Scotiabank Jamaica Trust and Merchant Bank Ltd v National Commercial Bank Jamaica Ltd and Another

• Jurisdiction: Jamaica
• Judge: Mcintosh JA
• Judgment Date: 28 March 2013
• Neutral Citation: JM 2013 CA 38
• Court: Court of Appeal (Jamaica)
• Docket Number: SUPREME COURT CIVIL APPEAL NO 22/2012 APPLICATION NO 34/12
• Date: 28 March 2013

[2013] JMCA App 5

JAMAICA

IN THE COURT OF APPEAL

SUPREME COURT CIVIL APPEAL NO 22/2012

APPLICATION NO 34/12

Between

Scotiabank Jamaica Trust and Merchant Bank Limited

Applicant

and

National Commercial Bank Jamaica Limited

1st Respondent

and

Jamaica Redevelopment Foundation Inc

2nd Respondent

Dr Lloyd Barnett , Mrs Daniella Gentles-Silvera and Mrs Julie Thompson-James instructed by Livingston Alexander & Levy for the applicant

Charles Piper , Miss Marsha Locke and Wayne Piper instructed by Charles E Piper & Associates for the respondents

CIVIL PROCEDURE - Stay of execution - Application - Notice of appeal - Breach of undertaking - Negligence - Damages

IN CHAMBERS

Mcintosh JA

1 On 23 February 2012 the applicant filed notice and grounds of appeal against a decision of Anderson J delivered on 13 January 2012 by virtue of which the following orders were made:

• ‘A. Judgment for the Claimants on the claim in the sum of US$14,867,992.98.

• B. Interest on the judgment debt at the rate of 4% from July 10, 1997 to the date of payment.

• C. Costs to the Claimants, to be taxed if not agreed.’

The applicant also simultaneously filed an application seeking a stay of execution of the order pending the hearing of its appeal.

2 That same day the application was considered by a single judge of this court who granted a temporary stay, adjourned the matter for further consideration on 20 March 2012 and extended the stay until then. Thereafter the matter was adjourned to 29 May 2012 on which date I heard arguments and reserved judgment to 29 June 2012. The temporary stay was again extended pending delivery of the decision which was rescheduled for 3 July 2012. On that date I gave a brief oral decision granting the application pending the hearing of the appeal or further order of the court. I promised then to reduce the decision into writing at a later date and I seek now to fulfill that promise.

The application

3 The application was based on the grounds that:

• (a) If the judgment sum is paid to the respondents there is no reasonable probability that it will be repaid should the appellant be successful on appeal.

• (b) The appeal has a reasonable prospect of succeeding.

It was supported by an affidavit sworn to by Julie Thompson-James on 23 February 2012 in which she referred to the Notice and Grounds of Appeal filed by the applicant on even date, challenging the conclusions upon which the learned trial judge based his decision.

4 This bid by the appellant to stay the execution of the learned trial judge's order was stoutly resisted by the respondents who seek to have the order affirmed as having been correctly reached. Accordingly, they filed a counter-notice of appeal on 8 March 2012 with supporting grounds additional to those relied on by the learned trial judge in arriving at his conclusions.

A summary of the background facts

5 In providing the necessary background to the application I am content to rely on the summary in paragraph 4 of the applicant's written submissions which I set out below in its entirety:

‘4. The facts giving rise to the claim is that in 1997 the 1 ^st Respondent lent money to Caldon Finance Group (‘CFG’) on the security of stock units in Jamaica Flour Mills, a publicly listed company. The stock units were owned by CFG's subsidiary and guarantor of the loan, PHJ Limited. A take-over bid was issued by ADM Milling Company to purchase the said stock units for US $14,861,992.98. The Appellant who was the Registrar and Transfer Agent for the shares, was given instructions by the shareholder, PHJ, to forward the proceeds of the sale to the 1 ^st Respondent. By letter dated 27 ^th May 1997 CFG wrote to the 1 ^st Respondent requesting that it deliver the stock unit to the Appellant. By letter dated 28 ^th May 1997 the 1 ^st Respondent forwarded the stock units to the Appellant on the Appellant's ‘undertaking’ to forward the amount of US$8,858,350.80 representing the sale proceeds of the stock units by signing and returning a copy of the letter. The Appellant signed the letter acknowledging receipt of the stock units.

