Winston Finzi v Jamaican Redevelopment Foundation Inc. and Others
| Jurisdiction | UK Non-devolved |
| Judge | Lord Leggatt |
| Judgment Date | 27 July 2023 |
| Neutral Citation | [2023] UKPC 29 |
| Court | Privy Council |
| Docket Number | Privy Council Appeal No 0016 of 2020 |
[2023] UKPC 29
Lord Lloyd-Jones
Lord Hamblen
Lord Leggatt
Lady Rose
Lord Richards
Privy Council Appeal No 0016 of 2020
Privy Council
Trinity Term
From the Court of Appeal of Jamaica
Appellant
Lord Anthony Gifford KC
Terri-Ann Guyah Tolan
Aisha Thomas
(Instructed by Guyah Tolan & Associates (Jamaica))
Respondents
Sandra Minott-Phillips KC
M. Maurice Manning KC
(Instructed by Myers Fletcher & Gordon (London))
Heard on 21 March 2023
In this action, begun in 2017, the claimant and appellant, Mr Winston Finzi, seeks to reverse the results of extensive litigation between himself and the first respondent, the Jamaican Redevelopment Foundation, Inc (“JRF”), which took place between 2003 and 2014. He does so by alleging that a series of judgments given and settlements reached in that litigation were all obtained fraudulently. The judge (Laing J) granted summary judgment dismissing the claim as an abuse of process. The Court of Appeal refused permission to appeal from that decision. But Mr Finzi has been granted leave to appeal to the Privy Council against the order refusing him permission to appeal to the Court of Appeal. He contends that the courts below erred by finding that failure to exercise reasonable diligence in uncovering and alleging fraud rendered his claim an abuse of process. He argues that the decision of the United Kingdom Supreme Court in Takhar v Gracefield Developments Ltd [2019] UKSC 13, [2020] AC 450, handed down after the Court of Appeal heard his application for permission to appeal, shows that there is no such requirement at common law. This appeal also raises questions about whether Mr Finzi's claim is based on any “fresh” evidence and what constitutes “fresh” evidence for the purpose of a claim to set aside a judgment or settlement for fraud.
Although two individual employees or agents of JRF are also respondents to the appeal, no scenario has been suggested in which an appeal in relation to them could succeed if the appeal in relation to JRF cannot. In these circumstances it is unnecessary to consider their position separately and this judgment will focus throughout on the claim against JRF.
The historical background to the litigation between Mr Finzi and JRF is described in the judgment of Laing J:
“It is a matter of historical record that the 1990s in Jamaica was characterised by a period of extremely high interest rates. The reasons for this will be debated for years to come, but what is undeniable is that this high interest rate regime wreaked havoc on and/or led to the financial ruin of a number of individuals and businesses who became debtors and who were unable to service their debts. There was also what has been termed a financial meltdown of various financial institutions of various sizes and in 1997 the Government of Jamaica established the Financial Sector Adjustment Company (FINSAC) whose mandate was to restore stability to the financial sector. In pursuance of this mandate FINSAC acquired a number of non-performing loans, debts, liabilities and securities which belonged to those financial institutions which had accepted the intervention and assistance of FINSAC.”
A large portfolio of debts acquired by FINSAC was later sold to JRF. These debts were assigned to JRF by a deed of assignment dated 30 January 2002. They included a loan of JA$30.9m odd made to Mr Finzi personally, as well as loans made to companies that he controlled for which he had given personal guarantees.
Attempts made by JRF to recover these debts resulted in a series of lawsuits, two of which are chiefly relevant for present purposes.
In November 2004 JRF began a lawsuit against Mr Finzi (“the 2004 action”) claiming repayment of a loan of US$464,472 (plus interest) made by Mutual Security Merchant Bank and Trust Company Ltd (“MSMB”) to Mr Finzi in March 1995.
The background to the loan was that one of Mr Finzi's companies, Avalon Investments Ltd (“Avalon”), had entered into an agreement in 1987 to purchase property in Providence Estate, Montego Bay (“the Providence property”) for the sum of US$464,472. The vendors failed to complete the sale and Avalon sued for specific performance of the sale agreement. This action ultimately resulted in a consent order made in December 1994 for specific performance of the agreement. Mr Finzi borrowed the sum required to pay the purchase price from MSMB on terms set out in a letter dated 10 March 1995. Avalon had in fact been struck off the register of companies in 1991, which no doubt explains why the loan was not made to Avalon but to Mr Finzi personally. He agreed to provide as the principal security for the loan a first registered mortgage of the Providence property.
