Vincent A Chen v Ballena Investments Ltd

• Jurisdiction: Jamaica
• Judge: HARRISON, J.A :
• Judgment Date: 05 July 2002
• Neutral Citation: JM 2002 CA 25
• Judgment citation (vLex): [2002] 7 JJC 0509
• Date: 05 July 2002
• Court: Court of Appeal (Jamaica)

IN THE COURT OF APPEAL

R.N.A. Henrigues, Q.C., and David Batts for appellants instructed by Livingston, Alexander and Levy.

Abe Dabdoub for respondent instructed by Raymond Clough of Clough, Long and Company.

BEFORE:

THE HON MR. JUSTICE FORTE, PRESIDENT THE HON MR. JUSTICE HARRISON, J.A THE HON MR. JUSTICE CLARKE, J.A. (Ag.)

BETWEEN:

VINCENT A. CHEN

DEFENDANT/APPELLANT

AND

BALLENA INVESTMENTS LIMITED

PLAINTIFF/RESPONDENT

CIVIL PROCEDURE - Summary judgment - Leave to appeal and set aside - Promissory note - Payment demanded - Criminal proceedings instituted - Whether civil proceedings should await outcome of criminal trial - Security for costs sought

HARRISON, J.A

1 This is an appeal from the judgment of Mrs Zaila McCalla granting leave to enter summary judgment for the respondent against the appellant Vincent Chen in the sum of US$187,312.00 plus interest at the rate of 20% from January 1 1999, to the date of payment. We heard the arguments and allowed this appeal, set aside the summary judgment and ordered that the matter proceed to trial. As promised, these are our reasons in writing.

2 The relevant facts are that the respondent, a company registered in the Cayman Islands held monies, US$350,000.00, formerly held by another Caymanian registered company Capstan Ltd., on behalf of one Fay Tortello. This sum of money was loaned to J.H.G. Mapp (Succs.) Ltd, a trading company in Jamaica, after being sent through Caribbean Trust Finance & Investment Ltd. The loan was secured by a promissory note dated July 24 1998, signed by one Ronnie Chinloy and the appellant on behalf of J.H.G. Mapp (Succs.) Ltd, both of whom also signed the said note as guarantors. The said note reads:

"PROMISSORY NOTE

US$ 350,000.00

24 ^TH July 1998

We, J.H.G. MAPP (SUCCESSORS) LIMITED DO HEREBY PROMISE TO BALLENA INVESTMENT LIMITED THE SUM OF THREE HUNDRED AND FIFTY THOUSAND UNITED STATES DOLLARS (US$350,000.00) AFTER SIX (6) MONTHS WITH INTEREST THEREON AT A RATE OF TWENTY PERCENT (20%) PER ANNUM TO BE PAID ON THE 24 ^TH AUGUST, 24 ^TH SEPTEMBER, 23 ^RD OCTOBER, 23 ^RD NOVEMBER, 24 ^TH DECEMBER AND 24 ^TH JANUARY 1999 RESPECTIVELY, PAYABLE IN UNITED STATES DOLLARS

VALUE RECEIVED

J.H.G. MAPP (SUCCESSORS) LIMITED

Sgd/ Ronnie ChinLoy

Sgd/ Vincent A. Chen

PAYMENT GUARANTEED

Sgd/

PROMISSORY NOTE #9773/E

THIS NOTE REPLACES NOTE #9773/D"

3 There was a previous promissory note "#9773" dated March 27 1997, evidencing a promise to repay a similar loan of US$350,000.00. to Capstan Investment Ltd. by the said Mapp (Succs.)"... for three months with interest thereon at the rate of twenty percent (20%) per annum ..." That said note was also similarly signed and guaranteed. This sum of US$350,000.00 was on March 27 1997, held by Capstan Investments Ltd on behalf of Fay Tortello. It is not challenged that the said interest was paid by Mapp (Succs.) on behalf of Fay Tortello under the terms of the said note "... on the 28 ^th April, 28 May and 27 ^th June (1997)...". On 5th May 1997, during the currency of promissory note #9773, one Mark Richford, the assistant Manager in Henry Ansbacher (Cayman) Ltd., a Caymanian company managing the said trust fund of Fay Tortello, by facsimile correspondence to the latter, expressed his concern that the said sum of US$350,000.00 was then invested in Mapp (Successors Ltd.), a trading company, instead of in "Jamaica Treasury Notes". He suggested:

"In the circumstances, with respect to the JHG Mapp investment, I would like to propose two alternatives:

• (1) The investment is withdrawn now and the funds invested back into Jamaican Treasury Notes as previously agreed; or

• (2) The TRUSTEE distribute $350,000.00 to you by way of transferring the investment with JHG Mapp (Succs.) Limited.

Please let me know which option you prefer and I will instruct Karen Henney arrange".

