Citrus Development Company Ltd v Development Bank of Jamaica Ltd

• Jurisdiction: Jamaica
• Judge: P Williams JA,Phillips JA,Straw JA
• Judgment Date: 20 December 2018
• Neutral Citation: JM 2018 CA 46
• Date: 20 December 2018
• Docket Number: APPLICATION NOS 158 & 159/2017
• Court: Court of Appeal (Jamaica)

[2018] JMCA App 41

IN THE COURT OF APPEAL

Before:

THE HON Miss Justice Phillips JA

THE HON Miss Justice P Williams JA

THE HON Miss Justice Straw JA (AG)

APPLICATION NOS 158 & 159/2017

Between

Citrus Development Company Limited

Applicant

and

Development Bank of Jamaica Limited

Respondent

Miss Carol Davis and Ms Gillian Mullings instructed by Naylor & Mullings for the applicant

Mrs Tana'ania Small Davis, Mrs Kerri-Ann Allen Morgan and Adam Jones instructed by Livingston Alexander & Levy for the respondent

Civil practice and procedure - Application for stay of execution of judgment pending appeal — Extension of time within which to file Notice of appeal — Whether there was a real chance of success — Errors of the trial judge in relation to findings on the claim.

Phillips JA

1 I have read in draft the judgment of my sister Straw JA (Ag). I agree with her reasoning and conclusions and have nothing further to add.

P Williams JA

2 I too have read the draft judgment of my sister Straw JA (Ag) and agree with her reasoning and conclusion.

Straw JA (AG)

3 In these applications, both filed on 30 August 2017, Citrus Development Company Limited (the defendant in the court below, “CDCL”) applied for: (i) a stay of the execution of the judgment of Laing J (the learned judge) made on 28 March 2017, pending the hearing of its appeal; (ii) permission to appeal the said judgment; and (iii) an extension of time within which to file notice of appeal (which ought properly to have been and taken to be a request for an extension of time to file the application to seek permission to appeal).

4 Laing J had refused to set aside the default judgment, which was entered against CDCL and had further disallowed CDCL's application for its defence which was filed out of time to be regularised.

Background

5 On 7 April 2016, the Development Bank of Jamaica Limited (being the claimant in the court below, “DBJ”) claimed against CDCL the sum of $113,389,035.49 and interest thereon pursuant to a written guarantee dated 8 May 2007. In its particulars of claim, DBJ alleged that CDCL had “guaranteed the payment of Seventy Million Dollars ($70,000,000.00) and any future indebtedness” by Jamaica Citrus Growers Limited which it held with DBJ. DBJ claimed that on 3 April 2007, it had approved a loan (“loan 1”) to the Jamaica Citrus Growers Limited in the amount of $70,000,000.00 under a letter of commitment dated 4 April 2007 (as amended by letter dated 23 April 2007), both documents constituting the loan agreement. A second loan in the sum of $60,000,000.00 was also disbursed pursuant to an agreement dated 2 September 2009 (“loan 2”).

6 DBJ claimed that Jamaica Citrus Growers Limited had defaulted on the repayment of the loans. A demand was made on CDCL pursuant to the terms of the guarantee, by letter dated 4 March 2013, for the sum of $53,389,035.69 which was stated to be the outstanding principal and interest of $28,634,243.30 accrued as at 28 February 2013. CDCL failed to satisfy the demand and as a result, a suit was filed.

7 On 25 November 2016, default judgment was entered against CDCL on the basis that it had not filed a defence. It was ordered that DBJ recover against CDCL:

• “1. The principal sum of $113,389,035.49;

• 2. Interest on the principal sum at the contractual rate accrued in the sum of $31,557,175.21 as at 25 November 2016 and continuing thereafter until payment at a daily rate of $27,415.57;

• 3. Court fees on claim of $2,000.00;

• 4. Attorney's fixed costs on issue of $10,000.00;

• 5. Attorney's fixed costs on entering judgment of $14,000.00.”

8 By notice of application filed on 9 December 2016, CDCL applied to set aside the default judgment and sought to regularise its defence filed on 25 November 2016. The learned judge dismissed the application, having rejected CDCL's contention that its proposed defence had a real prospect of success.

9 On 4 April 2017, CDCL filed a notice of appeal from the judgment of Laing J. On 18 May 2017, DBJ filed a preliminary notice of objection to the notice of appeal, on the basis that permission to appeal was in fact required. Consequently, at a case management conference held on 20 June 2017, a single judge of this court upheld the preliminary objection and struck out the notice of appeal which had been filed.

