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Businessman Winston Finzi loses land fight with JMMB

Published:Sunday | September 20, 2015 | 9:00 AMMcPherse Thompson
In this 2011 Gleaner photo, Winston Finzi and Marcellas James are seen at a reception in Kingston.
JMMB Merchant Bank headquarters in New Kingston.
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Businessman Winston Finzi has failed in his second attempt to reverse the sale of a half-billion-dollar property taken over by JMMB Merchant Bank for outstanding debt.

Finzi turned to the Court of Appeal hoping to reverse a ruling by Supreme Court Justice Brian Sykes that JMMB's sale of the property to recover debt valued at around $556 million in 2013, should stand, while discharging an injunction that was blocking the closure of the transaction.

JMMB Merchant Bank was formerly known as Capital and Credit Merchant Bank, which was acquired by JMMB group in 2012 and rebranded.

Sykes' decision was upheld by the Court of Appeal in a ruling by Justice Dennis Morrison.

The property in question is located in St James - Lots 13 and 14 Mahoe Bay - and was held by Finzi. Mahoe Bay Company Limited, of which he is a director, holds another seven contiguous parcels of land at Mahoe Bay.

Between 2006 and 2009, Finzi borrowed money from CCMB, which was secured by a mortgage granted by Finzi over a house in Beverly Hills, St Andrew as well as the two lots, in addition to the seven lots under a mortgage registered in January 2010, granted by Mahoe Bay.

The debt was guaranteed by Mahoe Bay Company.

In 2013, JMMB, alleging repeated default on loan terms, instituted a claim against Finzi and Mahoe Bay Company to recover sums in excess of US$3 million and J$200 million.

Finzi and Mahoe Bay Company have defended the claim on various bases and counterclaimed against JMMB for, among other things, an account and damages for breach of contract.

JMMB Merchant sold the property earlier this year.

By letter dated May 15, 2015, Hylton Powell, the law firm representing JMMB, wrote to Finzi's attorneys to advise that the nine lots registered to Finzi and Mahoe Bay Company had been sold to Asset Securitisation Trust Limited for US$2.75 million; that agreements for sale were executed on April 21, 2015, and that the sale was scheduled for completion on that date. The price was later reduced to US$2.67 million (approx J$310 million).

On July 9, apparently spurred by that letter as noted by Justice Morrison, Finzi and Mahoe Bay Company applied for an injunction to stop JMMB from transferring lots 13 and 14 to the buyer, on the basis that he had already sold the lots to a different party on April 18.

Finzi also told the court then that his purchaser, Marcellas James, had lodged a caveat against the sale of any of the properties on April 19, citing her interests as the buyer.

UNDERPRICED

The businessman also charged that JMMB had sold the land at a price well below its purchase price of US$500,000.

JMMB's lawyers told the court that James was connected to Finzi as the mother of his child/children.

Supreme Court Justice Chester Stamp approved the injunction, which barred JMMB for five days to July 14. Finzi and Mahoe were instructed to pay over $100 million to the court on or before the expiration date for the injunction and ordered him to file further affidavits showing that there was a serious issue to be tried.

Justice Sykes discharged the injunction on July 14, based on an application filed by JMMB, but granted a stay of his decision until July 23 to allow Finzi to appeal his ruling.

In their notice of appeal to the higher court, filed on July 22, Finzi and Mahoe Bay advanced a number of complaints, including a suggestion that Justice Sykes erred by allowing himself to be influenced by pleadings prepared by Hylton Powell in the light of Finzi/Mahoe Bay's contention that the company and Michael Hylton QC, who represented JMMB in the matter, had acted for Finzi in the past.

Both Justice Sykes before whom that application was first made, as well as Justice Morrison rejected the request to bar Hylton.

Finzi's attorney, Dr Christopher Malcolm, had also asked Justice Morrison to recuse himself from the case after the judge revealed that his wife, a partner in the firm DunnCox, had responsibility for the share sale transaction with Jamaica Money Market Brokers Limited that ultimately led to the takeover of CCMB and the change of name.

The judge had disclosed the connection himself previously and all the parties then had agreed that they had no problem with him hearing the case.

Malcolm's recusal request in a letter to the judge was made at the conclusion of submissions and before Justice Morrison could render his decision.

Morrison refused the request on the basis that no satisfactory reason had been advanced for him to set aside what he considered to be a clear and unequivocal waiver by Finzi/Mahoe Bay of their right to object to him continuing to hear the matter after his earlier disclosure.

On July 23, the date on which the stay of the order made by Justice Sykes would have expired, Justice Marva McDonald-Bishop granted an interim injunction restraining JMMB's transfer of lots 13 and 14 to Asset Securitisation Trust pending the hearing of an appeal. She also granted a further interim stay of Justice Sykes' order until July 28, the date fixed for another hearing in the case.

On July 24, JMMB filed a counter-notice of appeal in which it contended that the decision of Justice Sykes to discharge the ex parte injunction granted by Justice Stamp should be affirmed.

Justice Morrison ruled that the Finzi/Mahoe Bay application did not meet the threshold of a good arguable appeal, and as such it was unnecessary to consider JMMB's counter-notice of appeal.

Appearing with Dr Malcolm was attorney Hugh Wildman for Finzi and Mahoe Bay Company. Hylton and Shanique Scott represented JMMB Merchant Bank, while attorneys Hugh Small QC and Jerome Spencer appeared for the interested party, Asset Securitisation Trust.

mcpherse.thompson@gleanerjm.com