Century National Bank Ltd v Jamaica Grande Ltd et Al
| Jurisdiction | Jamaica |
| Judge | Wolf, C.J. |
| Judgment Date | 13 February 1997 |
| Docket Number | E414 of 1996 |
| Court | Supreme Court (Jamaica) |
| Date | 13 February 1997 |
Supreme Court
Wolfe, C.J.
E414 of 1996
Michael Houlton, Q.C., Peter Goldson and Miss Minette Palmer for the applicant instructed by Messrs. Myers, Fletcher & Gordon.
Robert Baugh and Mrs. Verietta Green for first respondent.
Mrs. Angela Hudson Phillips, Q.C., and Dr. Adolph Edwards for the second respondent instructed by Adolph Edwards & Co.
Lord Gifford, Q.C., Leon Green & Audley Foster for the third respondent instructed by Miss Marjorie Brown.
Winston Spaulding, Q.C. and Charles Piper for the fourth respondent instructed by Piper and Samuda.
Lennox Campbell, Senior Assistant Attorney General, Miss Nicole Foster and Miss Marsha Dunbar for the fifth respondent, instructed by the Director of State Proceedings.
Mrs. Pamela Benka Coker, Q.C. and Ransford Braham for the sixth respondent instructed by Messrs. Livingston, Alexander & Levy.
Company law - Shares — Motion was filed for various orders from the court — Declaration of the true legal and/or beneficial owner of the 1,100,040 shares in the capital of JGL which stood in the name of the second respondent — Rectification of the register of members of JGL pursuant to Section 115 of the Companies Act by striking out the name of the second respondent as the holder of the shares or part thereof and by inserting in lieu the name or names of the true owner — Notice of rectification, if any, be given to the Registrar of Companies — Decision that the applicant, CNB Ltd., was the legal and beneficial owner of the 1,100,040 shares in the capital of the first respondent, JGL.
This motion filed on the 20th day of September, 1996, prays the following orders from the court.
- It be declared who is the true legal and/or beneficial owner of the 1,100,040 shares in the capital of Jamaica Grande Limited now standing in the name of the second respondent, or part thereof. 2. If necessary in consequence of such declaration, the Register of Members of Jamaica Grande Limited be rectified pursuant to section 115 of the Companies Act, by striking out the name of the second respondent therefrom, as the holder of the said shares or part thereof and by inserting in lieu thereof, the name or names of the true owner. And that the applicant be authorised to effect the necessary alterations in the said Register for carrying such orders into effect. 3. Notice of such rectification, if any, be given to the Registrar of Companies. 4. There be such order as the court shall seem fit. 5. Costs of the application to the applicant.
When this motion came up for hearing on the 7th day of January, 1996, the sixth respondent was not a party to the motion. On January 8, 1997, Mrs. Benka-Coker applied to have the sixth respondent added as a respondent. The parties consented to the application and the court pursuant to section 100, of the Judicature (Civil Procedure Code) Law, ordered the sixth respondent to be added as a respondent.
Lord Gifford, Q.C., by way of a preliminary objection, submitted that the Motion instituted by the applicant, Century National Bank Ltd., was not properly instituted, in that it, vas done without the lawful authority of the Board of Century National Bank Ltd., by the temporary Manager of the Bank, who lacked the necessary authority, so to do.
The court dismissed the objection as being without merit and ordered that the hearing of the motion be proceeded with.
By letter dated July 10, 1996, tile Honourable Minister of Finance appointed Mr. Richard Downer to be his agent in the capacity of Temporary Manager of the Century Financial Entity. This Entity includes the applicant and the second and fourth respondents. The Minister's action wary taken pursuant to section 25(3)(c) of the Banking Act 1992, Section 25(3)(c) of the Financial Institutions Act 1992 and Regulation 64(d) of the Bank of Jamaica (Building Societies) Regulations, 1995.
The affidavit evidence of Richard Downer in support of the motion discloses that the first named respondent was incorporated on the 15th day of February, 1991, uncles the Companies Act, as a company limited by shares, with a share capital of $2,500,000 divided into 2,500,000 (ordinary and “B” shares) shares of $1.00 each, of which 1,224,998 ordinary and 1,000,000 “B” shares (amounting to 2,224,998 shares) have been issued and are fully paid up, and with the objects set forth in the Memorandum of Association, thereof. I will not dilate upon the differences between the rights attaching to the classes of spares, as such differences are not germane to the issues which arise for determination.
