Tue | Feb 20, 2018

Citing fraud allegations, appeal court orders trial in Sagicor Bank lawsuit

Published:Friday | July 15, 2016 | 12:00 AMMcPherse Thompson
A branch of Sagicor Bank.

The Court of Appeal has rolled back a summary judgment that favoured Sagicor Bank Jamaica Limited and ordered a trial in a lawsuit that involves a disputed loan and accusations that the bank may have committed fraud.

Bank customer Marvalyn Taylor-Wright, who is a lawyer, said the lawsuit filed against her by Sagicor Bank five years ago was based on a forged promissory note.

Appellate judge Hilary Phillips said in a July 1 ruling that issues surrounding the disputed promissory note and whether it was forged require investigation, and cannot be a basis for summary judgment.

The appeal court set aside the April 2014 judgment by Supreme Court Justice Brian Sykes, and ordered that the civil suit be tried by a different judge.

A summary judgment refers to a ruling without a full trial where the defence appears to have little prospect of success.

According to court documents, Taylor-Wright borrowed $21.76 million from Sagicor Bank on July 27, 2007, which she said was secured by a promissory note dated seven days before on July 20, as as residential property in Stony Hill, St Andrew, and commercial property at Duke Street, Kingston.

However, Sagicor Bank holds a note dated July 27. Taylor-Wright contends the signature on that document is forged.

Sagicor Bank sued Taylor-Wright in March 2011 to recover $31.66 million in loan and credit card debt. The bank claimed that she last made a payment on the loan in December 2009.

Taylor-Wright subsequently paid off the credit cards but disputed the loan, saying that under the July 20 promissory note, she owed no liability to the bank as the document did not contain any agreed interest rate and was therefore incomplete.

She said the July 20 note was witnessed by Wilton South of the Mandeville branch of Sagicor Bank. She also claimed that she never signed a note dated July 27.

Taylor-Wright said in court documents that she made a formal complaint about what she perceived was the bank's fraud to the Organised Crime Investigation Division (OCID).

The lawyers for both sides said they didn't know the status of the OCID complaint. Sagicor Bank denies wrongdoing.

Taylor-Wright also told the court that she hired forensic document examiner Andrea Thomas, whose report in July 2012 found that the author of the signature of the July 27 promissory note was not the same as those in the other loan documents submitted for comparison.

In the Supreme Court application for summary judgment, Justice Sykes ruled in favour of Sagicor Bank and ordered Taylor-Wright to pay damages of just under $40 million plus interest of $11,015.81 per day dating from February 18, 2013.

Taylor-Wright appealed the ruling on April 22, 2014. Her attorney, Ransford Braham, QC, argued that the issues raised by Taylor-Wright as to the forgery or illegality of the July 27 promissory note should be determined in a trial and not on summary judgment.

He said since the possibility existed that the July 27, 2007 promissory note was unenforceable his client was not obligated to repay Sagicor.

Braham also challenged the sum awarded by Justice Sykes.

Sagicor, in the meantime, denied the promissory note was forged.

The bank's attorney, Sandra Minott-Phillips, argued that summary judgment had been properly awarded as Sagicor's claim had a real prospect of success. Her argument relied on Taylor-Wright's admission that she had taken out the $21.76 million loan with interest and provided security for the debt; the July 20 promissory note which Taylor-Wright admitted to signing and which Minott-Phillips contended was identical in content to the July 27 note; as well as other documents.

Minott-Phillips contended that even if the July 27 promissory note was tainted with fraud, there are instances where courts were inclined to allow parties to recover under illegal contracts.

In her written judgment returning the case to the lower court, Justice Phillips noted Taylor-Wright's allegations that forgery was evident by the fact that there are three promissory notes: one signed by her but not witnessed by Wilton South, agent of Sagicor Bank; one signed by herself and witnessed by South on July 20, 2007; and one that Sagicor Bank alleged that she signed in Roosevelt Gillelt-Chambers' presence on July 27, 2007.

"The issues which arise on the disputed facts in this case must be subject to a trial," Justice Phillips said.

The appellate judge also noted Taylor-Wright's unchallenged evidence that she had a history of hostility with Chambers and had never conducted any portion of the loan transaction at Sagicor's Duke Street branch; the fact that Sagicor Bank has admitted to not being in possession of the genuine note; and the finding of the forensic examiner that her signature on the document was forged.

Justice Phillips, with whom Justice Mahadev Dukharan and Justice Almarie Sinclair-Haynes agreed, ruled that the varying accounts as to whether the signature on the July 27 promissory note was that of Taylor-Wright raised issues that could affect determination of Sagicor Bank's claim, since Taylor-Wright could not be held liable on a promissory note that may contain her forged signature.

Phillips ordered that date for a case management conference "be fixed at the earliest possible convenient date".