The loan money was disbursed and used to complete the purchase, but the instrument of transfer provided by the vendors was in the name of Avalon. MSMB requested Mr Finzi's attorneys to have the title transferred into the name of Mr Finzi. However, this was not done and MSMB was not registered at that time as a mortgagee, although copies of the title deeds were deposited with MSMB.
The claim made by JRF in the 2004 action for repayment of the loan was supported by a detailed affidavit setting out the history of the loan and exhibiting relevant documents, including documents evidencing the assignment of the loan to FINSAC and then to JRF. This evidence identified the loan as the debt of JM$30.9m owed by Mr Finzi which was assigned to JRF by the deed of assignment (see para 4 above).
In an amended defence in the 2004 action Mr Finzi admitted the terms on which MSMB agreed to make the loan to him, that the loan was made and that he had not repaid it. Insofar as his amended defence gave any reason for denying that he was liable to repay the loan, his case appeared to rest on the fact that the title to the Providence property was not in his name.
JRF applied for an order striking out the amended defence, granting summary judgment for the amount claimed and declaring that JRF had an equitable mortgage over the Providence property for this amount. Following a contested hearing, McIntosh J made such an order on 15 July 2005. Her reasons were given in a written judgment in which she summarised the substance of Mr Finzi's defence as follows:
“In effect he is claiming that since the title [to the Providence property] is not in his name he has no obligation to repay a loan which he obtained to complete the purchase and which resulted in the completion of the purchase with the certificate of title available to him to effect transfer into his name. As long as he does not do what he should do then the claimant is not entitled to payment of interest nor it seems even to repayment of the principal.”
The judge went on to say that she knew of no principle of law which would allow Mr Finzi or any defendant to avoid liability on this basis. She concluded that nothing in the amended defence disclosed a reasonable defence to the claim and that nothing had been put forward which disclosed any reasonable possibility of evidence becoming available to Mr Finzi which might give his case any prospect of success.
Mr Finzi filed a notice of appeal against the judge's order, but he did not pursue the appeal and in May 2006 he paid the judgment debt to JRF.
The second relevant action (“the 2005 action”) was begun by JRF in December 2005. In this action JRF sued Mr Finzi on a personal guarantee of loans made by MSMB to one of his companies, Jamaica Beach Park Ltd. This action followed three lawsuits in which Mr Finzi had tried, unsuccessfully, to prevent JRF from appointing receivers over some property on which the loans to Jamaica Beach Park Ltd were secured and from exercising powers of sale. The property was ultimately sold at auction in June 2005 for US$6m and the net proceeds of sale were applied to reduce the company's indebtedness. But JRF claimed in the particulars of claim that Jamaica Beach Park Ltd remained indebted in sums totalling some US$6m and JA$64.8m.
On 2 May 2006 JRF applied for in the 2005 action, and was granted, a freezing order over Mr Finzi's assets. The freezing order was discharged a few days later by a consent order made on 11 May 2006. Under the terms of the consent order, it was agreed that, after Mr Finzi had paid the judgment debt in the 2004 action (which he paid by a cheque dated 11 May 2006), JRF would retain its equitable mortgage over the Providence property as a continuing security for the amounts claimed in the 2005 action.
There were no further relevant developments in the 2005 action until December 2011, when a meeting between the parties took place to discuss settlement. Following this meeting, JRF sent a letter to Mr Finzi dated 25 January 2012. This letter reviewed in detail the history of the loans to Jamaica Beach Park Ltd and contained fresh calculations of the outstanding balances. The letter explained that these calculations:
“were computed specifically for purposes of this letter and may not match previous statements and calculations that you have been provided. However, in all instances the calculations provided herein will be lower than balances that you have previously been provided. These calculations were prepared with an eye toward settlement, and are provided without prejudice and are subject to revision.”
The calculations showed a total outstanding principal amount of US$1,897,538 plus interest of some US$2.6m, making a total sum claimed of some US$4.4m.
On 4 June 2012 judgment was entered against Mr Finzi in the 2005 action (it is unclear on what basis, but it appears to have been because of a procedural default) for a sum of US$3,761,908. This...
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