Jamaica Teachers' Association v Marlon Francis and Others

• Jurisdiction: Jamaica
• Judge: Sykes J
• Judgment Date: 15 May 2015
• Neutral Citation: [2015] JMSC Civ 92
• Docket Number: CLAIM NO. 2014HCV0429
• Court: Supreme Court (Jamaica)
• Date: 15 May 2015

[2015] JMSC Civ 92

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA CIVIL DIVISION

CLAIM NO. 2014HCV0429

Between

Jamaica Teachers' Association

Applicant

and

Marlon Francis

First Defendant

Margaret Angela Creary

Second Defendant

Althea Marie Ennis

Third Defendant

City Lights Imports Limited

Fourth Defendant

Ransford Braham QC , Caroline Haye and Grace Ann Thomas for the claimant

Keith Bishop , Romaine Tulloch instructed by Bishop and Partners for the second and third defendant

Clive Mullings for the fourth defendant

CIVIL PROCEDURE — FREEZING ORDER — CONTESTED HEARING — WHETHER FREEZING ORDER SHOULD BE DISCHARGED — SUMMARY JUDGMENT APPLICATION

IN CHAMBERS

Sykes J

1 The Jamaica Teachers” Association (“JTA”) has been hit very hard by an alleged $99m fraud. The JTA believes that the fraud was committed by Mr Marlon Francis who was employed to the JTA between April 10, 1997 and July 23, 2013. The alleged fraud came to light during the annual audit when some irregularities were uncovered. This discovery led to further exploration. The further exploration involved two auditors: BDO, JTA's external auditor, and PricewaterhouseCoopers (“PwC” and yes it is all one word without spelling errors), an independent auditor. BDO's audit stated that it covered the period April 1, 2012 to March 31, 2012 (phase 1) and April 1, 2013 to July 22, 2013 (phase 2). PwC was asked to do an audit for the period April 1, 2008 to March 31, 2013. The report placed before the court from PwC covered the period April 1, 2011 to July 31, 2013. The JTA was to decide whether the other years should be covered. According to PwC the total of suspicious disbursements was $95.5m approximately. At the end of the audits the JTA pointed the finger of accusation at Mr Francis who, it appears, cannot be found within the geographical boundaries of Jamaica despite the best efforts of the police and others.

2 Something more must be said about Mr Francis. Mr Francis began life at the JTA as a junior accounting clerk and moved up to an accounts payable clerk. His salary, at its peak, was approximately JA$1.5m.

3 One of the most remarkable things alleged about Mr Francis is that with a salary of $1.5m he was able to purchase either solely or in the name of himself and his mother properties valued over $50m. From the evidence presented none of these properties was purchased with a mortgage from a financial institution. Of course this does not rule out a vendor's mortgage but the evidence presented does not raise this possibility.

4 As can be seen from the title of this claim, there are three additional defendants. An introduction to them would be in order. Miss Margaret Creary is Mr Francis” mother. Mrs Althea Ennis is either his aunt (according to her) or his cousin (according to the JTA). City Lights Imports Limited (“CLIL”) a company in which Mr Francis” present girlfriend (according to the JTA) or former girlfriend (according to her) is the managing director. Her name is Miss Kedene Necole Chambers. She is the person who has provided the affidavits and filed the defence on behalf of the company.

5 Miss Creary alleges that her son had other businesses. Presumably she means business other than his employment at JTA. Mrs Ennis is silent on the employment of Mr Francis. Miss Chambers does not indicate whether or not she knew that he was working at the JTA. What she says, on behalf of CLIL, is that he was engaged in the business of selling used cars. It must be said that no documentary evidence of any kind has been presented to suggest the nature of Mr Francis' business if he really had other business. No letter head. No email. No receipt book. No correspondence. No tax records. No known place of business. No TRN. No GCT registration. The best efforts of the JTA even when assisted by a state investigative agency have not been able to produce any evidence of Mr Francis' other business activities. None of the other defendants seem to be able to provide details of the extent of Mr Francis' used car business assuming that that is what he was really involved in. Mr Francis is a business and financial ghost; a business without any presence, to date, in the natural and material world.

6 Without getting into the details of how the fraud was committed, it is safe to say that the JTA has concluded that Mr Francis manipulated the system of payment and control at the JTA in such a manner that enabled him to take out $99m. It is alleged that he did this by creating fictitious invoices, forgery and issuing or causing to be issued unauthorised cheques.

7 A claim has been filed alleging all sorts of misdeeds against Mr Francis ranging from wrongfully procuring or causing money to be paid out to fraud to breach of fiduciary duty.

