Smith
The United Kingdom Privy Council has said that some of the ex parte injunctions granted in the Jamaican courts show a disregard for the rule of law.
The observation was made by the Privy Council, Jamaica's final appellate body, when it handed down its reasons this month for giving the National Commercial Bank (NCB) the go-ahead in January to close the accounts of embattled investment club Olint Corporation Ltd
Olint was first granted an ex parte injunction which barred the closure of the account but the Privy Council said that notice should have been given to NCB of the application for the injunction because the bank had given adequate notice of its intention to close the accounts.
Problem with injunctions
"One of the big points in the judgment for the profession generally is that there is a problem with injunctions being given without notice when there is no urgency," said Michael Hylton, QC, one of the lawyers who represented NCB at the Privy Council.
Attorney-at-law Dave Garcia also represented NCB.
Olint obtained an ex parte injunction against NCB on January 11, 2008. After the injunction expired, NCB opposed the application for an injunction and Supreme Court judge Roy Jones, after hearing legal arguments from the parties, refused to grant an interlocutory injunction until the trial. The Privy Council said, in its written reasons, that it was by no means obvious that Justice Jones was correct to refuse the injunction.
Ruling overturned
The Court of Appeal overturned the ruling of Justice Jones and NCB took the case to the Privy Council.
The Privy Council, in giving its reasons on April 28 for allowing NCB's appeal, made certain observations about the case and in particular about the granting of injunctions.
On November 22, 2007, NCB informed Olint that its accounts would be closed on January 14, 2008, and a request for further extension was refused by the bank on December 27, 2007.
"No explanation has been given for why it was not possible for the bank to be given notice of the application to the court made on January 11, 2008. Their Lordships were told that such last-minute ex parte applications have become common practice in Jamaica," the Privy Council said.
The Privy Council referred to the Jamaican case of investment club World Wise Partners Ltd against RBTT Bank in Jamaica, in which the bank wrote on February 28 to World Wise, saying that its accounts would be closed on May 15, 2008. The Privy Council pointed out that on May 28, 2008, World Wise applied to the Supreme Court for an ex parte injunction, which was granted and was not discharged until after an inter partes hearing on June 13, 2008.
"These cases appear to show a disregard of Rule 17.4 (4), for which no justification is offered. If the rule is not generally enforced, the plaintiffs will be encouraged to make a tactical use of the legal process, which should not be allowed," the Privy Council said. Rule 17 (4) (4) of the Civil Procedure Rules in Jamaica deals with the granting of injunctions.
Possible prejudice
"Among the matters which the court may take into account are the prejudice which the plaintiff may suffer if no injunction is granted or the defendant may suffer it it is; the likelihood of such prejudice actually occurring; the extent to which it may be compensated by an award of damages or enforcement of the cross-undertaking; the likelihood of either party being able to satisfy such an award; and the likelihood that the injunction will turn out to have been wrongly granted or withheld, that is to say, the court's opinion of the relative strength of the parties' cases.
Confidential services
"Factors which the court might have taken into account in this case if there had been a triable issue were, first, that the injunction required the bank to continue against its will to provide confidential services for the plaintiffs; second, that the injunction would require the bank to continue to incur reputational risks and possible exposure to legal action; third, that it was by no means clear that the plaintiffs would be able to satisfy a claim under the cross-undertaking in damages; fourth, that the plaintiff's case was, even if not (as Their Lordships think) hopeless, certainly weak, and fifth, that the plaintiffs could no doubt have obtained alternative banking services from any bank whom they could persuade that they were not running a fraudulent scheme," the Privy Council said.
NCB had taken the decision to close Olint's accounts on the grounds that Olint did not comply with certain requests. One of the requests was the filing of an audited financial statement.
Olint has made several allegations against NCB in the suit which it has filed. The suit is pending in the Supreme Court.
The Financial Services Commission served a cease-and-desist order on Olint in March 2006. Olint, which is headed by businessman David Smith, took the matter to the Supreme Court and lost. Olint has appealed against the Supreme Court ruling which was handed down in December 2007.
barbara.gayle@gleanerjm.com