McPherse Thompson, Assistant Editor - Business
Capital and Credit Merchant Bank (CCMB) has emerged victorious in its court fight with Lenbert 'Lennie' Little-White and Cheryl Ryman, directors of Orange Valley Holdings Limited, to recover a debt of J$17 million.
Supreme Court Justice Ingrid Mangatal dismissed the duo's defence as "fanciful" and their case as fraught with unconvincing testimony.
Orange Valley, principally owned by Little-White and associated company Palm Productions Limited, is in the tourism business and has investments in film and video production and other enterprises.
Mangatal, in upholding a default judgment in favour of CCMB, said Little-White and Ryman failed to convince the court that they could mount a successful defence.
Neither Little-White nor his attorney returned calls on whether they would pursue the case further. CCMB's lawyers, Henlin Gibson and Henlin, declined to comment.
Court documents indicate that the case - in which hearings began July 19, 2012 and concluded three and a half months later on November 2 - surrounded a J$17-million loan issued to Orange Valley Holdings in August 2009.
failed to honour obligations
Both Little-White and Ryman "irrevocably and unconditionally guaranteed the payment of all principal and interest and other amounts due or owing or to become due and owing by the borrower to CCMB", according to the loan agreement.
CCMB said it made a demand on the directors to pay the loan after Orange Valley Holdings defaulted, but that they failed to honour their obligations.
The bank subsequently filed suit against Little-White and Ryman and on February 9, default judgment was entered against the directors in default of 'acknow-ledgement of service', which is a procedural requirement for the defendant in a lawsuit to sign and file the legal documents served on them with the court in which they are being sued.
If the defendant does not respond, the party suing may seek a default judgment from the court.
Damages was assessed at J$15,033,287.73 plus interest at six per cent per annum.
Two months later, on April 24, the directors filed notice asking the court to set aside the default judgment on grounds that they were not properly served or not served at all with the claim form and particulars of claim.
They also contended that they had a reasonable prospect of successfully defending the claim and that they have given a good explanation for the failure to file an 'acknowledgement of service'.
The directors' claim, however, was contradicted by evidence from process server Canute Ashmead, who said Little-White was properly served with the court documents at his Kingston office on January 24, 2012.
Ashmead also said that he left the documents for Ryman with Little-White. Both work in the same office and they also live together.
Little-White disputed being served, saying he was never at his office on January 24.
In sworn testimony, Little-White said that on January 23 he travelled to Outameni Experience, his tourist attraction business in Trelawny, and did not return to Kingston until January 25.
The judge, however, was not persuaded by his testimony.
In summing up the case, Justice Mangatal said it was curious that Little-White stated that "personal service on me at the office was not sufficient to enable" his co-defendant Ryman to ascertain the contents of the documents.
"Yet, in cross-examination he admits that Ms Ryman is a director of Orange Valley Holdings Limited and Media Mix Limited," Justice Mangatal said. Media Mix is the group's production company.
Little-White eventually acknowledged in court that both Ryman and himself executed the loan documentation on behalf of Orange Valley Holdings and agreed to guarantee the debt.
"Curiously, he at first in cross-examination indicated that he can't speak to whether Ms Ryman also executed the joint and several
guarantee," the judge noted in her ruling.
Little-White made the concession after it was pointed out to him that the directors' proposed defence acknowledged signing the guarantee.
not given to embellishment
In the end, Mangatal was more persuaded by the process server, whom she found to be a witness who gave his evidence in a calm and convincing manner and not given to embellishment.
"He was consistent in saying that he had seen Mr Little-White on the day of the alleged service and to my mind, he was not shaken in cross-examination in any material way," the judge said.
She said the details of Ashmead's "description of the entire event, including how Mr Little-White was dressed, what was discussed in the conversations between himself and Mr Little-White and (his secretary) Ms (Camille) Richards, strike me as authentic and lend themselves to credibility."
On the other hand, she said, "I was not impressed with the demeanour of either Mr Little-White or Ms Richards. I formed the impression that Mr Little-White was being evasive, particularly when he spoke of how mail reaches him, of Ms Ryman and whether she had signed the 'joint and several guarantee', and further, his reasons for stating why the documents were not brought to the attention of Ms Ryman are not credible."
The judge also found that: "In my judgement, Mr Little-White gave his evidence denying his presence in the office in an attempt to have the default judgment set aside, and to avoid his and (Ryman's) not inconsiderable liability and indebtedness to CCMB."
She accepted Ashmead's evidence that Little-White was served with the court documents on January 24, 2012 and found as a fact that he accepted documents from the process server on behalf of Ryman and did indicate that he would ensure Ryman received them.
In their proposed defence, Little-White and Ryman alleged that CCMB breached its fiduciary duty to them by failing to advise them to seek independent legal advice.
However, the judge said there were no facts alleged in Little-White's affidavit or in the draft proposed defence that takes the case outside of the ordinary relationship of banker and customer.
Little-White admitted under cross-examination that he read the guarantee, understood and signed it.
Mangatal ruled that Little-White and Ryman are engaged in several businesses and that the transaction was made for the benefit of their company, Orange Valley Holdings Limited.
"The claim that the execution of the guarantee was involuntary is, on the basis of the evidence presented, without any merit or real prospect of success because there is nothing on the evidence that could constitute duress. It is the defendants' duty to satisfy the court, on the evidence presented in support of the application, that they have a defence with a real prospect of success and they have failed to do so. In my judgement, the proposed defence is fanciful."