Capital and Credit Merchand Bank Ltd v Lenbert Little-White and Another

• Jurisdiction: Jamaica
• Judge: Mangatal J
• Judgment Date: 02 November 2012
• Court: Supreme Court (Jamaica)
• Docket Number: CLAIM NO. 2012 CD 00004
• Date: 02 November 2012

[2012] JMCC Comm 14

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

CLAIM NO. 2012 CD 00004

Between:

Capital and Credit Merchant Bank Limited

Claimant

and

Lenbert Little-Shite 1st

Defendant

and

Cheryl Ryman 2nd

Defendant

Ms. Taneisha Brown instructed by Henlin Gibson Henlin for the Claimant.

Mr. Daniel Chacko-Wilmot and Mrs. Sasha Vacianna-Riley instructed by Vacianna & Whittingham for the Defendants.

Civil practice and procedure — application to set aside default judgment — whether court process personally served — whether proposed defence shows real prospect of successfully defending claim

IN CHAMBERS

Mangatal J

1 The Claimant Capital and Credit Merchant Bank Limited ‘CCMB’ is a limited liability company which offers banking services to the public.

2 The Defendants are and were at all material times, directors of Orange Valley Holdings Limited ‘the Borrower’. CCMB loaned the Borrower the sum of $17,000,000.00. The loan was disbursed in 2009. By a Joint and Several Guarantee in writing dated August 17, 2009, and in consideration of CCMB granting the loan facility to the Borrower, the Defendants irrevocably and unconditionally guaranteed the payment of all principal and interest and other amounts due or owing or to become due and owing by the borrower to CCMB ‘or remaining unpaid by the Borrower to the Claimant’.

3 In its Particulars of Claim, CCMB states that under the terms of the Joint and Several Guarantee, it was agreed, amongst other things that:

1

The Guarantee shall apply to and secure the balance due or remaining unpaid to the Claimant under the Agreement [between the Claimant and the Borrower] 2. The liability of the Guarantors is that of principal debtor as between the Guarantor Defendants and the Claimant. 3. The Guarantor Defendants' liability to make payment under the Guarantee arises forthwith after demand for payment has been made in writing and is personally delivered or sent by registered post. 4. Upon default in payment of principal and interest owing by the Borrower, the Claimant may treat guaranteed liabilities as due and payable and to be forthwith collected. 5. The written statement of an Attorney-at-Law acting on behalf of the Claimant as to unpaid amount by the Borrower shall be conclusive evidence and prima facie evidence against the Guarantor Defendants as to the amount remaining unpaid to the Claimants. 6. It would constitute an event of default for the Borrower to default in payment of any amount payable when it falls due.

4 The Borrower defaulted and failed and/or neglected to repay the sums outstanding and interest that had accrued due. Pursuant to the Guarantee, CCMB states that they made a formal demand on the Defendants requiring them to make good upon their obligations under the Guarantee. CCMB claims that the Defendants failed, refused and or neglected to honour their obligations under the Guarantee and are liable to CCMB.

5 CCMB filed Suit against the Defendants, and filed Affidavits attesting to service on the Defendants of the required Court process. In default of the Defendants acknowledging service, CCMB entered default judgment on the 9th of February 2012, a day after acknowledgement of service would have been due.

6 By Notice of Application for Court Orders filed April 24 2012 the Defendants have applied to set aside a Default Judgment entered against them as follows:

1

That the Judgment entered in default of Acknowledgement of Service and Defence granted by this Honourable Court on the 9th of February 2012 and all consequent proceedings, including any order for Seizure and Sale, and any processes in execution of the Judgment be set aside and the matter proceed to trial on the merits. 2. That the Defendants be at liberty to file a Defence within 7 days of the date of the Order made on this Application. 3. Such further and other … relief as this Honourable Court may deem just. 4. Costs of, and incidental to this application be costs in the claim.

7 The stated grounds for the application are as follows:

1

The Default Judgment was not properly entered as neither of the Defendants/ Applicants was properly served, or was served at all, with the Claim Form and Particulars of Claim. 2. In the alternative, the Defendants/ Applicants have a reasonable prospect of successfully defending the claim. 3. The Defendants / Applicants have applied to the court as soon as was reasonably practicable after finding out that judgment has been entered. 4. The Defendants/ Applicants have given a good explanation for the failure to file an Acknowledgement of Service. 5. Rules 26.8 of the Civil Procedure Rules 2002. 6. That it is just to do so.

