Eden Country Club Ltd v Royal Bank Jamaica Ltd
| Jurisdiction | Jamaica |
| Judge | F.A. SMITH, J. |
| Judgment Date | 21 January 2000 |
| Judgment citation (vLex) | [2000] 1 JJC 2101 |
| Court | Supreme Court (Jamaica) |
| Date | 21 January 2000 |
| Docket Number | SUIT NO. C.L. E-051 OF 1980 |
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
IN COMMON LAW
BANKING LAW - Bank accounts - Whether defendant wrongfully debited plaintiff's account with specified sums
These actions were consolidated on the 10th May, 1990 pursuant to Order on Summons for Further Directions.
By the 28th February, 1994 the Court had heard all the evidence and the matter was adjourned for written submissions.
Unfortunately a dispute arose between the plaintiffs and their attorney-at-law, Dr. Manderson-Jones. Many efforts were made to resolve this dispute but to no avail.
The plaintiffs eventually terminated Dr. Manderson-Jones instruction to represent them.
The plaintiff filed a Summons for Further Directions which was heard on the 1st October, 1998. Thereafter Mrs. Heidi Reidell the plaintiff in the second suit and a director and shareholder of the plaintiff in the first suit, represented herself in Suit No. R-080 of 1982 and it was agreed that the submissions made on her behalf would in so far as they are relevant to Suit No. E-051 of 1980, be taken into account when dealing with the latter
Suit No. E- 051 of 1980
Eden Country Club Ltd. vs. Royal Bank Jamaica Ltd. (the Eden Suit)
The Defendant was licensed to carry on the business of banking in Jamaica and operated a branch office in Montego Bay. The plaintiff was at all material times a customer of the Defendant and had an account (No.114–157–1) at the aforesaid branch.
The directors and shareholders of the plaintiff company were at all material times Alton Jenoure, Heidi Reidell, Jenoure Gooden and Vivienne Gooden.
The Plaintiff is claiming that the defendant made a number of unauthorised debits and withdrawals from the plaintiff's account between April, 1979 and April, 1980 totalling $190,391.76.
Accordingly the plaintiff claims:
-
(i) A declaration that the Defendant wrongfully debited the plaintiff's account with the amount of $190,391.76.
-
(ii) An account of the transactions between the plaintiff and the defendant and payment to the plaintiff of any additional sums which may be found due to it.
-
(iii) Damages of $185,433.25 for breach of contract in respect of the operation of the plaintiff company's account.
-
(iv) Alternatively payment of the said amount of $185,433.26 as money had and received by the defendant to the plaintiff company's use.
-
(v) Alternatively damages for negligence.
The defence is that under the ostensible authority of the plaintiff company and/or the parties acting within the terms of the ostensible or actual authority thereby given, internal debit memos were used to withdraw funds from the plaintiff's account for the payment of wages and operating expenses which the plaintiff's company was liable to pay.
The defendant made no admission as to the contractual duty raised by the plaintiff Eden in its statement of claim but stated that it acted inter alia, pursuant to the provisions of clause 9 of the "Agreement for Operation of Account" (paragraph 12 of Defence).
The defendant further stated that it had acted in accordance with the mandate given by the plaintiff to the defendant and that the account was operated by persons ostensibly acting within the terms of the authority thereby given. The Defendant further claimed that it also acted in accordance with the terms of a new signing resolution of the 2nd October, 1979 of which it was given due notice on 4th October, 1979.
Three witnesses gave evidence.
Mrs. Heidi Reidell and Mr. Alton Jenoure for the plaintiff and Mr. Thomas William Robinson for the Defence.
Mrs. Heidi Reidell operated account No.117–691–61 with the Defendant's Bank at the defendant's branch office in Montego Bay, St. James. This account was opened on the 27th November, 1978 in the names of Alton Jenoure, Jenoure Gooden and Mrs. Heidi Reidell. Mrs. Reidell was a signatory to the account and drew cheques frequently on and made lodgements to the said account.
The account she said, was opened in order to refurbish and restore a dormant golf course and restaurant at Iron Shore, in the parish of St. James.
On the 7th November, 1978 Mr. Alton Jenoure on behalf of the plaintiff signed a letter of intent to lease from Trans Caribbean Jamaica Limited the Iron Shore Golf Club and Golf Course. This property was renamed Eden Country Club Limited. This limited liability company was formed with the initial shareholders being Mr. Alton Jenoure and Mrs. Reidell. They were also directors of the plaintiff. This Golf company was formed on December 18, 1978; its registered office was at Ironshore in Montego Bay.
At a meeting of the Board of Directors held on the 13th February, 1979 the Defendant was appointed the banker of the plaintiff company. The Manager of the Defendant Bank was Mr. Thomas William Jack Robinson.
The plaintiff company on February 16, 1979 opened a current account No.114–1571 with the Defendant. An Agreement for Operation of Account was signed by Mr. Jenoure Gooden and his wife Mrs. Vivienne Gooden, the Managing Director and Secretary, respectively of the plaintiff company.
