David Wong Ken and Others v National Investment Bank Jamaica Ltd
| Jurisdiction | Jamaica |
| Judge | Sykes J |
| Judgment Date | 16 March 2012 |
| Neutral Citation | [2012] JMSC Civ 32 |
| Docket Number | CLAIM NO. 2006/HCV-1847 |
| Court | Supreme Court (Jamaica) |
| Date | 16 March 2012 |
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[2012] JMSC Civ 32
CLAIM NO. 2006/HCV-1847
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
FIDUCIARY DUTY — BREACH OF FIDUCIARY DUTY — MISFEASANCE IN PUBLIC OFFICE — CONSPIRACY TO INJURE — CAUSATION
Lord Anthony Gifford QC , David Batts , Miguel Williams instructed by Livingston Alexander and Levy for all the claimants
Charles Piper and Marsha Locke for the first defendant
Garth McBean and Teri-Ann Lawson instructed by DunnCox for the second, third and fifth defendant
Michael Hylton QC , Tamara Dickens and Sacha Vaccianna instructed by Vaccianna and Whittingham for the fourth defendant
This claim began with the claimants making very damaging and serious allegations against all five defendants. At the end of the evidence, the first three claimants have given up the pursuit of the defendants. Western Cement Company (“WCC”) is the only claimant left and it claims that:
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(1) National Investment Bank of Jamaica (“NIBJ”) committed
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(i) the tort of misfeasance in public office;
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(ii) conspiracy to injure WCC in its business;
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(iii) breach of fiduciary duty;
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(2) Clarendon Lime Company Limited (“CLCL”) committed the tort of conspiracy to injure WCC in its business;
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(3) Limestone Corporation of Jamaica Limited (“Licojam”) committed the tort of conspiracy to injure WCC in its business;
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(4) Dr Vincent Lawrence committed
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(i) the tort of misfeasance in public office;
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(ii) conspiracy to injure WCC in its business.
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(5) Mr Horace Clarke (now represented in the claim by Miss Kirby Clarke) committed
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(i) the tort of misfeasance in public office;
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(ii) conspiracy to injure WCC in its business.
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Mr Cezley Sampson and Mr Vinroy Gordon were not served and therefore are not a part of this claim.
This judgment is divided into three parts. The first part introduces WCC, Mr David Wong Ken and the first five defendants. The other claimants will only be mentioned where necessary in order to make the narrative more intelligible. The second part will give an overview of the claimant's case theory on each claim. The third part will examine the law, the evidence and state the conclusion in respect of each claim.
Mr. David Wong Ken is an attorney at law. He was a shareholder, director, investor, Chief Executive Officer and at one time Chairman of WCC. Mr. Wong Ken's primary responsibility in this project was to do the legal work associated with (a) the company; (b) acquiring lands; (c) procuring quarrying licences; (d) environmental permits and such like.
WCC is a limited liability company incorporated in 1992 under the Companies Act of Jamaica. Messieurs Koonce and Shakespeare were shareholders and investors in the company. WCC was the commercial vehicle by which the investors in the company were hoping to realise their goal of producing profitably quicklime and cement.
An important person in this case but who is not a litigant is Mr. Robert Cartade. He was a shareholder, director, managing director and investor in WCC. His expertise was his well-acknowledged expertise in managing large scale multimillion dollar business ventures.
The defendants are now introduced. NIBJ, the first defendant, is a company incorporated under the Companies Act of Jamaica and is wholly owned by the Government of Jamaica. Its articles of association indicate, among other things, that it is charged with the responsibility of fostering economic development in Jamaica. NIBJ carried out its functions by making loans to applicants who met the criteria of the bank. It did this oftentimes by taking shares in the company borrowing the money and after a period of time the shares were bought back by the company. In this case, NIBJ's support for WCC's venture took the form of an equity holding in the company which, according to the terms of the investment by NIBJ in WCC, entitled NIBJ to appoint a director to WCC's board of directors. NIBJ's operations, assets and liabilities have now been acquired by another wholly-owned government company, the National Development Bank (“NDB”).
