Barbara Gayle, Staff Reporter
A COMPANY which owed the now defunct Century National Bank $11.5 million in October 1993 has been ordered by the Supreme Court to pay the outstanding sum in addition to $34.3 million in interest.
Windsor Commercial Land Company Limited, at 99 Main Street, Ocho Rios, St. Ann had obtained loans from the bank which were secured by promissory notes dated February 3, 1993, September 27, 1990 and May 31, 1989. The loans were further secured by mortgage dated March 22, 1989.
The loans were guaranteed by Selvyn Smith, majority shareholder in the company and Winston G. Crichton.
Century National Bank and Century National Merchant Bank and Trust Company sued the company and the guarantors to recover the outstanding sum. Jamaica Redevelopment Foundation, Inc. which has taken over the debts owing to the banks was subsequently joined as a claimant.
The parties arrived at a consent order on October 27, 1997 after the defendants applied for judgment in default of defence to its counter-claim that the sum of $7 million was overpaid and should be refunded. The consent order stated that an accounting should be taken by the firm of Coopers and Lybrand ( now Price Waterhouse Coopers) and the accountants report what amount if any in their opinion was owing to either party.
The report was submitted to the parties but the defendants claimed that they were not bound by the report . The defendants rejected the report stating that it failed to provide any credible basis for the amount claimed.
Attorneys-at-law Sandra Minott-Phillips and Christopher Kelman of the law firm Myers Fletcher and Gordon who represented the claimants rested their case on the single issue as to the effect of the Consent Order. They said the defendants were estopped from denying the report provided by the accountants.
Mr. Justice Lennox Campbell said the consent order was entered into with an attempt by the parties to resolve their dispute. He said the claimants were of the view that they were owed $36 million while the defendants claimed an overpayment of $7 million.
The judge found that the agreement that culminated in the consent order was fair and reasonable and was entered into with a view of resolving the dispute between the parties. He said the parties had able legal representation.
It was the judge's ruling that the defendants were estopped from denying that as at October 6, 1993 the balance due from the defendants to the claimants was $11,500,344. The judge said the rate of 25 per cent was to be applied to the sum owing from October 7 to September 23, 2005.