The third respondent was incorporated on the 25th day of June, 1992 and acquired shares in the applicant bank, the second respondent bank and the fourth respondent building society. It should be noted thin prior to June 25, 1992, the majority shares in the Merchant Bank, the second respondent, were owned by the applicant.
Donovan Crawford and Valton Cable Williams were both directors of the applicant, the second respondent, the third respondent and the fourth respondent. Crawford, both personally and through another company controlled by him, owned a majority of the shares in the third respondent and through the third respondent controlled the applicant, the second respondent and the fourth respondent.
The Register of Members of the first respondent contains two entries dated May 20, 1991, which record the applicant as being a shareholder of the first respondent holding 1,100,040 shares in the share capital. of the first respondent. The entries were amended by crossing out the name of the applicant and substituting the name of the second respondent.
The Return of Allotments dated October 1, 1991, and filed at the Office of the Registrar of Companies shows that the applicant was allotted 766,706 ordinary shares and 333,334 “B” shares, amounting to 1,100,040, on the fourth day of May, 1991.
By a document entitled “Amended Return of Allotments” dated March 8, 1993 and filed in the Office of the Registrar of Companies, a return of allotment of shares in the first respondent is described as having been made on May 20, 1991 for the salve number of shares and to the same parties as the First Return of Allotments but for the fact that one ordinary spare was allotted to Basil Anthony Parker and Judith Ann Davis and the second respondent is referred to as the entity to which the shares are allotted instead of the applicant.
It is to be observed that no explanation appears ill the Register of Members of the first named respondent nor in the Minute Books of the Meetings of the Board of Directors of the said respondent, of the applicant or of the third respondent, for the crossing out of the applicant's name in the Register of Members of the first respondent: and there is no record of any transfer of the said shares having been proffered, received or accepted by the first respondent, nor noted in any of its records. Further, no explanation for the substitution of the second respondent's name appears on the Amended Return of Allotments or anywhere else among the records of the first respondent at the Office of the Registrar of Companies.
Against this background, the applicant contends that there can be no doubt that the original allotment of the 1,100,040 shares was made to the applicant and that the applicant is the legal owner of the said shares. In this contention, the applicant is supported by the first, fifth and sixth respondents.
The second respondent claims the legal and beneficial ownership of the share and in so doing contends that at all material times it was intended to allot the shares to the second respondent and this was made clear to all and sundry present at the meeting of May 4, 1991, when the shares were allotted. The purported allotment to the applicant, says the second respondent, came about by the error of the person recording the minutes of the meeting. When the error was discovered the draft minutes of the amended to reflect the true intention of the meetings of May 4, 1991. Consistent with that amendment the Return of Allotment and the Register of Members were accordingly amended. The third and fourth respondents support the claim of the second respondent.
The question which I mull now resolve is whether the allotment of shares on May 4, 1991, was intended for the applicant or for the second respondent. I bear in mind that it is the second respondent, who is alleging that there was an error and it is my view the burden of so proving rests upon the second respondent.
In support of its claim, the applicant relies upon the evidence of Horace Peter Myers, an attorney-at-law, Nikolas Eastwick-Field, a senior Vice President of Renaissance International Inc., one of the original and existing shareholders in the share capital of the first respondent, Fred Kassner, one of the original and existing shareholders in the share capital of the first respondent and also the surrounding circumstances.
Horace Peter Myers, who was cross-examined on his affidavit evidence asserts that lie was present at the first meeting of the Board of Directors of the first respondent, held on May 4, 1991. In fact, he performed the role of Recording Secretary and made a draft of the Minutes of the Meeting. He further asserts that, to best of recollection there was no reference made of second respondent. The reference at that meeting was to the applicant, Century National Bank Ltd. or “to the Bank,” and that he understood the Bank to mean, the Century National Bank Ltd. At paragraph 10 of the Draft Minutes the following is recorded.
“10. Bankers
It was resolved that the Century National Bank Ltd. - be appointed bankers of the company in accordance with the Resolutions, copies of which are attached to these...
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