First Caribbean International Bank Ltd v Fullfam Enterprises Ltd, Eva Mae Fuller and Christopher Fuller

• Jurisdiction: Jamaica
• Judge: Hibbert, J.
• Judgment Date: 10 February 2005
• Judgment citation (vLex): [2005] 2 JJC 1001
• Date: 10 February 2005
• Court: Supreme Court (Jamaica)

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN COMMON LAW

BETWEEN

FIRST CARIBBEAN INTERNATIONAL BANK LIMITED

CLAIMANT

AND

FULLFAM ENTERPRISES LINITED

1 ^ST DEFENDANT

AND

EVA MAE FULLER

2 ^ND DEFENDANT

AND

CHRISTOPHER FULLER

3 ^RD DEFENDANT

^nd

^rd

GUARANTEES - Undue influence

Hibbert, J

1 1. Fullfam Enterprises Limited was incorporated with two shareholders namely Dr. Eva Mae Fuller and Mr. Christopher Fuller, wife and husband who were also named as directors. Additionally, Dr. Fuller was designated secretary of the company.

2 2. To house the operations of the company Dr. and Mr. Fuller in 1995 purchased as joint tenants premises situated at 28 Victoria Avenue in the parish of Kingston. For this they obtained a loan by way of mortgage from C.I.B.C. Jamaica Limited, the name of which was subsequently changed to First Caribbean International Bank (Jamaica) Limited. A further loan was granted to Fullfam in 1997 for the renovation of the property and in 1998 the bank extended to Fullfam overdraft facilities to provide it with working capital.

3 3. Later, on the request of Mr. Fuller it was agreed that all the loans would be consolidated under the company to allow for ease of debt servicing requirements. As evidence of this consolidation, on the request of C.I.B.C, Dr. and Mr. Fuller executed a promissory note on 16 ^th November, 1998 on behalf of Fullfam representing the total outstanding liability at that date. Dr. and Mr. Fuller also signed an unlimited guarantee as additional support for the security for the loan.

4 4. In 1999 the loan was classified as non-performing as it was not being serviced and letters of demand dated 28 ^th January 2001 were sent to Fullfam as the principal debtor and to Dr. and Mr. Fuller as guarantors. In those letters the loan balance was stated to be $4, 054,600.19. In a letter dated 27 ^th February, 2001 Dr. Fuller enclosed a cheque for the sum of $560,000 to be applied towards reducing the loan balance of $4,050,600.19.

5 5. By writ of summons dated 31 ^st December, 2001 C.I.B.C. sued Fullfam as well as Dr. and Mr. Fuller to recover the debt owed. On the 16 ^th January 2002, Messrs. Tenn Russell Chin Sang Hamilton and Ramsay entered an appearance on behalf of all three defendants and subsequently filed a Defence relative to them. In this Defence Fullfam denied borrowing from or owing any sum to, C.I.B.C. Dr. and Mr. Fuller denied the making of any instrument of guarantee on the 20 ^th August, 1999.

6 6. On the 4 ^th October, 2002 an Amended Defence was filed in which Dr. and Mr. Fuller, in the alternative, pleaded that even if they made the alleged instrument of guarantee, there was no consideration moving from C.I.B.C. to support the guarantee.

7 7. On the 7 ^th March 2003 McCalla, J upon hearing an application for summary judgment, ordered that summary judgment be entered against Fullfam but dismissed the summons against Dr. and Mr. Fuller.

8 8. By Notice of Change of Attorney dated 7 ^th November 2003 Ms. Aisha M.N. Mulendwe took over the legal representation of Dr. Fuller, and on the 20 ^th November 2003 filed a Further Amended Defence in relation to Dr. Fuller. In this Amended Defence, the defence of undue influence was raised as it was then pleaded that the alleged execution of the instrument of guarantee by Dr. Fuller was procured by the exercise of undue influence of Mr. Fuller and that C.I.B.C. was aware of the relationship which existed and should have satisfied itself that she had received independent legal advice.

9 9. On the 3 ^rd February, 2004 the Defence of Dr. Fuller was further amended by adding a Counter Claim in which Dr. Fuller claimed from C.I.B.C. the sum of $560,000, alleging that this amount was paid by her to C.I.B.C. as a result of undue influence exercised by the bank.

10 10. The Defences of Dr. Fuller and Mr. Fuller both questioned the validity and enforceability of the instrument of guarantee and further, in relation to Dr. Fuller the question of undue influence was raised.

The Guarantee

11 11. In their pleadings both Dr. and Mr. Fuller denied...