Reid (Yvette) v City of Kingston Co-operative Credit Union Ltd

• Jurisdiction: Jamaica
• Judge: SMITH, J.A.:
• Judgment Date: 31 July 2008
• Neutral Citation: JM 2008 CA 71
• Judgment citation (vLex): [2008] 7 JJC 3111
• Court: Court of Appeal (Jamaica)
• Date: 31 July 2008

IN THE COURT OF APPEAL

BEFORE:

THE HON. MR. JUSTICE SMITH, J.A THE HON. MRS. JUSTICE HARRIS, J.A THE HON. MISS JUSTICE SMITH, J.A. (Ag.)

HARRIS, J.A.

I agree.

SMITH, J.A. (Aq.

I agree.

SMITH, J.A.

BETWEEN:

YVETTE REID

APPELLANT

AND

CITY OF KINGSTON CO-OPERATIVE CREDIT UNION LTD.

RESPONDENT

Mrs. Marvalyn Taylor-Wright Taylor-Wright & Company

Mr. Jermaine Spence Dunn Cox

JUDICIAL REVIEW - Goods - Supply of - Contract cancellation by Ministry of Education - Matter referred to arbitration

SMITH, J.A.:

1 This is an appeal from the Order of Anderson, J. that a Writ of Certiorari be issued to quash an award made by the Registrar of Co-operative Societies in favour of the appellant and her now deceased mother. The respondent, City of Kingston Co-operative Credit Union Limited (COK), is a body corporate duly registered under the Laws of Jamaica with registered office at 66 Slipe Road, Kingston 5. The appellant, Ms. Yvette Reid and her mother, Mrs. Mavis Henry (now deceased) were members of the respondent.

2 Sometime in 1990 or 1991 the appellant obtained two (2) loans from the respondent. The loans were secured by a Certificate of Title in the names of her parents Matthew Henry and Mavis Henry and the shares held by the appellant in City of Kingston Credit Union. It would appear that on the payment of a fee the respondent undertook to have the death of Mr. Matthew Henry noted on the Registered Title.

3 The first loan was repaid but the appellant defaulted in the repayment of the second loan. The shares the appellant held were used to liquidate the loan. However, the Title was not returned to the appellant on the liquidation of the loan but remained with the respondent for sometime thereafter.

4 By a contract dated 24 ^th of October, 2003 between the Ministry of Education and Education Matters (a business apparently owned by the appellant's mother) the latter agreed to supply goods to the former at an agreed price. The contract period was for ninety (90) days ending on January 21, 2004.

5 On the 15 ^th December, 2003 Mavis Henry wrote the President of the respondent in the following terms:

"I wish to use the Title now in the possession of the Credit Union as collateral for a loan at the Self Start Fund. To allow for this I will clear all indebtedness for which it is being used, so that the process of replacement and submission to them can be effected.

I hereby ask that you submit the Title to the Self Start Fund as soon as the replacement is in place".

6 On the 31 ^st December, 2003 the respondent wrote the Self Start Fund stating that "... as soon as we have been able to track down and receive same we will forward the Title to you as instructed."

7 In response to an application by the appellant for a US$52,000.00 loan, the National Export-Import Bank of Jamaica Limited (Exim Bank) on February 1, 2004 wrote her stating that the Bank had given her application favourable consideration. The letter indicated the pre-conditions to the establishment of the credit and enclosed were the requisite promissory note and indemnity.

8 On February 8, 2004, Certweld Engineers Limited wrote the appellant's mother stating:

"I have instructed my secretary to prepare the cheque for 2.5 Million Dollars for the purchase of school equipment for Basic School on contract with the Ministry of Education, Youth and Culture, and based upon the following agreed conditions.

• " A loan of 2.5 million dollars has been agreed upon by both parties at an interest rate of 14% for sixty (60) months.

  " Collateral in the form of a Title registered at Volume 1031 Folio 572 shall secure the loan and shall be submitted upon the receipt of the cheque.

  " All attendant cost and charges associated with registration of the mortgage will be bourne by you.

I am mindful of the Time frame set out on the contract and will comply accordingly."

9 Other important correspondence which preceded the cancellation of the contract will be referred to later.

10 On the 16 ^th March, 2004 the Ministry of Education cancelled the contract between Education Matters and itself. The letter cancelling the contract which was addressed to Mrs. Mavis Henry, reads:

"The Ministry of Education, Youth and Culture and Education Matters entered into an Agreement on the 24 ^th of October, 2003 whereby Education Matters agreed to supply equipment for Early Childhood institutions as per schedule provided by the Ministry.

The original contract period of ninety (90) days ended on January 21, 2004. However upon several requests from you for additional time to complete the contract, the Ministry, by letter dated February 5, 2004 granted an extension to March 12, 2004. Despite this your company failed to deliver any of the items in the schedule within the extended contract period.