4 Fay Tortello, on receipt of the said facsimile correspondence, consulted the appellant, her attorney-at-law then. In his affidavit dated 2 ^nd June 1999, in opposition to the respondent's application for summary judgment, he said:

• "6. That by letter dated 5 ^th May 1997, from Mr. Mark Richford of Ansbacher, the operators of Capstan Investments Limited to Mrs Fay Tortello, Mr. Richford advised Mrs Tortello against placing Capstan's funds at Mapp and suggested two (2) options to her. She attended on me with the letter and asked me to communicate with Mr. Richford to arrange the option which allowed the funds to remain at Mapp. Exhibited hereto and marked "VAC-5" is copy letter dated 5 ^th May l997, Richford to Tortello.

• 7. I spoke to Mr. Richford and he advised me that he would allow the funds to remain at Mapp on the basis that Capstan Investments Limited would hold as nominee of Mrs Tortello for the remainder of the ninety days under the Promissory Note "VAC-3" and thereafter the funds would be distributed to Mrs Fay Tortello who could lend to Ballena (the plaintiff herein) which would then on lend to Mapp.

• 8. This was done by the issue of a note in favour of Ballena Investments Limited (the plaintiff herein), upon the maturity of the note exhibited hereto as "VAC-3". At no time was any money or other consideration paid or given to Mapp by Ballena Investments Limited in return for the issue of the Promissory Note to Ballena.

• 9. At the time I gave a statement to the police in August 1998, no default had been made by Mapp under the note and Mrs Tortello had of her own volition renewed the Promissory Notes as they fell due on several prior occasions".

5 The appellant, at all material times, was the chairman and a director and Ronnie Chin Loy, was the managing director, in J.H.G. Mapp (Succs.). The promissory note #9773/E, the subject matter in issue in these proceedings, being for a duration of six (6) months, would have matured on 24 ^th January 1999. The first payment of interest thereon was due and payable on 24 ^th August 1998.

6 However, after the signing of the promissory note, Fay Tortello, on the 13 ^th August 1998, wrote demanding from the appellant Vincent Chen "the immediate payment" to her of US$350,000.00 "... loaned ... to yourself," and reported the matter to the police. Consequently, on 14 ^th August 1998, a police officer from the Fraud Squad spoke to the appellant, who on 17 ^th August 1998, was interviewed by the police in respect of the complaint of Fay Tortello of the fraudulent obtaining of the said US$350,000.00 by the appellant.

7 On 19 ^th August 1998, attorneys-at-law, Clough Long and Company, sent a letter to the appellant, in the following terms:

"Mr. Vincent A. Chen

8 Tavistock Terrace

Kingston 6

Dear Mr. Chen,

Re: Mrs Fay Tortello

We refer to our several conversations in relation to the indebtedness to the abovenamed.

We hereby demand the immediate payment of the sum of US$300,000.00 with interest thereon.

Yours faithfully,

CLOUGH, LONG AND CO."

8 On the said date, a letter in similar terms was sent to:

"Mr. Ronnie Chin Loy

c/o J.H.G. Mapp (Successors) Ltd.

2A East Avenue

Kingston 13".

9 In his statement to the police on 17 ^th August 1998, the appellant had said:

"At no time did I have any intention of defrauding Mrs Tortello. The second signing of the promissory note issued to Ballena in my personal capacity as a personal guarantee of Mr. Chin-Loy and myself. Mrs Tortello cannot be paid all the money at once because it has been put into stock. I have asked the other Directors of Mapp and the accountant, Mr. Maye, to start pre-paying the principal to Mrs Tortello as of August month end".

10 By letter dated 27 ^th August 1998, a further demand for payment was made on behalf of the respondent. The said letter reads:

"J.H.G Mapp (Successors) Limited

2A East Avenue

Kingston 13

Attention: Mr. Canute Maye

Dear Sirs,

Re: Ballena Investments Limited/Mrs Fay Tortello

We have your letter dated the 21 August 1998.

If our client is not paid within the period of the Statutory Notice dated 19 ^th August 1998, we shall proceed to wind up your company.

Yours faithfully,

Clough, Long & Co.

Per:

Raymond A Clough

c.c. Mrs Fay Tortello".

11 As a consequence repayment of a portion of the said US$350,000.00 was made to the respondent by J.H.G Mapp (Succs.) Ltd. One Brian Wright, a director of the respondent, in his affidavit dated 31 ^st March 1999, at paragraph 8, said:

• "8. The said promissory note matured on the 25th day of January, 1999, and then J.H.G. Mapp (Successors) Limited paid the amount of US$162,688.00, being US$50,000.00 on August 18th 1998, US$50,000.00 on September 18th 1998, US$50,000.0 on October 18th 1998, and US$12,688.00 in December 1998. The balance now due and payable to the plaintiff is the sum of US$187,312.00 with interest, which the maker J.H.G. Mapp (Successors) Limited has refused and neglected to pay to the plaintiff".

12 The balance due on the promissory note, namely US$187,312.00 was not paid to the respondent.

13 A criminal prosecution was commenced in the Corporate Area Resident Magistrates' Court indicting Vincent Chen and Ronnie Chin Loy for the offences of:

• (1) Fraudulent conversion by Vincent Chen "... on divers days between the 22 ^nd day of November 1996, and the 21 ^st day of April 1997... of $350,000.00 US ... on account of Capstan...