10 On 28 April 2017 and 24 May 2017, respectively, CDCL filed in the Supreme Court notices of application for: (i) a stay of the execution of the judgment of Laing J; and (ii) permission to appeal the said judgment. Both applications were heard together on 26 May 2017, by Laing J. Ms Sheron Henry, General Manager for legal services at the DBJ, in her affidavit sworn on 23 October 2017, and filed in opposition to the application for permission to appeal in this court, deposed that the above-mentioned application for permission to appeal in the Supreme Court was withdrawn by CDCL. However, it is noted that in the formal order dated 26 May 2017, the learned judge had refused to grant a stay of execution and had also refused permission to appeal.

11 Following from that refusal, on 19 June 2017, counsel for CDCL filed another application for leave to appeal in the Supreme Court. At the hearing of that application on 14 July 2017, before Laing J, counsel for CDCL sought orally to vary the application to include a request for an extension of time within which to file the application. The learned judge granted the extension of time within which to make the application but refused permission to appeal.

12 The applications now before this court for determination. having been filed on 30 August 2017, would have been filed over four weeks outside the period stipulated in rule 1.8(1) of the Court of Appeal Rules (CAR). CDCL would therefore require an extension of time to bring the application for permission to appeal.

13 The grounds set out in the applications were essentially the same. It was prayed that the applications be granted on the basis that the proposed appeal has a real chance of success. Also, in relation to the application for a stay of execution, CDCL asserted that DBJ, in proceeding to act on the judgment, had obtained a final charging order in respect of land belonging to CDCL. It was averred that the applicant would face ruin and the viability of the Jamaica Citrus Growers Limited would be threatened if the stay was not granted. These factors, counsel, Mrs Carol Davis, submitted, shifted the balancing exercise in favour of a stay being granted.

14 These were the grounds (as set out in the application for a stay of execution) on which CDCL relied to demonstrate that it had a real chance of success in the appeal:

• “i) The Learned Judge erred in looking at the calculations of the judgment debt and interest thereon which were patently wrong on the face of the Particulars of Claim and later on the face of [Marc] Johnson's Affidavit (officer of the Claimant) dated February 6 ^th 2017 based on provisions of the loan documentation.

• ii) There are clear and evident errors in the calculations of the Claim on the face of their pleadings and this case begs for an accounting of that [which] was collected and for the true interest to be calculated as per the law.

• iii) The Learned Judge erred in considering that the guarantee extended to loan 2 in circumstances where the said loan was granted without notice to the Appellant and in circumstances where at the material time the 1st Loan was already in default.

• iv) The Learned Judge erred in that he concluded in his judgment that the modern approach was that ‘the normal rules of contractual conclusion apply to written guarantees’ but failed to apply the law in respect to [the] true construction of the contract.

• v) The Learned Judge erred in that he made a determination as to the proper construction of the contract and as to the intention of the parties with respect to same in circumstances where there was material dispute between the parties as to the true construction of the guarantee and in particular as to whether the 2 ^nd Loan was intended to be covered by guarantee.

• vi) The Learned Judge erred in that the 2 ^nd loan agreement dated 2 ^nd December 2009 at paragraph 11.1 the parties specified the specific securities to be taken and did not at any time specify the guarantee mortgage as one of the securities in relation to the 2 ^nd loan.

• vii) The Learned Judge erred in that he considered the limitation period for the repayment of the monies to run for a period of 12 years, in circumstances where the period of limitation was 6 years and had expired at the time the Claim herein commenced.

• xii) [sic] The Claim herein was not a claim under the mortgage but a claim pursuant to the guarantee, and the Learned Judge erred in concluding that the relevant limitation period was 12 years as for a claim under the mortgage.

• iix) [sic] The Learned Judge erred in concluding that the limitation period for loan 1 had not expired. The loan was made in May 2007 and the last payment was made in July 2008, and thereafter no further payments were made. The Claim herein was made in April 2016 at which time the Limitation Period on the loan had expired. The Guarantee provided was for repayment of the sums due on the loan, and in circumstances where the loan was statute barred no sum would have been due pursuant to the guarantee.”

15 In the affidavit in support of the application for permission to appeal sworn on 30 August 2017, Mr John Thompson, the chairman and director of CDCL, averred that a notice of appeal had been filed in this court under the mistaken view that permission to appeal was not required. He stated that that misconception had resulted in the delay in seeking permission to appeal in the court below. The learned judge having refused permission to appeal, Mr Thompson attributed the delay in filing the application for permission to appeal in this court to counsel in...