First Financial Caribbean Trust Company Ltd Claimant v Delroy Howell and Others [Circuit Court]

• Jurisdiction: Jamaica
• Judge: Mangatal J
• Judgment Date: 10 May 2013
• Docket Number: CLAIM NO. 2010 CD 00086
• Date: 10 May 2013
• Court: Supreme Court (Jamaica)

[2013]JMCC Comm. 8

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN COMMERCIAL DIVISION

CLAIM NO. 2010 CD 00086

Between:

First Financial Caribbean Trust Company Limited (In Liquidation)

Claimant

and

Delroy Howell

1ST Defendant

and

Kenarthur Mitchell

2nd Defendant

and

First Financial Caribbean (Jamaica) Limited

3rd Defendant

and

First Financial International Group Limited

4th Defendant

and

First Financial Caribbean Limited

5th Defendant

and

First Financial Caribbean (Holdings) Limited

6th Defendant

Mr. Michael Hylton Q.C., Mr. Kevin Powell and Mr. Sundiata Gibbs instructed by Michael Hylton & Associates for the Claimant.

Mr. Douglas Leys Q.C. and Mr. Roderick Gordon instructed by Gordon

McGrath for the 1 ^st Defendant.

Mr. Douglas Leys Q.C. and Mrs. Marvalyn Taylor-Wright instructed by Taylor—

Wright & Co. for the 2 ^nd to 6 ^th Defendants.

COMPANY LAW — INSOLVENCY — PRIVATE INTERNATIONAL LAW — APPOINTMENT OF LIQUIDATOR IN WINDING-UP PROCEEDINGS IN FOREIGN COURT — CLAIM FILED BY COMPANY FOR BREACH OF FIDUCIARY DUTY, CONTRACT AND FRAUD PRIOR TO WINDING-UP ORDER — LOCUS STANDI OF LIQUIDATOR TO CONTINUE PROCEEDINGS — WHETHER NEED FOR LETTER OF REQUEST FROM FOREIGN COURT TO JAMAICAN COURT SEEKING ASSISTANCE — INHERENT JURISDICTION OF THE COURT TO RECOGNIZE AND ASSIST LIQUIDATOR — FORM OF RECOGNITION — WHETHER ASSISTANCE NECESSARY

IN CHAMBERS

Mangatal J

1 The issues that I now have to rule upon are very interesting and novel, at least in our jurisdiction. On the 10 ^th of May I refused the applications and promised to let the parties have my reasons for judgment. These I now provide.

2 By application filed on the 20 ^th March 2013, the 1st Defendant, and by application filed the 19 ^th March 2013, the 2 ^nd to 6 ^th Defendants, respectively seek the following relief/orders:

1. That the Claimant and/or the Liquidator (Maria Ferere) has no locus standi to continue the present proceedings and institute any further Applications in the present proceedings in this Honourable Court.

2. That as a consequence Claim No. 2010 CD 00086 be struck out from the Court's record and judgment entered for the …. Defendants, with costs.

3. Alternatively that all proceedings in this Claim be stayed on the following conditions. That:

(i) the existing freezing orders be discharged;

(ii) all monies and other assets which were held in the name of the Claimant and which have been remitted outside of the jurisdiction of this Court into the hands of the liquidator shall be immediately returned to the persons from whom they were collected by the Claimant's Attorneys-at-Law;

(iii) that the sum of US$2,435,053.33 owned by the 3 ^rd Defendant herein and which have been remitted by the Claimant's Attorneys-at-Law into the hands of the liquidator outside the jurisdiction of this Court be forthwith returned to the Defendant by paying the same to its Attorneys-at-Law together with interest at the rate of 9% per annum from the date of payment to the Claimant's Attorneys-at-Law, until repayment;

(iv) this Honourable Court and these Defendants be notified of the date of such return to the said persons from whom they were collected by the Claimant's Attorneys-at-Law;

(v) the Claimant pays the sums of US$298,969.07 and US $377,000.00 in favour of the 1 ^st Defendant on the one hand and of the 2 ^nd and 3 ^rd Defendants (on) the other hand respectively, against the costs ordered by the Court of Appeal on January 22, 2013 within 7 days of the date of this Order.

(vi) the costs incurred by the … Defendants in this Claim since May 18, 2011 or subsequent to the appointment of the liquidator by the Turks and Caicos Islands Supreme Court be paid by the Claimant on an indemnity and client/attorney basis (save the order for costs reserved by this Honourable Court on the Claimant's Application for Directions dated the 14 ^th January 2013);

(vii) the sum of US$140,000.00 be paid against the said costs incurred by these Defendants, since the appointment of the liquidator, within 7 days of the date of this Order.

(viii) If the Claimant fails to comply with the above mentioned conditions and/or the proceedings are not resumed within a period of three months from the date hereof, the Claim herein and all reliefs sought thereunder stands dismissed with costs to the Defendants and conditions (i) to (vii) shall be effected immediately by the Claimant without further order from this Court.