Further, stock units were sent to the Appellant by letter dated 30 ^th May 1997 on the same basis. This letter ended by stating that if the sale did not materialize the certificates were to be returned to the 1 ^st Respondent. The sale did materialize. Subsequent to the sale of the said stock units PHJ revoked its instructions to the Appellant and instructed that the bank draft representing the proceeds of sale of the stock units was to be delivered to its bearer. The bank draft was delivered to its bearer and was subsequently lodged in an account with the knowledge and consent of the 1 ^st Respondent. The 1 ^st Respondent wrote to the Bank of Nova Scotia Jamaica Limited requesting direct presentation of the said bank draft. The bank draft was cleared and the customer withdrew the funds on the same day. Part of the proceeds of sale was used by the 1 ^st Respondent to discharge obligations due and owing by PHJ.’

6 The respondents then filed a claim seeking judgment in the sum of US$13,283 893.63 for breach of the undertaking which they contend was contained in the correspondence, passing between the applicant, the 1 ^st respondent and CFG (referred to in the above summary) and for negligence of the applicant in delivering the sale proceeds for the shares to the 1 ^st respondent's customer instead of to the 1 ^st respondent directly which resulted in loss and damage to the 1 ^st respondent.

7 In its defence the applicant denied that there was any contract between itself and the respondents and asserted that it owed no duty of care to them. It denied that it had provided any undertaking to the respondents and contended that at all material times, it was the agent of PHJ, authorized to act only on the instructions of its principal which is exactly what it had done.

The law

8 In the ordinary way a successful claimant is entitled to the fruits of his judgment and there must be a good reason for depriving a claimant of his judgment (see Winchester Cigarette Machinery Ltd v Payne and Another (No 2) Times Law Reports, 15 December 1993). Therefore any applicant who seeks to obtain a stay of execution pending appeal has to show good ground for departing from that position.

9 There have been a number of decisions issuing from this court which have set out the test to be applied in this jurisdiction in determining whether a stay of execution should be granted or refused and there is no issue joined between the parties in this regard. In recent times cases such as Watersport Enterprises Ltd v Jamaica Grande Ltd & Others SCCA No 110/2008 delivered 4 February 2009; Reliant Enterprise Communications Ltd & Anor v Infochannel Ltd SCCA No 99/2009 delivered 2 December 2009; Cable and Wireless Jamaica Limited v Digicel Jamaica Ltd SCCA No 148/09 Application No 169/09 delivered 16 December 2009 and Paymaster (Jamaica) Limited v Grace Kennedy Remittance Services Limited & Lowe [2011] JMCA App 1, all approving Combi (Singapore) Pte v Sriram and another [1997] EWCA 2162, where it was held that the proper approach must be to make the order that best accords with the interest of justice. In making that determination their lordships gave the following guidance:

‘If there is a risk that irremediable harm may be caused to the plaintiff if a stay is ordered but no similar detriment to the defendant if it is not then a stay should not normally be ordered. Equally, if there is a risk that irremediable harm may be caused to the defendant if a stay is not ordered but no similar detriment to the plaintiff if a stay is ordered then a stay should normally be ordered. This assumes of course that the court concludes that there may be some merit in the appeal. If it does not then no stay of execution should be ordered. But where there is a risk of harm to one party or another, whichever order is made the court has to balance the alternatives in order to decide which of them is less likely to produce injustice.’ (Emphasis added)

10 In Paymaster Harris JA looked at the change in the approach of the courts to the requirements for a stay as was set out in Linotype-Hell Finance Limited v Baker [1992] 4 All ER 887 observing that now ‘the courts have adopted quite a liberal approach in that they seek to impose the interest of justice as an essential factor in ordering or refusing a stay.’ The learned judge of appeal referred to the case of Hammond Suddard Solicitors v Agrichem International Holdings Ltd [2001] EWCA Civ 2065 where it was held that ‘the essential question is whether there is a risk of injustice to one or other or both parties if it grants or refuses a stay.’

11 It is quite clear therefore that a successful applicant for a stay must still satisfy a two-fold test in that the applicant must show that (i) there is some merit in the appeal and (ii) the granting of the stay is the order that is likely to produce less injustice between the parties (per Phillips JA in ( also known as Beverley Weir) Dalfel Weir v Beverley Tree [2011] JMCA App 17 )..

The contending arguments

12 In seeking to show that the applicant had a meritorious appeal Dr Barnett referred to the notice of appeal it filed. It listed 32 grounds running the gamut of all the letters of the alphabet, doubling up on the...