CLCL, the second defendant, is a limited liability company established under the Companies Act of Jamaica. It is a joint venture between a number of juridical persons. It was formed in August 1995 with the objective of producing quicklime. The original shareholders and investors were Licojam, NIBJ, Jamaica Venture Fund Limited (“JVF”), Construction Developers Associates Limited (“CDA”), Clarendon Alumina Production Limited (“CAP”) and NDB. More will be said about these investors.
Licojam, the third defendant, was incorporated in 1982 under the Companies Act of Jamaica. This company was 99.96% owned by Mr. Horace Clarke. It had a 20% stake in CLCL.
Dr Vincent Lawrence, the fourth defendant, an engineer by training, during the relevant period (1995-2001), sat on a number of boards including NIBJ, CLCL and CAP. He sat on the executive committee of Jamalco, a joint venture company in which the Government of Jamaica had shareholdings with Alcoa, a Canadian mining company. CAP held the 50% stake of the Government of Jamaica in Jamalco. Jamalco operated in the bauxite/alumina industry.
Mr Horace Clarke, formerly the fifth defendant, was a former Minister of Government with responsibility for agriculture, mining and minerals. Mr Clarke held ministerial office from January 16, 1995 to late 1997. The bauxite/alumina industry fell under his portfolio. CAP was also part of his portfolio assignment. Mr Clarke owned 99.96% of the shares in Licojam which in turn had a 20% interest in CLCL. Unfortunately, Mr Clarke has now died and his estate is represented by Miss Kirby Clarke, his sister. In these reasons for judgment the court will refer to Mr Clarke and not his sister because it is less likely to lead to confusion.
Other persons and companies will be referred to but they will be introduced at the appropriate point in the analysis.
The allegations against each of the defendants claim will be better understood if the claimant's theory is explained. Messieurs David Wong Ken, Jack Koonce, Shirley Shakespeare and Robert Cartade came together to establish WCC which had as its objective the production of quicklime and ultimately, the manufacturing of cement. Quicklime is used in many industries including the bauxite/alumina and sugar industries.
There were three bauxite companies operating in Jamaica at the material time. These were: (a) Jamalco which operated at Halse Hall, Clarendon; (b) Alpart which operated at Naine in St. Elizabeth and (c) Alcan which operated at Ewarton, St. Catherine, and Kirkvine in Manchester. Of these three companies, Jamalco was the single largest user of quicklime.
All three companies had their own quicklime producing capability but generally they never produced enough to meet their own demand. The quicklime producing factories at these plants were old and tended to breakdown frequently. The companies tended to be chronically short of quicklime and therefore imported the balance of their needs.
WCC's goal, as stated earlier, was to produce quicklime and cement. To this end, it bought land in Maggotty, St. Elizabeth. This land was the site of Revere Alumina Company which had long ceased operating at that location. After purchase, WCC invested heavily in equipment and other material to begin the production of quicklime. WCC obtained loans from a consortium of local banks to finance the project. In 1996, WCC decided that it needed to secure additional funding to complete the plant for production. It sought and obtained a loan from NIBJ. This was the first time WCC was borrowing from NIBJ. WCC made the application in September 1996 and by February 1997 the loan was approved and disbursement in the form of payments to third parties began.
At the time WCC began its investment in this sector, the only other quicklime producer in Jamaica, other than the bauxite/alumina companies was another company known as Chippenham Park. WCC took the view that Chippenham Park was not a serious rival.
When NIBJ made the loan to WCC, it did so by becoming an equity partner (preference shares) in WCC, that is to say, it became a shareholder. Under the terms of the first loan, NIBJ was entitled to appoint a director to the board of NIBJ. This option was not exercised until November 27, 1997, when WCC made a second loan application to NIBJ.
WCC is saying that the first application to NIBJ made two things possible. First, NIBJ was able to acquire critical confidential information about WCC because NIBJ as lender required WCC to submit information which contained its production and marketing strategy (see para. 27 of supplemental witness statement of David Wong Ken dated July 9, 2010). Second, NIBJ had direct and immediate access to the inner workings of WCC as they unfolded by virtue of NIBJ's appointed representative to WCC's board. NIBJ, through its director, would hear, first hand, the discussion of production and marketing strategies; participate in and actually be able to influence the decisions of WCC (see para. 34 — 37 of supplemental witness statement of David Wong Ken dated July 9, 2010)....
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