Financial Institutions Services Ltd v Dojap Investments Ltd et Al
C.L.F. No. 062 of 1997
John Vassell instructed by Dunn, Cox, Orrett and Ashenheim for the plaintiff.
R. Henrique, Q.C. and Lawrence Broderick for the defendants.
Contract - Plaintiff claimed against defendant for the sum of US$1,077, 000 being contributions from the defendant co-sureties in respect of money paid by the plaintiff as surety — Court found that on the balance of probabilities the defendant had failed to discharge the obligation which rested upon them — Judgment for plaintiffs.
By writ of summons dated June 13, 1997, duly endorsed, the plaintiff claimed against the defendants for-
- The sum of US$1,077,000.00 or the Jamaican equivalent at the date of payment or judgment, being contribution from the defendant co-sureties, in respect of money paid by the plaintiff as surety and/or as money paid by the plaintiff for the use of the defendants. 2. Interest on the said sum of US$1,077,000.00 at commercial rates from the 10th December, 1996, to the date of payment or judgment. 3. Costs. 4. Further or other relief.
The statement of claim was filed in the Registry of the Supreme Court on the same date as the writ of summons.
Appearance, on behalf of all the defendants, was entered on the 16th day of July, 1977, the plaintiff filed a summons for summary judgment.
On February 4, 1998, the defendants filed a (summons to dismiss the action pursuant to section 238 of the Civil Procedure Code.”
No argument was advanced in support of the summons. It follows, therefore, that the summons must be treated as having been dismissed for want of prosecution.
It is necessary to set out the bass of the plaintiff's claim.
Blaise Trust Company & Merchant bank Limited (hereinafter referred to as ‘BTMB’) and Consolidated Holdings Limited (hereinafter referred to as “Consolidated Holdings”) and the first defendant were owned and/or controlled by the second and third defendants.
A Bank of Jamaica inspection revealed that BTMB was in breach of several provisions of the Financial Institutions Act. In April 1994, the second and third defendants gave to the Bank of Jamaica written undertakings to comply strictly with certain management and operational guidelines set out in a Joint and Several Undertaking which both the second and third defendants signed.
The situation worsened and in July 1994, the second defendant gave an undertaking to the Bank of Jamaica that BTMB would be restructured and a new investor found who would inject capital of US$1,000,000.00 into BTMB and acquire control of the Bank and its Board.
The second defendant, in keeping with the undertaking, entered into discussions with one James Eroncig, an American businessman who controlled Continental Petroleum Corporation Limited, a Bahamian Corporation, and West Euro Equities Limited, a Cayman Corporation. The discussions gave birth to the undermentioned agreement.
(a) Continental Petroleum would subscribe for US$1,000,000.00 redeemable preference shares with a fixed monthly dividend of US$20,000.00 in the share capital of West Euro to enable West Euro to invest the said US$1,000,000.00 in the capital of “BTMB”.
(b) Continental Petroleum would lend to the second defendant US$300,000.00 with interest at US$6,000.00 per month.
(c) The defendants and Consolidated Holdings Limited would guarantee the payment to Continental Petroleum of the fixed monthly dividend on its preference share and that on redemption of its shares at the end of the year it would recover its investment of US$1,000,000.00 and further that they would guarantee the repayment by the second defendant of the interest and principal in respect of the personal loan within one year.
(d) The guarantee by Consolidated Holdings was to be secured by granting to Continental Petroleum a mortgage over its premises at Blaise Industrial Park and the first defendant would secure its guarantee by granting to Continental Petroleum a charge over certain deposits held by it with Jamaica Money Market Brokers Limited and Dehring, Bunting & Golding Limited.
(e) Control of BTMB would return to the second and third defendants for a nominal consideration after continental Petroleum recovered its investment at the end of one year.
In keeping with the agreement mentioned herein West Euro introduced US$1,000,000.00 capital into BTMB in subscription for a controlling shareholding...
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