JAMAICA

IN THE COURT OF APPEAL

SUPREME COURT CIVIL APPEAL NO. 106/99 SUIT NO. C.L. A060/99

BEFORE: THE HON.MR. JUSTICE DOWNE:R1 J.A. THE HON. MR. JUSTICE HARRl!:;ON, J.A. THE HON. MR. JUSTICE PANTClN, J.A.

BETWEEN: DELROY LINDSAY

AND THE ATTORNEY-GENERAL Of JAMAICA

Dr. Ronald Manderson ..Jones for the appellant

APPELLANT

RESPC:>NDENT

Dennis Morrison, Q.C., and Yolande Whitely for the respondent Instructed by the Director of State Proceedings

January 20, 21, 24 and November 27, 2000

DOWNER, J.A.

Delray Lindsay is a former banker who describes himself as a self- employed

consultant. He is the second defendant in a suit instituted by the Attorney-General to

recover over J$49.m. There are nine other defendants namely, Friends Group Ltd.

(formerly Corporate Resorts Limited (In Receivership), Trevor 0,11,en Patterson,

Claudette Angella Maxwell, Raphael Gordon, Veritat Corporation, KPMG Peat Marwick

(A firm), Corporate Merchant Bank Limited (Vested in the Minister of Finance and

Planning pursuant to the Financial Institutions Act), Myers Fletcher & Gordon (A firm)

and Corporate Group Limited.

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Then Audrey Deer�Williams explained how Lindsay breached Sec.47 of the

Companies Act and why the plaintiff failed to recover its investment as there was a

failure to institute proceedings within two years as required by the Act. Paragraph 12

sets out the means by which the respondent was defrauded thus:

"12. That the Plaintiff alleges that it did not obtain a refund of its monies and was prevented from making such claims due to the fact that the Second Defendant by himself or in conjunction with other Defendants in this suit, contrived and/or conspired to conceal the fact that the share issue had not been fully subscribed by the date of closing of the share issue."

According to Audrey Deer-Williams, the appellant, Lindsay compounded his

wrongful conduct thus:

"13 That further, the Second Defendant caused or allowed to be published in the Daily Gleaner newspaper dated June 12, 1993, a Statement which indicated that the offer had been fully subscribed. That in addition in the Chairman's Report contained in the Annual Report of the First Defendant, for the year ending December 1993, the Second Defendant also made false representations that the offer had been fully subscribed. The Second Defendant also signed on behalf of all the Directors of the First Defendant to the Audited Financial Statements, accompanying the said Report, which accounts indicated the full subscription of the issue."

With respect to this paragraph it is strange that the auditors did not detect the

alleged fraud concerning the "full subscription"

There is a Caymanian aspect for which Audrey Deer-Williams gave evidence.

This evidence was acceptable for an ex-parte application, and might even have been

acceptable at the inter partes hearing having regard to the urgency and its nature. It is

arguable that if the following evidence is to be used at a trial some expert evidence

will be required of Cayman law and there will be the need it seems of some- one from

the Cayman Islands to give the factual evidence. It is difficult to know what weight

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ordinary plaintiff. Although that fact does not give him any privileges, good reason ought

to be shown for the Court below to have made an order requiring a payment into court in

a situation where the Attorney-General is the litigant who seeks the injunction. No good

reason appears to have been offered then, and none has been proffered to us. In a matter

of this nature, the Attorney-General's word is his bond and the Courts of our land will

hold him to it. The history of our country has not so far produced any reason for there to

be any doubt as to the strength and honour of the Attorney -General's word on a matter of

the sort. I refuse to endorse the statement of counsel for the appellant that " honour

cannot be enforced; it is meaningless". It would not be expected that the Attorney­

General of Jamaica would knowingly be a party to the disregarding of an undertaking

given to the Court. If he were to transgress in this way, the Court would not hesitate to

ensure the application of whatever sanction would be necessary to effect the honouring of

that undertaking.

By the Constitution of Jamaica, the Attorney -General is the principal legal

adviser to the Government of Jamaica (section 79(1 )). Furthermore, no one is qualified to

hold or act in the office of Attomey--General unless he is qualified for appointment as a

Judge of the Supreme Court (section 79(4)).

The foregoing provisions of the Constitution, in my view, illustrate the

importance of the office of Attorney-General, and add weight to the canons of

professional ethics set out in The Legal Profession (Canons of Professional Ethics) Rules

which were gazetted on December 28, 1978. (See the Jamaica Gazette Supplement

Proclamations, Rules and Regulations No 71).

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Canon Vl (c) states:

" An Attorney shall not commit a breach of an undertaking given by him to a Judge, a Court or other tribunal or an official thereof, whether such undertaking relates to an expression of intention as to future conduct or 1s a representation that a particular state of facts exists."

