Trial now set for June

Barbara Gayle, Senior Court Reporter

The Court of Appeal has set aside a summary judgment against businessmen Delroy Howell and Kenarthur Mitchell, but the case involving the finances of a trust company they oversaw is still headed for trial.

The case relates to a Turks and Caicos operation, First Financial Caribbean Trust Company (FFCTC), from which a lawsuit against the businessmen alleges that millions of dollars had been leaked from the company and that they bear responsibility.

In May 2011, Jamaica's Supreme Court Justice, Patrick Brooks, having heard legal arguments that the men had no real prospect of mounting a credible defence to accusations that they abused their fiduciary responsibilities as directors, issued summary judgment against Howell and Mitchell.

Howell, Mitchell and First Financial Caribbean (Jamaica) Limited - which is owned by Howell - appealed the Supreme Court order that was handed down in favour of FFCTC.

The appeal was decided on January 18 by a panel comprising Justices Seymour Panton, Dennis Morrison and Norma McIntosh. The Appeals Court will issue its written reasons for setting aside Brooks' ruling at a later date. Costs were awarded to Howell and Mitchell.

Case will still go to trial

Michael Hylton, QC, who is representing FFCTC, told Sunday Business that although the summary judgment has been set aside, the case will still go to trial and that a trial date has been set for June.

Brooks' 2011 ruling was the latest episode in a complex, meandering case that started in The Bahamas more than a decade ago, and one of whose battlegrounds is in Turks and Caicos where Howell is in a court fight with one of his former subordinates, Judith Wilchcombe, and an ex-board colleague, Dr Joseph Marzouca, to regain control of FFCTC.

FFCTC began as a repository of trust funds, against which members were issued credit cards with limits based on the amount of money they had on deposit. Initially, that business was conducted by a Bahamian entity called Axxess, but at some point was assumed by Leadenhall Bank.

It was from Leadenhall that FFCTC took over the trust assets and the credit-card operation, an arrangement that led to a court case in The Bahamas.

Under the 2002 agreement, Leadenhall should have handed over approximately US$14 million in trust funds to FFCTC. Later that year, First Financial Caribbean (Jamaica) went to court to enforce the deal. Some of the cash was apparently released.

Six years later, an agreement between the parties led to a consent order by a Bahamian court for the transfer of the remaining US$9.8 million.

Howell and Mitchell were directors of FFCTC during the entire period of the dispute with Leadenhall.

It is being argued in court documents that there were alleged movements of cash to various "subsidiaries" and to Howell's personal accounts and for the purchase of real estate without clarity as to who were the beneficial owners.

A directors' meeting was subsequently called in which Marzouca transferred his shares to Wilchcombe. FFCTC's outstanding shares were ostensibly increased to give Wilchcombe a majority stake and control of the company.

In the meantime, Wilchcombe has launched a series of court actions, arguing that Howell and his right-hand man Mitchell disregarded their fiduciary responsibilities to FFCTC and demanding they properly account for the cash the company held in trust.

Howell and Mitchell are contending that they have not breached any fiduciary responsibilities to FFCTC.

In the appeal, Howell was represented by Douglas Leys, QC, and Roderick Gordon.

Lord Anthony Gifford, QC, Conrad George and Kimone Tennant represented Mitchell and First Financial Caribbean (Jamaica) Limited. Michael Hylton, Kevin Powell and Sundiata Gibbs represented FFCTC.

barbara.gayle@gleanerjm.com