Mus­son loses again to Claude Clarke

Jamaica Gleaner - - FRONT PAGE - Jo­van John­son Staff Re­porter jo­van.john­son@glean­erjm.com

LO­CAL BUSI­NESS con­glom­er­ate Mus­son (Ja­maica) Lim­ited has failed in an­other at­tempt to have a court ac­cept its ar­gu­ment that busi­ness­man Claude Clarke “un­justly” en­riched him­self when it paid off a $12 mil­lion debt linked to com­pa­nies he owned.

The Court of Ap­peal dis­missed an ap­peal brought by Mus­son against a Supreme Court de­ci­sion that re­jected the en­rich­ment claims.

Court doc­u­ments show that in 1998, Clarke was the man­ag­ing direc­tor and prin­ci­pal share­holder of High­gate Food Prod­ucts Lim­ited (High­gate) and Candy­man Ja­maica Lim­ited (Candy­man), which also had rights to dis­trib­ute High­gate and Kraft prod­ucts in Ja­maica.

In June of 1998, by a deed of as­sign­ment, Candy­man as­signed its dis­tri­bu­tion rights to Mus­son.

The agree­ment also man­dated that Candy­man would be re­spon­si­ble for bad stock and un­col­lectible goods as at Au­gust 15, 1998.

On Au­gust 18, 1998, three days af­ter the com­pu­ta­tion of the sum of $7.9 mil­lion for bad stock, Clarke is­sued the first in a se­ries of prom­is­sory notes payable to Citibank for the sum of $9.9 mil­lion to be paid to the or­der of Mus­son.

Mus­son claimed that it stood as a guar­an­tor for the loan, but Clarke coun­tered, say­ing that the loan was for the ben­e­fit of Mus­son to re­duce High­gate’s in­debt­ed­ness.

Mus­son ad­vised Citibank to have Clarke set­tle the loan in 2004, but that proved fu­tile and the com­pany said it ended up pay­ing.

In her judge­ment handed down on Sep­tem­ber 23, Jus­tice Al­marie Sin­clair Haynes noted that “the facts of this case are, how­ever, eu­phemisti­cally atyp­i­cal”.

“The cir­cum­stances of this case de­vi­ated from the norm. Mus­son as guar­an­tor re­ceived the pro­ceeds of the loan and not the re­spon­dent (Clarke),” she stated.

FULL PRO­CEEDS RE­CEIVED

She noted that on the oc­ca­sion when Mus­son signed up to guar­an­tee the debt, none of the pro­ceeds from a prom­is­sory note is­sued af­ter­wards were paid to Clarke.

“It is not con­tested that in each case it was Mus­son that re­ceived the full pro­ceeds of each note,” Haynes rea­soned.

“The in­con­tro­vert­ible ev­i­dence is that the re­spon­dent was not per­son­ally in­debted to Mus­son. As al­ready noted, High­gate/Candy­man was in­debted to Mus­son as a re­sult of the ar­range­ment of June 5, 1998. Mus­son, as guar­an­tor, was the re­cip­i­ent of the loan pro­ceeds from Citibank and not the re­spon­dent.”

The judge ac­cepted the 2011 find­ing of the lower court judge, Carol Lawrence Beswick, that Clarke signed the prom­is­sory notes “to as­sist the late (Des­mond) Blades/Mus­son [and] to pre­vent fi­nan­cial em­bar­rass­ment to Mus­son con­se­quent on Mus­son’s cash flow prob­lems”.

Blades, who is de­ceased, was ex­ec­u­tive chair­man of Mus­son at the time.

Mus­son’s lead at­tor­ney, Dr Lloyd Bar­nett, de­clined to speak on the judge­ment, but his clients have the op­tion of ap­peal­ing to the United King­dom-based Privy Coun­cil, Ja­maica’s fi­nal court of ap­peal.

CLARKE

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