Barbara Gayle, Staff Reporter
TOWERBANK Ltd., a Panamanian bank, was successful last week in its suit in the Supreme Court to recover US$156,513 with interest from the Jamaica Broilers Group arising from a line of credit agreement in 1995.
Justice Hazel Harris, after a 10-day hearing, handed down judgment in favour of the bank and ordered Jamaica Broilers to pay the US$156,513 with interest at the rate of 11 per cent per annum.
The bank claimed that Jamaica Broilers owed the money under a letter of credit agreement with the Bahamian bank, First Trader Internation-al Bank and Trust in February 1995. The bank claimed that the agreement was entered into by Capital and Credit Merchant Bank (CCMB) which acted as agent for Jamaica Broilers with First Trade.
On the other hand, Jamaica Broilers contended that it did not owe the bank any money. It filed a counter-claim seeking to recover US$307,026.72 which it said it mistakenly paid to the bank as well as the sum of US$25,477 which had been deposited with First Trade.
Jamaica Broilers had denied owing the money and in 1996, the bank filed a petition to wind up Jamaica Broilers but the Supreme Court threw out the petition.
The bank then sued Jamaica Broilers to recover the money and Justice Hazel Harris began hearing submissions in May 2000.
Attorneys Andre Earle and Charlene Larmond who represented Towerbank argued that Jamaica Broilers entered into a line of credit agreement with First Trade for the financing of letters of credit transactions. Alternatively Capital and Credit Merchant Bank (CCMB) acting as the agent of Jamaica Broilers entered into the said agreement with First Trade on or about February 16, 1995. He said Jamaica Broilers desired to purchase grain from Contin-ental Grain. The price was agreed at approximately US$459,500 and the grain was purchased via a letter of credit.
Mr. Earle argued that it was very important to note that in its authenticated telex of April 26, 1995, CCMB, as agent for Jamaica Broilers, requested First Trade to debit Jamaica Broilers' account at maturity and refinance for 150 days to be paid in three equal monthly instalments. Jamaica Broilers paid the first two instalments with interest in September and October 1995 but had refused to pay the final instalment of US$156,513.35.
Jamaica Broilers which was represented by Dennis Goffe, Q.C., had denied that it entered into a line of credit facility agreement with First Trade. It admitted paying the first two instalments of US$153,513.37 each, in reliance on representations of fact made to Jamaica Broilers by First Trade and Towerbank in letters dated August 8 and 14 1995.
Jamaica Broilers contended that First Trade went into voluntary liquidation on or about November 1995 and at that date the sum due to Jamaica Broilers by First Trade stood at US$25,477.25. Mr. Goffe submitted that neither First Trade nor Towerbank had, up to the time of purported assignment for payment of the first two instalments, advised Jamaica Broilers or CCMB that Towerbank was a related entity and a creditor of First Trade. He said there was no dispute that Jamaica Broilers and CCMB were related in that Jamaica Broilers owned 20 per cent of the shares in Capital & Credit Holdings Ltd. which, in turn, owned CCMB. Jamaica Broilers also contended that First Trade had refused to pay the amount standing to the credit of the defendant and was indebted to the defendant in the amount of US$25,477.25. The court was asked to order Towerbank to pay the sum of US$307,026.72 which it said it mistakenly paid to the bank. Mr. Goffe asked the court to find that the sums of U$$300,026.72 paid by Jamaica Broilers to Towerbank were based on a mistake of fact, induced by First Trade and Towerbank's representations and Towerbank ought to repay the money.
The judge in dismissing the counter-claim, ruled that Jamaica Broilers was neither entitled to the sum of US$307,026.72 nor entitled to set off the sum of US$25,477.25 from the amount due to the bank. "It is also necessary to state that no evidence had been adduced by the defendant through any of its very able and proficient witnesses to establish that payments made by the defendant were done as a result of its mistaken reliance upon representations by First Trade," the judge said.
