First Global Bank Ltd v Rohan Rose, Anthony Lewis, Theodore Levy and Mobil Import/Export Company Ltd

• Jurisdiction: Jamaica
• Judge: ANDERSON J.
• Judgment Date: 08 April 2010
• Judgment citation (vLex): [2010] 4 JJC 0801
• Court: Supreme Court (Jamaica)
• Date: 08 April 2010

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

CLAIM NO. 2009 HCV 6797

BETWEEN

FIRST GLOBAL BANK LIMITED

CLAIMANT

AND

ROHAN ROSE

1 ^st DEFENDANT

AND

ANTHONY LEWIS

2 ^nd DEFENDANT

AND

THEODORE LEVY

3 ^rd DEFENDANT

AND

MOBIL IMPORT EXPORT COMPANY LIMITED

4 ^th DEFENDANT

Freezing Order — Inter partes hearing — Application to set aside Freezing Order for Non- Disclosure — Material non-disclosure - Application to set aside search order — extent of the privilege against self-incrimination — whether U.K. precedents can assist Jamaican Courts.

FREEZING ORDERS - Inter partes hearing - Application to set aside Freezing Order for non-disclosure - Material non-disclosure - Application to set aside Search Order - Extent of privilege against self-incrimination - Whether UK precedents can assist Jamaican courts

ANDERSON J

1 Three days after Christmas Day last, on December 28, 2009, in this Court, Her Ladyship Marjorie Cole-Smith J. granted an ex parte application for a freezing order under Part 17 of the Civil Procedure Rules 2002, against the first defendant herein. At the same hearing, her ladyship also granted an order for search to be made of the first defendant's premises and for documents to be searched and copies of his computers cloned by the Search Party. The order named Kathryn Denbow, Attorney-at-law as the "Supervising Attorney: for the purposes of the search". On the 8 ^th January 2010, the first defendant filed an application to set aside the Freezing Order and the Search Order and on the 1l ^th January 2010 the Inter Partes hearing came before the court. On that day the hearing was re-scheduled for January 27, 2010 and the Freezing Order extended to the adjourned date.

2 The Freezing Order had been granted pursuant to the filing of a claim in the Supreme Court by First Global Bank Limited (the "Claimant") against Rohan Rose the first defendant ("Rose"), Anthony Lewis the second Defendant ("Lewis"), Theodore Levy, the third defendant ("Levy") and Mobil Import Export Company Limited, the fourth defendant ("Mobil"). The claim is primarily against Rose for breach of contract and breach of fiduciary duty, negligence, fraud and unjust enrichment, and claims inter alia, the sum of US$7,643,131.43. The Freezing Order prohibits Rose from dealing with his assets below the value of the sum of US$ 7,643,131.43. The claims against the other three defendants are for varying sums and are based upon a claim for money had and received and for unjust enrichment purportedly arising out of the actions of Rose.

3 The specific claims against the respective defendants arise out of certain transactions which, according to the allegations of the Claimant, were carried out by Rose while serving as a senior officer of the bank. While it is not the role of this court to determine the truth of those allegations, for completeness I shall very briefly summarize the allegations, bearing in mind always that Rose has denied them in his affidavits.

4 The first set of transactions relate to the role played by Rose as a trader in United States of America treasury securities, on behalf of the bank and are referred to by the Claimant as the "US Treasury Bond Transactions". According to the Claimant, Rose had specifically limited authority to trade in this area on the bank's behalf. There were set limits on the bank's level of exposure as well as pre-set limits on potential losses arising from trades in those securities. However, according to the Claimant, Rose exceeded his authority thereby causing the Claimant losses in excess of Three Million United States Dollars (US$3,000,000.00). Subsequently, in order to cover up these losses, he undertook further transactions which gave rise to even further losses of over Four Million United States Dollars (US$4,000,000.00)

5 The second set of transactions is referred to as the "Stocks and Securities Transactions". These involved profits of over One Hundred and Thirty Seven Thousand United States dollars (US$137,000.00) made by Rose as a trader in securities between April and May 2008. The Claimant alleges that instead of crediting the bank with these profits, Rose caused them to be incorrectly documented and transferred from the bank. Documents were prepared describing the various amounts as the proceeds of transactions by which the Bank purchased US currency from Standard Bank, but there were in fact, no such transactions. Rose then caused the Bank to draw four separate cheques, all payable to Stocks & Securities Limited for the Jamaican dollar equivalent of the US$ trading profits. The four cheques were then negotiated by Lewis, within a day of their being drawn. Lewis was not entitled to these funds.