8 The JTA's hunt for the millions led them to the door steps of Miss Margaret Creary, Mrs Althea Ennis and the CLIL. The JTA has alleged that the alleged misappropriated funds were used to acquire real estate in the names of Miss Creary and Mrs Ennis. The case against CLIL is that it knowingly received money or assisted Mr Francis is getting money knowing that he had misappropriated the money. CLIL admitted receiving the money into its accounts from Mr Francis but accounted for this by saying that it thought the money came from the sale of used cars. CLIL has alleged that the money was taken out to pay attorneys for Mr Francis in relation to transactions other than this present case. The company stated that it received manager's cheques only and did not receive any of the cheques which bore the JTA's name or any of the persons who could authorise the transaction and therefore had no reason to believe that the money was coming from any theft. It is useful, at this stage, to identify the properties in dispute and the legal title holders of those properties.

Real property held by Mr Marlon Francis alone

9 These two properties are held by in Mr Francis' name. They are (a) property at lot 154 Keystone Farms in the parish of St Catherine registered at volume 1101 folio 198 of the Register Book of Titles in the name of Mr Marlon Francis on November 3, 2010 acquired at a cost of $2m; and (b) property at lot 17 Coopers Hill, West Coopers Hill Road in the parish of St Andrew registered at volume 984 folio 409 of the Register Book of Titles registered in the name of Mr Marlon Francis on January 6, 2011. No purchase price was stated for this property.

Real property held by Mr Marlon Francis and Miss Margaret Creary

10 Miss Creary is the mother of Mr Francis. The following properties are held by Mr Francis and Miss Creary jointly: (a) property at 5 Dupont Avenue, Red Hills Gardens, Kingston 20, in the parish of St Andrew registered volume 829 folio 8 of the Register Book of Titles registered in both names on January 30, 2013 acquired at a cost of $12.5m; and (b) property at lot 19B Chancery Hall, Kingston 19, in the parish of St Andrew registered at volume 1144 folio 588 of the Register Book of Titles registered in both names on March 14, 2013 acquired at cost of $20m.

Real property held by Miss Margaret Creary alone

11 Miss Creary holds the following property by herself: (a) property at 10 Lecce Close, Angels Estate, Phase 2, Spanish Town in the parish of St Catherine registered at volume 1339 folio 588 of the Register Book of Titles registered in the name of Margaret Creary on November 14, 2012 acquired by way of gift while simultaneously, an outstanding mortgage of $1.1m was paid off; and (b) property at lot 162 Queens Hill in the parish of St Andrew registered at volume 1117 folio 911 of the Register Book of Titles registered in the name of Margaret Creary on July 2, 2013 acquired at a cost of $32m.

Real property held by Mrs Althea Ennis alone

12 Mrs Ennis, who is either the aunt of Mr Francis according to the JTA or his cousin according to her, became the registered proprietor of property at lot 8 Angeline Crescent, Angels Estate, Spanish Town in the parish of St Catherine registered at volume 1309 folio 47 of the Register Book of Titles on June 30, 2011 acquired at a cost of $11.7m.

Personal property held by Mr Marlon Francis

13 Mr Marlon Francis is the registered owner of a 2004 White Toyota Caldina Motor car. He has several chequing and savings accounts at the Bank of Nova Scotia Jamaica Ltd.

Personal property held by CLIC

14 CLIL holds money at financial institutions.

Freezing orders and their purpose

15 In approaching this matter it is useful to remind ourselves of the purpose of this exceptional power granted to the courts. What the court is about to say is the accumulated wisdom acquired by the courts in Jamaica and England and Wales since 1975 when this jurisdiction made its first appearance on the legal landscape.

16 The sole purpose of the freezing order is to prevent a defendant from taking steps to that would defeat any judgment made against him. A freezing order prior to trial does not invalidate the law of insolvency and neither does it prevent the defendant from conducting lawful business with his property. A freezing order creates no security interest over the property and gives no property right.

17 A freezing order granted in the pre-trial stages is always exceptional if for no other reason than that it restricts the freedom of the defendant in dealing with his property even though no judgment has been entered against him. If the initial application is made without notice to the other side then granting such an order is more than exceptional because the judge would be acting in breach of natural justice in that he would be making an order against a person who has not had been notified and has no knowledge of the hammer that is about to hit him. A freezing order can cause default of financial obligations. It may open persons to a law suit. Socially, it may make one a pariah because of the opprobrium...