4. That this Honourable Court do make such further orders or give such directions as it thinks fit.

3 The stated grounds of the applications are as follows:

‘i. The Claimant is in liquidation under the jurisdiction of the Supreme Court of the Turks & Caicos Islands (TCI) and a liquidator has been appointed by that Honourable Court since May 18, 2011. The Liquidator is an officer of TCI Supreme Court duly appointed aforesaid.

ii. The Claimant has not since the said appointment made any application to that court requesting the said court to seek the assistance of the Jamaican Supreme Court to recognise her status as liquidator in this jurisdiction and to carry out her functions as such in Jamaica, which functions would include the authorisation for continuation of proceedings, commenced by the Claimant prior to her appointment as liquidator as well as collecting and dealing with the assets of the Claimant. The Claimant, its Attorneys-at-Law and/or the Liquidator in pursuing these proceedings do so without the lawful authority of this Honourable Court.

iii. The Liquidator has not demonstrated that it has any lawful authority to act in aid of the foreign liquidation ordered by the TCI Supreme Court in this jurisdiction. She is not lawfully an officer of the Jamaican Supreme Court and has not submitted herself to the jurisdiction of the Jamaican Court as required by law.

iv. In particular, the Claimant and/or Liquidator has not sought nor obtained an order from this Honourable Court recognizing, empowering and authorizing her to continue proceedings in the name of the Claimant or in her own name in this Honourable Court. The continuation of this claim under the instruction of the liquidator in the name of the company without seeking recognition aforesaid is an abuse of the process (of) this Court and is likely to obstruct the just disposal of the proceedings as (the Defendants) cannot lawfully apply for certain reliefs essential to the conduct of the case because the Court cannot lawfully exercise jurisdiction over the liquidator.

v. This Court has power to grant the relief being sought under its inherent jurisdiction or pursuant to its case management powers contained in Rules 26.1(2)(e),(f),(g),(j) and (v), Rule 26.3(1)(b), in keeping with the overriding objective stated in rule 1, and pursuant to Part 64 of the Civil Procedure Rules 2002.’

BACKGROUND

4 This claim was filed on the 19th August 2010 by First Financial Caribbean Trust Company Limited (‘First Financial’) in the Supreme Court of Judicature of Jamaica (‘the Supreme Court”). First Financial was incorporated in the Turks and Caicos Islands in 2001. It was licensed by the Financial Services Commission of the Turks and Caicos Islands (‘the FSC’) to carry on business as a trust company in that jurisdiction, and did so at times material to this claim since 2002. The claim was brought against the Defendants for damages for several causes of action, including damages for breach of fiduciary duty, breach of contract and fraud arising from actions allegedly occurring prior to First Financial being placed in liquidation.

5 On May 18 2011, the Supreme Court of the Turks and Caicos Islands (‘the TCI Court’) ordered that First Financial be wound up and appointed Maria Ferere as the liquidator (‘the Liquidator’). The winding-up process is still ongoing. One of the specific powers with which the Liquidator became vested upon her appointment, set out at paragraph 3.(18) of the Winding Up Order was:

‘to bring, continue, defend or intervene in any action or other legal proceedings in any jurisdiction in the name and on behalf of the Company and including for the avoidance of doubt the giving of any indemnity or cross undertaking in damages as may be necessary and limited to the free assets of the Company coming into the Liquidator's possession;’

6 Prior to May 18 2011, there had been a number of interlocutory applications made and considered by the Supreme Court and the Court of Appeal of Jamaica, which exercises appellate jurisdiction over the Supreme Court. In particular, for example, in September 2010 Brooks J. (as he then was) heard applications by the Defendants to, amongst other matters, strike out the claim. One of the bases for that application was that these proceedings and the claim were commenced without authority. In his written judgment delivered on 1 ^st October 2010, Brooks J. held that those in charge of First Financial were entitled to, if not obliged, to institute the claim to, ‘at least have a proper accounting of the trust monies’ (page 13 of the judgment).

7 On the 14 ^th of June 2012 an Amended Claim Form and Amended Particulars of Claim were filed, with the Certificate of Truth being signed by the Liquidator. No new causes of action were alleged in these amended Statements of Case.

8 The 1 ^st Defendant Mr. Delroy Howell, (‘Mr. Howell’), in his Affidavit filed March 19 ^th 2013 in support of the applications by the Defendants, gives evidence that the Jamaican Court was first alerted to the fact of the presentation of the Petition to Wind Up First Financial, filed in the TCI Court by the Financial Services Commission, by Mr. G Anthony Levy, Attorney-at-Law, then on the record as representing Mr. Howell. Mr. Levy filed an Affidavit containing this information on the 23 ^rd of March 2011. According to paragraph 5 of the...