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Judges jettison email in JMMB, Finzi lawsuit - Supreme Court rules it's privileged; Appeal Court calls it hearsay

Published:Sunday | June 26, 2016 | 6:46 AMMcPherse Thompson
JMMB Merchant Bank in New Kingston.

The Court of Appeal has sided with a Supreme Court ruling that details of an email used in witness statements be removed from evidence in the trial of a lawsuit by JMMB Merchant Bank (JMMB-MB) against businessman Winston Finzi and his Mahoe Bay Company.

Hearings in the lawsuit were suspended pending the appeal.

In May 2015, based on an application by JMMB-MB, Supreme Court Justice Brian Sykes struck out portions of the witness statements of Abraham Dabdoub and Finzi, filed on behalf of Finzi and Mahoe Bay.

JMMB-MB argued that parts of the statements included ‘without prejudice’ communication that is privileged, and that privilege had not been waived. As such, the bank argued that the email was not subject to disclosure and should not form part of the trial – and Sykes agreed.

Finzi appealed Sykes’ decision.

The Court of Appeal sided with the lower court, but while it jettisoned the appeal earlier this month, Justice Marva McDonald-Bishop, who wrote the unanimous judgement, did not agree with the Supreme Court that the communication was privileged, and ruled accordingly.

The case has its genesis in a dispute between Finzi and Ryland Campbell concerning the purchase of shares in Capital & Credit Merchant Bank Limited (CCMB) in or around 2005, which was then a subsidiary of Capital and Credit Finance Group (CCFG) Limited, headed by Campbell.

Jamaica Money Market Brokers purchased CCFG in 2012, including the flagship business CCMB.

ST LUCIA COURT PROCEEDINGS

The Finzi-Campbell dispute led to court proceedings in St Lucia. Finzi and Mahoe Bay contend that based on orders made by the court in those proceedings, he is entitled to a portion of shares that were held in CCMB by Weststar International, a company owned by Campbell.

During negotiations to buy Capital & Credit, JMMB held talks with Finzi concerning their interest in acquiring shares in CCMB. McDonald-Bishop noted that at the time of those discussions, JMMB had no association with Finzi, Campbell or Weststar.

On May 23, 2012, during the course of the discussions, JMMB director Patricia Sutherland sent the email communication to Finzi. The following day, JMMB submitted a formal offer to the CCFG board to acquire the group.

After acquisition, CCMB was rebranded JMMB Merchant Bank.

JMMB-MB later sued Finzi and Mahoe Bay to recover outstanding loans made to them by CCMB.

Using the estoppel defence, Finzi, referencing the email communication between Sutherland and himself, asserts that he was given assurances by JMMB, and on that basis, he did not assert his rights as a CCMB shareholder at the time of the acquisition.

He contends that the communication provides support for his counterclaim, saying it shows that JMMB, from its own due diligence, found there were sums owed to him by CCMB.

McDonald-Bishop ruled, however, that there was no nexus between the negotiations between Finzi and JMMB regarding acquisition of the CCMB shares and the later dispute between him and JMMB-MB regarding the debt and, as such, the email communication was irrelevant to the lawsuit in the Supreme Court.

She also noted that it could be challenged under the hearsay rule.

But McDonald-Bishop also ruled that the email was not, as JMMB argued, a “without prejudice” communication and that the details of the discussions to which it refers are not subject to legal professional privilege.

In dismissing the appeal, McDonald-Bishop affirmed that the details of discussions to which the email refers are inadmissible because they do not qualify for exception from the hearsay rule. She ordered that they be struck from the witness statements of Finzi and Dabdoub.

mcpherse.thompson@gleanerjm.com