Trust matter heads to trial
A decision handed down by the Jamaican Court of Appeal last week has given a Cayman Islands businessman some breathing space in an ongoing civil court ‘hot dispute’ over the management of a US$14 million trust.
In May 2011, a Jamaican judge granted summary judgment for breach of fiduciary duty – among other claims – against Delroy Howell, Kenarthur Mitchell and First Financial Caribbean (Jamaica) Ltd. Messrs. Howell and Mitchell appealed that judgment and succeeded on Friday, 18 January, when the Jamaican Court of Appeal allowed their appeal and set aside the 2011 summary judgment.
Mr. Howell said this week that he had been “vindicated” by the Court of Appeal’s ruling.
Mr. Howell’s attorney, Douglas Leys, QC, said Tuesday that the court’s reasons for setting aside the initial summary judgment were not immediately given. However, Mr. Leys said he believed the court had taken seriously the claims made by Mr. Howell in relation to the case.
First, Mr. Leys said it was argued on behalf of Mr. Howell that the trust companies involved in the case sustained “no real loss” as had been alleged in the initial lawsuit against Mr. Howell and Mr. Mitchell. Second, Mr. Leys said the judge who granted the initial summary judgment had not given adequate consideration as to where the matter should be heard. It was Mr. Leys’ argument that the case should have come before the court in the Turks and Caicos Islands rather than in Jamaica.
Mr. Leys said the matter would now proceed to a full trial on the merits in Jamaica.
Representing the First Financial Caribbean Trust Company Ltd. in the case was Michael Hylton, QC.
Mr. Hylton said it was “inconceivable” that the jurisdictional issues in the case could have led to the successful appeal as they had already been decided. Mr. Hylton said the issues surrounding the case and claims made in it were quite complex and likely needed a trial setting to sort everything out.
The original lawsuit, filed in Jamaica during 2010, involved claims made on behalf of an individual who Mr. Howell alleged to have “usurped” control of the company managing the trust.
Mr. Howell managed First Caribbean Financial Trust Company Ltd, as chief executive officer until mid-April 2010. Mr. Howell has said the legal dispute occurred only after he was forced out of that trust company.
The claim dating from 19 August, 2010, was made in a Jamaican court by First Financial Caribbean Trust Company Ltd and was signed by a Judith Wilchcombe. It accused Mr. Howell and Mr. Mitchell, another First Financial director, of transferring some of the funds managed by the trust company to themselves and other businesses Mr. Howell owned.
Ms Wilchcombe was an employee of First Financial Caribbean Trust Company Ltd and later became a director of that company.
She stated in a court deposition that she had requested and demanded of Mr. Howell information about, and a return of, the trust fund monies “in the face of angry clients demanding their money back”, court records show.
Mr. Howell alleged in court documents that Ms Wilchcombe usurped the management structure of First Financial, and that she was fully aware of the transfer of various trust fund monies to other accounts or other business ventures. Ms Wilchcombe denied that she was aware of the transactions, according to court records.
“(Mr. Howell) says that the transactions involved investments, which were to the benefit of the trust until the improper usurpation of the claimant’s (referring to First Financial Caribbean Trust Company) management structure by Miss Wilchcombe,” a Jamaican judge wrote in a 15 October, 2010, judgment regarding an asset freezing order in the case. “It is…a matter of hot dispute whether Messrs. Howell and Mitchell have been removed as directors (of First Financial Caribbean Trust Company Ltd) and whether the shareholding has since been adjusted, but that is for another forum to decide,” the judge wrote.
It has been reported in other media that Mr. Howell has filed a claim in the Turks and Caicos Islands seeking to correct the register of First Financial Caribbean Trust Company Ltd. First Financial was formed in the Turks and Caicos Islands in 2001.