6 The third set of transactions is described as the Levy/Mobil transactions. These transactions took place between April 2007 and March 2008 and involved trading profits being used by Rose to replace sums taken from the bank and credited to Levy and Mobil or, in one case, used as part payment for property acquired by Mobil.

7 The matters before me at this time are an application by the Claimant for the extension of the Freezing Order until trial and the further consideration of the Search Order as well as applications by Rose, by way of a Notice of Application for Court Orders, to set aside both orders. To provide for a coherent consideration of the issues which have to be determined, it may be convenient at this stage to set out the grounds upon which Rose relies in his challenges to the freezing and the search orders. These are set out in the Notice of Application.

8 The grounds on which the Applicant is seeking the orders are as follows:

• 1) The Claimant having made a complaint to the Jamaica Constabulary Force (JCF) in the person of Senior Superintendent Fitz Bailey of the Organised Crime Division; and the JCF having launched an investigation into the complaint, and having had a first interview with the Defendant in the presence of his then Attorney-at-Law Mr. Christopher Townsend, and where it is likely that criminal charges will be laid against the Defendant, this Honourable Court cannot make a Search Order against the Defendant compelling him to disclose documents and information since that would infringe his privilege against self incrimination.

• 2) The Claimant failed and/or neglected to ascertain and if they had, to state that the Supervising Attorney being proposed by it had recent material experience of the execution of search Orders conducted under the supervision of a Supervising Attorney.

• 3) There was no undertaking by the Claimant not to inform anyone else of the proceedings except for the purpose of the proceedings.

• 4) The search team did not include a partner from the Claimant's Attorneys-at-Law.

• 5) Material non disclosure by the Claimant in that:

  • a) It failed to disclose that it made a complaint to the Jamaica Constabulary Force (JCF) in the person of Superintendent Fitz Bailey of the Organised Crime Division; and that an investigation had been launched by the JCF; and that the JCF had done a preliminary interview of the Defendant; and had searched his computer; and that the said investigations were continuing.

  • b) It failed to disclose that the Vice President of Finance of the Claimant Mrs. Clover Moodie was dismissed by the Claimant arising out of her conduct relating to the losses sustained by the Claimant the subject of this action.

  • c) That the Claimant commissioned a forensic audit by GORDON MOORE of Sepia Associates of 17 Highview Drive, Sewickly PA 15143 U.S.A and that this report is to hand and reveals inter alia that in regards to the trading losses, electronic mail correspondence exists between Wayne Wray the then President of the Claimant and Andrew Messado who is a Senior Financial Officer of Grace Kennedy & Co, the parent company of the Claimant and Gavin Jordan the Assistant Vice President of Finance of the Claimant which speaks to the fact of adverse trading positions and the best way to treat with them.

  • d) That the position limit of US$10 Million referred to in the Affidavit of Joseph Taffe was not a cumulative position limited but a position limit per trade.

  • e) That the position limit referred to in the Affidavit of Joseph Taffe aforesaid was only approved by the Board of the Claimant in July 2009 well after the trades the subject of this action were completed.

  • f) That there is an internal audit report done in January by David Hall the Chief Internal Auditor of Grace Kennedy & Co which was not disclosed.

  • g) That the said audit by David Hall the Chief Internal Auditor of Grace Kennedy & Co Limited the parent company of the Claimant revealed that:

    • i) There was no approved documented policy and procedure outlining the controls that should surround the sales and purchases of securities.

    • ii) The Audit did not identify breach of trading positions limits.

• 6) That the Affidavit of Joseph Taffe does not disclose any probative material to support any allegation of any attempt by the Defendant to dissipate his assets.

• 7) That there is a real danger that the Claimant will use the documents the fruit of the Search Order in the Criminal proceedings which are likely to be instituted against the 1 ^st Defendant.

• 8) These proceedings will have an adverse impact on the 1 ^st Defendant's employment and may lead to a termination of his employment; and

• 9) The Defendant and a third party will be unduly prejudiced and suffer hardship as a result of the grant of the injunction.

9 The applications to set aside the respective orders of Cole-Smith J are strongly resisted by the Claimant and it in turn argues that the freezing order should be extended to the date of trial and that the search order also ought not to be disturbed.

10 In support of its application to extend the freezing order until trial and in...