The Ministry hereby advises that the contract has been " terminated as of today's date, March 16, 2004 and the contract is deemed to be in default as set out in Clause 11 — Cancellation of the Contract, of the Conditions of Contract and Schedule of goods.

You are further advised that the Ministry reserves the right to seek redress for any additional expenditure that may be incurred as a result of your failure to provide the goods under the terms of the contract".

11 The letter was signed by the Director of Project, Management and Technical Services (Acting) on behalf of the Permanent Secretary.

12 The following day, March 17, the Title was delivered to Mrs. Henry under cover of a letter which reads:

"Dear Mrs. Henry

Re

Re: Duplicate Certificate of Title registered at Volume 1031 Folio 572

Upon the instructions of your lawyer, Bert S. Samuels, we forward to you herewith the captioned duplicate Certificate of Title.

Please acknowledge safe receipt of the enclosure by signing and returning the attached copy letter.

Yours co-operatively.

City of Kingston Co-operative Credit Union LIMITED."

13 ARBITRATION

14 Subsequently, the appellant applied to the Registrar of Co-operative Societies for the settlement of a dispute which arose between the respondent and herself. The application for the settlement of the dispute was in accordance with section 50 of the Co-operative Societies Act. By virtue of section 50 (2) of the Act, the dispute was referred to an Arbitrator, Mr. Roy A. Stewart, a retired Resident Magistrate and practising Attorney-at-law.

15 The complaints before the Arbitrator were:

• "1. The inability of City of Kingston Co-operative Credit Union to:

  • (a) Note the death of Mr. M. Henry on registered Title used as collateral for a loan obtained by Yvette Reid in 1991 although the legal fees had been paid and the documents signed.

  • (b) Return the said registered title in a timely manner after the obligations to this Credit Union had been discharged and this had resulted in the Claimant's incurring additional expense to recover the title.

• 2. The tardiness of City of Kingston in finding and returning the Title to them had resulted in one of the Claimants losing a lucrative contract with the Ministry of Education as the title was needed to obtain funding elsewhere.

• 3. Yvette Reid took out a second loan with the Credit Union in 1993. After the loan was liquidated, 6 years later it was discovered

  • "(a) That interest late charges had been taken from her account after the loan was paid.

  • (b) An amount of $3,000.00 was withdrawn from her share account in 1997 replaced in 1999 and no explanation given."

16 After three (3) days of hearing the Arbitrator on the 9 ^th of September, 2005 in a twelve (12) page document, gave his findings and reasons for making the following awards:

• "1. City of Kingston Co-operative Credit Union Limited to pay the sum of $150,000.00 to Claimants being fees to note the death of Matthew Henry on the Title.

• 2. City of Kingston Co-operative Credit Union Limited to pay to the Claimant Mavis Henry the sum of $4,043,001.80 as loss of profit on the contract.

• 3. Claim for loss of profits on posters, foam and felt products disallowed.

• 4. City of Kingston Co-operative Credit Union Limited to pay Claimants $150,000.00 being costs of representing Claimants in this matter.

• 5. Claim for refund of late charges $9,126.60 and claim for refund of interest $9,590.90 disallowed.

• 6. Claim for difference between interest on $600,000.00 at City of Kingston Co-operative Credit Union Limited's rate of 30% and Certweld at 14% disallowed.

  Interest at 12% on award from 15 ^th of December, 2003 to date of payment."

17 APPEAL TO THE REGISTRAR

18 By letter dated the 21 ^st of September, 2005 the respondent's Attorneys-at-law gave the Registrar of Co-operatives and Friendly Societies Notice of Appeal against the award of the Arbitrator. This was pursuant to s. 50 (3) of the Act.

19 The grounds of appeal were:

• "1. That the Arbitrator erred in law and in fact in his finding "that Wood Parchment & Company applied on behalf of City of Kingston Co-operative Credit Union Limited to note the death of the deceased joint owner (page 9 of the Award)

• 2. That the Arbitrator erred as a matter of fact in finding that a connection had been established by the Claimant between her not having received her Certificate of Title from the Credit Union in a timely manner and her losing the contract she had with the Ministry of Education.

• 3. That the Arbitrator erred in law in finding "that the Claimant Mrs. Mavis Henry is entitled to an award for loss of profits on the contract with the Ministry of Education "(page 11 of the Award)".

• 4. That the Arbitrator's findings were contrary to the weight of the evidence and as a consequence unreasonable."

20 At the hearing of the Appeal before the Registrar on the 6 ^th of February, 2006 Counsel for the respondent withdrew ground 1. Counsel also stated...