8 There were 5 Affidavits filed on behalf of the Defendants, i.e. the Affidavit of Lennie Little-White, sworn to on the 24th April 2012, the Affidavit of Camille Richards, sworn to on the 24th April 2012, the Affidavit of Clifton Gallimore, sworn to on the 11th May 2012, and the Affidavits of Devon McAnuff and Donovan Haughton, both sworn to on the 14th May 2012. However, only Mr. Little-White and Miss Richards came to Court and were available for cross-examination, even though it was understood that the other affiants would be required for cross-examination, based upon Notice of that intention filed on behalf of CCMB, and so I attach no weight to the Affidavits of Gallimore, McAnuff, and Haughton and will disregard them.

9 On behalf of the Claimant, a number of Affidavits were referred to and relied upon, being the Affidavit of Service of the First Defendant, sworn to by process server Canute Ashmead on the 30th January 2012, Affidavit for Approval of Alternative Method of Service (on Second Defendant), sworn to on January 30 2012, again sworn to by Canute Ashmead,(these being the Affidavits filed prior to the entry of the default judgment), the Affidavit of Canute Ashmead in Response, sworn to on the 16th May 2012, Affidavit of Tanya Campbell, sworn to on the 16th of May 2012, and the Affidavit of Taneisha Brown, sworn to on the 16th May 2012. Only Mr. Ashmead was required by Counsel for the Defendants for cross-examination, and he attended and was cross-examined.

THE ENTRY OF DEFAULT JUDGMENT

10 On the 9th of February 2012 judgment was entered against both Defendants in default of Acknowledgement of Service for the specific sum of $15,033,287.73 plus interest at the rate of 6% per annum. It was Mr. Ashmead's evidence that he served as process server in this matter. He states that he served the Claim Form and Particulars of Claim and other required documents on the 1 ^st Defendant Lennie Little-White at 16 South Avenue, Kingston 10, in the Parish of Saint Andrew on the 24th of January 2012 at approximately 3:35p.m. He states that upon inquiry, the 1 ^st Defendant was pointed out to him by Mr. Little-White's secretary Camille Richards, and the 1 ^st Defendant admitted that he was the person Mr. Ashmead was enquiring about. It is Mr. Ashmead's evidence that in his presence the 1st Defendant gave instructions to Camille Richards to accept the documents from him. Thereafter he claims to have seen Camille Richards pass the documents to the gentleman who identified himself as Lenbert Little-White. Mr. Ashmead states that Lenbert Little-White was not known to him before, but when asked he admitted to being the 1st Defendant herein and he was also pointed out to him by his secretary Camille Richards. Mr. Little-White accepted the documents.

11 The learned Master also approved the alternative method of service on the 2nd Defendant set out in the Affidavit for Approval of Alternative Method of Service. In that Affidavit Mr. Ashmead stated that he served the 2 ^nd Defendant by leaving the Claim Form and Particulars of Claim and other documents by leaving them with the 1 ^st Defendant Lenbert Little-White in paragraph 3 he states, ‘upon her instructions to do so’. Mr. Ashmead further states that he effected service on the 2 ^nd Defendant by leaving the documents with the 1 ^st Defendant, who also works with the 2 ^nd Defendant at 16 South Avenue, Kingston 10, in the Parish of Saint Andrew. Mr. Ashmead avers that Mr. Little-White advised that he would ensure that the documents come to the attention of the 2 ^nd Defendant.

12 At paragraphs 4-6 Mr. Ashmead states that he so served the documents at 16 South Avenue, Kingston 10, St. Andrew, on the 24 ^th of January 2012 at approximately 3:35 p.m. At paragraph 8 Mr. Ashmead states that he verily believes that this method of service was sufficient to enable the 2nd Defendant to ascertain the contents of the documents on January 24 2012 or at a date soon thereafter.

THE DEFENDANTS” EVIDENCE IN SUPPORT OF THE APPLICATION TO SET ASIDE THE DEFAULT JUDGMENT

13 An Acknowledgement of Service was filed on behalf of the Defendants on the 29th of May 2012. In that Acknowledgement it was stated that the Claim Form and Particulars of Claim were received on February 16 2012. I note that this Acknowledgement was filed on behalf of both Defendants. It is therefore not completely accurate to say, as Mr. Little-White has, in his subsequent Affidavits and submissions that, since the 2nd Defendant does not work at the Office at 16 South Avenue, Kingston 10, but works at an office located at 4 Beresford Close, Red Hills, (at an address which the Defendants say that the Claimant knew to be her address for service), serving the documents on the 1 ^st Defendant does not properly constitute an adequate alternative method of service on, and was not sufficient to enable the 2 ^nd Defendant to ascertain the contents of the documents. I note that to date, there has been no Affidavit sworn to by Cheryl Ryman herself, even though an Acknowledgement of Service has been filed on her behalf. The most that can be gleaned is that the 1 ^st Defendant is suggesting that the 2 ^nd Defendant was unable to ascertain the...