Ciboney Group Ltd, Ciboney Hotels Ltd and Luxury Resorts International Ltd v Neuson Ltd, Ivor Alexander, Peter Rousseau, Francisco Soler - John Ross, Baang Ltd and Redoz Ltd

• Jurisdiction: Jamaica
• Judge: CORAM: WOLFE C.J.
• Judgment Date: 15 July 1999
• Judgment citation (vLex): [1999] 7 JJC 1501
• Court: Supreme Court (Jamaica)
• Docket Number: SUIT NO. CL C073 OF 1998
• Date: 15 July 1999

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN COMMON LAW

SUIT NO. CL C073 OF 1998

BETWEEN

CIBONEY GROUP LIMITED

1 ^ST PLAINTIFF

CIBONEY HOTELS LIMITED

2 ^ND PLAINTIFF

LUXURY RESORTS INTERNATIONAL LIMITED

3 ^RD PLAINTIFF

AND

NEUSON LIMITED

1 ^ST DEFENDANT

IVOR ALEXANDER

2 ^ND DEFENDANT

PETER ROUSSEAU

3 ^RD DEFENDANT

FRANCISCO SOLER

4 ^TH DEFENDANT

JOHN ROSS

5 ^TH DEFENDANT

BAANQ LIMITED

6 ^TH DEFENDANT

RADOX LIMITED

7 ^TH DEFENDANT

INJUNCTIONS - Interlocutory - Whether first defendant entitled to enforce promissory note - Whether promissory note null and void - Whether mortgage procured by fraud - Whether 2nd, 3rd, 4th and 5th defendants acted improperly and in breach of fiduciary duty

CORAM: WOLFE C.J.

1 On the 20th day of February 1998, Mr. Justice Smith granted an Exparte Injunction ordering as follows:

"That the First Defendant by itself, its directors, officers or otherwise be restrained from appointing a receiver of the First or Second Plaintiff or from taking any step to enforce any security held by it of the First or Second Plaintiff in relation to the Plaintiffs' indebtedness."

2 The Plaintiffs now seek an interlocutory injunction to have the exparte order remain in force until the trial of the substantive action.

3 To place the application in its proper perspective, I set out below extracts from the amended Writ of Summons.

4 The Plaintiffs claim:-

• 1. Against the First Defendant: -

  • (a) A declaration that the First Defendant is not entitled to enforce promissory note purportedly dated September 30, 1996, drawn by Flexon Limited in favour of the First Plaintiff and purportedly endorsed by the First Plaintiff to the First Defendant on the said date.

  • (b) A declaration that the said promissory note and/or the endorsement thereof to the First Defendant is null, void and unenforceable.

  • (e) A declaration that the guarantee mortgages and debentures held by the First Defendant in respect of alleged indebtedness of the Third Plaintiff to the First Defendant were procured by fraud and/or are unenforceable, null and void, in that the said securities were to the actual or constructive knowledge of the First Defendant, executed and registered by, or on the instructions of, the Second Defendant without the knowledge or authority of the First and Second Plaintiffs.

  • (f) Alternatively if, which is not admitted, the issuance of the said securities were duly authorised, a declaration that in authorising the issue of the said guarantee, mortgages and debentures, the directors of the First and Second Plaintiffs, particularly the Second, Third, Fourth and Fifth Defendants to the actual or constructive knowledge of the First Defendant, acted improperly and in abuse of their powers as directors and in breach of fiduciary duty and with intention of benefiting the First Defendant, a company beneficially owned or controlled by the Second and Third and/or Fourth Defendants or with which those Defendants have a close connection, to the detriment of the First and Second Plaintiffs."

5 These extracts make it abundantly clear that the plaintiffs have alleged fraud as the basis of their claim against the first defendant. The allegation of fraud arises in that the second and third defendants who were directors of the first and second plaintiffs in abuse of their powers acted in breach of their fiduciary duties to the benefit of the first defendant, which they beneficially owned or controlled along with the fourth defendant.

6 In considering this application I bear in mind the key principles derived from the speech of Lord Diplock in American Cynamid Co. v Ethicon Ltd. [1975] AC 396 , in particular the following -

• "(a) that the grant of an interlocutory injunction is a remedy that is both temporary and discretionary;

• (b) that the evidence available to the Court at the hearing of the application for an interlocutory injunction is incomplete. It is given on affidavit and has not been tested by oral cross-examination.

• (c) It is no part of the Court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavits as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law...