Canon V 1 ( d) states:

"An Attorney shall not give a professional undertaking which he cannot fulfil and shall fulfil every such undertaking which he gives."

Although the Attorney- General is a party in the suit, the fact is that he does not

shed his constitutional role as principal legal adviser to the Government of Jamaica by

naming himself plaintiff If the need arises, he will be held bound by the canons of

professional ethics of the legal profession. There is absolutely no evidence that such a

need may even remotely arise. In this regard, the appellant is clutching at what does not

even appear to be a straw. This ground of appeal is, in my view, misconceived.

The other grounds of appeal, except ground 4, are in respect of the alleged

inconsistency of the injunction with , and repugnance to the fundamental right and

freedom to enjoyment of property w.hich the Constitution of Ja.i-naica undoubtedly gives,

as well as the power of the Supreme Court and the geographical extent and jurisdiction of

that power. Ground 4 deals with the affidavit which was filed by the plaintiff in support

of the ex- parte injunction.

Ground 1

"The pre-trial injunction prohibiting disposal of assets in Jamaica and worldwide is inconsistent with and repugnant to the fundamental right and :freedom to enjoyment of property enshrined in sections 13 and 18 of the Constitution of Jamaica."

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Section 13 reads:

"13. Whereas every person in Jamaica is entitled to the fundamental rights and freedoms of the individual, that is to say, has the right, whatever his race, place of origin, political opinions, colour, creed or sex, but subject to respect for the rights and :freedoms of others and for the public interest, to each and all of the following, namely-

(a) life, liberty, security of the person, the enjoyment ofproperty and the protection of the law;

(b) :freedom of conscience, of expression and of peacefulassembly and association; and

( c) respect for his private and family life,

the subsequent provisions of this Chapter shall have effect for the purpose of affording protection to the aforesaid rights and freedoms, subject to such limitations of that protection as are contained in those provisions being limitations designed to ensure that the enjoyment of the said rights and freedoms by any individual does not prejudice the rights and :freedoms of others or the public interest."

Section 18 (1) reads:

"18.-(1) No property of any description shall be compulsorily taken possession of and no interest in or right over property of any description shall be compulsorily acquired except by or under the provisions of a law that-

(a) prescribes the principles on which and the mannerin which compensation therefor is to be determinedand given; and

(b) secures to any person claiming an interest in or rightover such property a right of access to a court forthe purpose of-

(i) establishing such interest or right (if any);

(ii) determining the amount of suchcompensation (if any) to which he isentitled; and

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compulsory acquisition of property because of the exemptions recited in section 18 (2) of

the Constitution.

The Mareva injunction granted by Theobalds, J. in the instant case gave no

property to anyone. The appellant's right of ownership is fully intact. He is merely

temporarily forbidden from dealing with the property up to a certain value in a manner

that would be prejudicial to the legitimate interests of the respondent.

Grounds 2 and 3 bear some co-relation and may be dealt with together. Ground 2

asserts that the Supreme Court has no power to grant a pre-trial injunction that prohibits

the disposal of the appellant's assets in Jamaica and worldwide whereas Ground 3 states

that the Supreme Court has no jurisdiction to prevent the appellant from disposing,

pledging, charging, transferring or dealing with his assets outside Jamaica.

These grounds of appeal are in fact challenging the jurisdiction of the Supreme

Court to grant applications for a Mareva injunction. This challenge is at least twelve

years late, it would seem, as in 1988 this Court sanctioned the granting of a Mareva

injunction. The case in which this was done was Watk.is v. Simmons, S.Simmons,

Watkis & Desnoes (1988) 25 J.L.R. 282. Kerr, J.A. said at page 283: "The jurisdiction

to grant a Mareva Injunction is well established." He reviewed most of the relevant

English cases that had been decided up to that point in time and, having applied the

principles and tests established therein, he concurred in the decision to dismiss the appeal

which had been filed against the order of a Judge of the Supreme Court granting a

Mareva injunction restraining the appellant from disposing of assets. There have been

other occasions on which this Court has pronounced on the validity of the exercise of

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granting such an injunction. The most notable perhaps has been the case Jamaica

Citizens Bank Limited v. Dalton Yap (1994), 31 JLR 42. Rattray, P. at page 51 D said:

''The authorities satisfy me that the Injunction can be made in relation to assets of a defendant held worldwide, as the remedy is in personam and the defendant would be in contempt of the Court's order if he breaches the Injunction in relation to the assets wherever held."

