrested and charged for fraud in respect of the promissory note (which will not be an issue in the civil trial) because the respondents have intimated that claim will no longer be pursued;

• (iii) as a result of reports made by BOJ to the police, investigations were initiated; warrants have been issued for the arrest of two other persons, viz. John Wildish and Michael Phillips;

• (iv) police investigations disclose that a substantial part of Jamaican dollar, proceeds of DB's cheque, was lodged to the account of Troy Megill. Jamaican dollar cheques issued as part of the payment for DB's cheque sand drawn by Richard Jones and Wycliffe Mitchell on their accounts in BOJ were lodged to the accounts of Michael Phillips and John Wildish.”

5 The second affidavit adds no significant fact. Some general comments to be made at this stage with respect to the contents of these affidavits. Whatever may be the charges in respect of which warrants have been issued for the arrest of John Wildish and Michael Phillips, which led to the arrest of Orville Beckford, this court has not made privy to them. The nature of the prejudice to team as defendants which might be caused by adverse publicity is unknown. Certainly, no complaint in this regard is being made in the affidavit any of those defendants. Nothing in the affidavit provides any basis whatsoever for asserting that the opportunities for fabricating evidence or interference with witnesses exists: that is the merest speculation.

6 It might be helpful at this stage if I stated the law applicable to the matter before the court. I can conveniently begin with Smith v. Selwyn [1914–15] All E.R. Rep. 229. There Swinfen Eady, L.J. at page 232 said this:

“It is now well established that, according two the law of England, where injuries are inflicted on that civil rights of an individual under circumstances which constitute a felony, that cannot be made the foundation of a civil action at the suit of the person injured against the person who inflicted the injuries until the latter has been prosecuted or a reasonable excuse shown for his non-prosecution.”

7 He relied on dicta dating back to 1827 in Stone v. Marsh (1827) 6 B & C 551 by Lord Tenterden and by Cockburn, C.J. in, Wells v. Abrahams (1927) L.R. 7 Q.B. at page 557 who said:

“No doubt it has been long established as the law of England that where an injury amounts to an infringement of the civil right of an individual, and at the same time to a felonious wrong, the civil remedy — that is, the right of redress by action — is suspended until the party inflicting the injury has been prosecuted.”

8 At this early stage of the development of the principle, it seems that the court was concerned to ensure that the victim of the injury (which gave rise both to a civil action and constituted a crime (a felony)) did nothing which prevented or stifled prosecution. Thus he was not permitted to abstain from prosecuting the offender by receiving his property back, no questions asked. It was the duty of the victim of a felonious act to prosecute the offender before seeking redress by civil action. See Wells v. Abrahams (supra). The application for the stay in Smith v. Selwyn (supra), it should be noted, was the defendant who had not been charged for the rape or attempted rape of the plaintiff in the action. A stay was granted. The basis on which it was granted was that the right to maintain action is suspended until the offender has been prosecuted or a reasonable excuse proffered for the failure to prosecute. The public policy involved is that public law must take precedence over private law.

9 The rule stated in Smith v. Selwyn (supra) was confined to facts which constituted a felony and also amounted to a tort. It did not embrace circumstances which amounted to a misdemeanour. See Carlisle v. Orr (1917) 2 I.R. 534; Fissington v. Hutchinson (1866) L.T. 390. The distinction between felonies and misdemeanours has been abolished in England, but the rule in Smith v. Selwyn nonetheless remains as reformulated in Jefferson Ltd. v. Bhetcha [1979] 2 All E.R. 1108 where it was held that the court controlling the proceedings in a civil action had a discretion under section 41 of the Supreme Court of Judicature (Consolidation) Act, 1925 to stay the proceedings if it appeared to the court that the justices between the parties so required having regard to concurrent criminal proceedings arising out of the same subject matter. The situation in some states in Australia where there yet remains the distinction as is the case in this country, is that there courts have taken a robust view of the matter and ignore the distinction as being of significance. In this country, where the distinction has only historical interest and no practical significance, I would suggest that a court in considering a stay of a civil action where there are concurrent criminal proceedings should likewise ignore entirely the categorization of felonies and misdemeanours. I would state the rule thus — the court in the exercise of its inherent jurisdiction to control its own proceedings is required to balance justice...