This document provides that the authorised persons for the signing of all cheques, bills, instruments or other documents drawn on or made payable to the Bank shall be:
-
1. The Managing Director who must sign jointly with Alton E. Jenoure or Heidi Reidell or;
-
2. The Secretary/Director to sign jointly with Alton E. Jenoure or Heidi Reidell.
The same applied to all requests for advances, loans, overdrafts or otherwise with or without security. According to the plaintiff the reason for this signing arrangement was to ensure mutual security and control of the plaintiff company's business in favour of the Directors.
Mrs. Reidell testified that the plaintiff presented to the Defendant a copy of the Memorandum and Articles of Association of the plaintiff company as well as a copy of the Certificate of Incorporation, copies of the signing arrangements and signature cards.
It is her evidence that the directors were not required to and did not give any guarantee or security in relation to account number 114–1571. The Guarantees at pages 129 to 134 of Volume 1 of the agreed documents were in respect of account number 117. She swore that at the time when these documents were signed the name of "Eden Country Club Limited" was not stated thereon. She also referred to copies of hypothecation forms among the agreed documents and asserted that they were not the facsimile of the original documents.
When the two guarantees were signed on the 16th February, 1979 account 114 was not overdrawn, she contended. Statement of account in respect of account 114 dated March 12, 1979 (pp. 59–74 of agreed documents) was referred to. The date of the first entry is February 19, 1979; the date of the last entry is April 11, 1980.
Mrs. Reidell said she signed cheques during the period February 19 to March, 1979. She did not sign any other instrument and no other instruments other than cheques were drawn by any other officer of the plaintiff company.
Cheques and debit memos signed by unauthorised persons were used to effect withdrawals from account 114 during this period.
The following, is a list of debit memos which the plaintiff claims represent unauthorised withdrawals from its account number 114. These debit memos bear the initials of Mr. Robinson the Manager of the defendant Bank.
| (1) | Debit memo dated May 11, 1979 | in respect of pay roll signed by L.V. Gooden for | ........... | $3,000.00 |
| (2) | Debit memo dated May 18, 197 9 in respect of payroll signed by L.V. Gooden for | $2,400.00 | ||
| (3) | Debit memo dated 1.6.79 for payroll signed by Jenoure Gooden for | $1,976.00 | ||
| (4) | Debit memo dated 19.6.79 for wages signed by Jenoure Gooden for | $6,000.00 | ||
| (5) | Debit memo dated 16.6.79 for wages signed by Jenoure Gooden for | $ 500.00 | ||
| (6) | Debit memo dated 25.6.79 for pay roll signed by Jenoure Gooden for | $3,000.00 | ||
| (7) | Debit memo dated June 79 for wages signed by Jenoure Gooden for | $6,000.00 | ||
| (8) | Debit memo dated 18.9.79 for wages signed by for | $1,800.00 | ||
| (9) | Debit memo dated 13.7.79 for pay bill signed by L.V. Gooden for | $2,666.00 | ||
| (10) | Debit memo dated 28.9. for wages signed by L.V. Gooden for | $ 780.00 | ||
| (11) | Debit memo dated 6.7.79 for pay bill signed Jenoure Gooden for | $1,300.00 | ||
| (12) | Debit memo dated 27.7.79 for pay roll signed by Jenoure Gooden for | $1,000.00 | ||
| (13) | Debit memo dated 10.8.79 for pay bill signed by L.V. Gooden for | $1,800.00 | ||
| (14) | Debit memo dated 17.8.79 for wages signed by L.V. Gooden for | $ 800.00 | ||
| (15) | Debit memo for wages stamped August 27, 79 signed L.V. Gooden for | $ 550.00 | ||
| (16) | Debit memo for pay bill dated August 31, 79 signed L.V. Gooden for | $ 700.00 | ||
| (17) | Debit memo for cash advanced dated September 12, 79 signed Lv. Gooden for | $ 600.00 | ||
| (18) | Debit memo for payroll dated April 17, 79 signed Jenoure Gooden and L.V. Gooden for | $2,630.00 | ||
| (19) | Debit memo for wages dated April 27, 79 signed Jenoure Gooden for | $2,410.90 | ||
| (20) | Debit memo for payroll dated May 4, 79 signed L.V. Gooden for | $2,399.00 | ||
| (21) | Debit memo (transferred to 117–691–6) dated February 21, 7 9 (Ex. 3) not signed by any officer of the plaintiff company for | $76,000.00 | ||
| (22) | Debit memo (transfer to 117–691–6) dated May 17, 79 not signed | $6,158.00 | ||
| (23) | Debit memo dated 24.5.79 not signed | $ 78.58 | ||
| Total | $118,558.29 |
It is the plaintiff's contention that none of these debit memos complied with the signing authority which the bank knew of. Mrs. Reidell stated that she was not aware of them at the time they were being put through. She identified two other debit memos not among...
To continue reading
Request your trial