Forte, J.A. (as he then was) referred to the fact that the Watkis case (above) had

established ''that the Courts in our jurisdiction have the jurisdiction to grant Mareva

injunctions."(page 17). After referring to the English cases Derby & Co.Ltd. and others

v. Weldon and others (No. 2) [1989] 1 All ER 1002 and MBPXL Corp v.

Intercontinental Banking Corp Ltd. [1975] CA Transcript 411, he concluded:

" that the Court has jurisdiction to grant a Mareva injunction which extends to assets outside of its jurisdiction provided that (i) there are special circumstances for doing so, (ii) the order is in accordance with the rationale for granting such injunctions i.e. to prevent a defendant from talcing action which may frustrate the plaintiff recovering the fruits of a subsequent judgment, and (iii) that it does not conflict with international law."

It should be noted that the basis of the jurisdiction to grant Mareva injunctions is

not English case law by itself. Even if Dr. Manderson -Jones was correct when he said

that the Mareva injunction was an offshoot of British law which has cropped up in the

garden of our jurisprudence, he was off base in submitting that there was no statutory

basis for it. There is a statutory foundation as was pointed out by Kerr, J.A. in the Watkis

case (supra) (page 283), and Downer, J.A. in the Yap case (supra) (page 61). The

relevant provision is the Judicature (Supreme Court) Act, section 49 (h) which reads thus:

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"49. With respect to the law to be administered by the Supreme Court, the following provisions shall apply, that is to say-

(h) A mandamus or an injunction may begranted or a receiver appointed, by aninterlocutory order of the Court, in all casesin which it appears to the Court to be just orconvenient that such order should be made;and any such order may be made eitherunconditionally or upon such terms andconditions as the Court thinks just .... "

This sub-section is similar in terms to legislation that was passed in England in

the form of section 25 (8) of the Supreme Court of Judicature Act, 1873, which was re­

enacted in 1925 in section 45 (1) of the Supreme Court of Judicature (Consolidation) Act.

It is this provision that has sanctioned in England the granting of Mareva injunctions.

There was further statutory intervention in 1981, but not before some important decisions

such as The Siskina [1977] 3 All ER 803 (House of Lords), Third Chandris Shipping

v. Unimarine [1979] 2 All ER 972 (Court of Appeal), Chartered Bank v. Daklouche

and another [1980] 1 All ER 205 (Court of Appeal), Barclay-Johnson v. Yuill (1980] 3

All ER 190 (Chancery Division-Sir Robert Megarry, Vice-Chancellor), and Prince

Abdul Rahman v. Abu-Taha (1980] 3 All ER 409 (Court of Appeal).

In Third Chandris Shipping v. Unimarine, Lord Denning, MR, in stating his

understanding of the law , said:

"It is just four years ago now since we introduced here the procedure known as Mareva injunctions. All the other legal systems of the world have a similar procedure. It is called in the civil law saisie conservatoire. It has been welcomed in the City of London and has proved extremely beneficial. It enables a creditor in a proper case to stop his debtor from parting with his assets pending trial. Two years ago, the House of Lords had this procedure under their close consideration. It was in The Siskin a. If the House had any

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doubts about our jurisdiction in the matter, I should have expected them to give voice to them, rather than let the legal profession continue in error. But none of their Lordships did cast any doubt on it." (p 983 c-d)

The English Court of Appeal, in Prince Abdul Rahman v. Abu-Taha (supra)

approved the reasoning of Sir Robert Megarry,V-C in Barclay-Johnson v. Yuill

(supra) and held:

"that a Mareva injunction can be granted against a man even though he is based in this country if the circumstances are such that there is a danger of his absconding, or a danger of the assets being removed out of the jurisdiction or disposed of within the jurisdiction, or otherwise dealt with so that there is a danger that the plaintiff, if he gets judgment, will not be able to get it satisfied." (per Lord Denning, MR, at page 412a)."

In view of the foregoing, it seems quite clear that grounds 2 and 3 of this appeal

cannot succeed. The English decisions prior to 1981 as well as our own cases of \f atkis �

and Yap have put the matter beyond doubt that the Mareva injunction is here to stay and

is available in circumstances such as those of the instant case.

Finally, it should be mentioned that in 1981, the passage of the Supreme Court

Act gave legislative approval to the Mareva doctrine in England. This is not to say, in my

view, that it was at all necessary. It was put this way in Odgers' Principles of Pleading

and Practice (22nd edition) at page 63:

"The judicial development of the Mareva injunction is recognized by the Supreme Court Act 1981. Section 3 7 ( 1) re-enacts in substance the Judicature Act 1925, section 43 and section 37 (3) provides:

'The power of the High Court under subsection (1) to grant an interlocutory injunction restraining a party to any proceedings from removing from the jurisdiction of the High Court, or otherwise dealing with, assets located within that jurisdiction shall be exercisable in