Higgler loses house to freight forwarder over $20m debt
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ASUPREME Court judge has given a freight forwarder the green light to exercise his power of sale over a house owned by an informal commercial importer or ICI, a class of traders popularly referred to as higglers, which was used as collateral to secure a loan. The debt is alleged to be about $20.5 million. The ICI, Darnel Fritz, the owner of Darnel Fritz Enterprise, had filed a claim against freight forwarder John Collins arising out of a mortgage for US$40,000 and another for US$88,000 held by him and recorded on the certificate of title for her property.
She sought a permanent injunction to restrain exercise of the mortgagee’s power of sale, having argued that the mortgages were registered on her property without her knowledge or permission. Collins filed a defence and counterclaimed for US$159,805.
Justice David Batts threw out Fritz’s case at the end of September, after hearing arguments in July, and gave the go-ahead for Collins to recover the monies owed.
Lawyers for Fritz said they are still getting instructions from their client on whether to appeal Justice Batts’ ruling. According to court documents, Fritz is a businesswoman and owner of Darnel Fritz Enterprise, an informal commercial importer involved in the purchase and sale of goods. Fritz told the Supreme Court that she and Collins had a long-standing business relationship, him being her freight forwarder. Eventually, Collins became a buyer’s agent and she started to buy from him instead of directly from suppliers. Around year 2000, he offered and she accepted a line of credit of US$40,000 and thereafter ordered goods “on consignment” from him, according to Fritz’s evidence. Fritz stated that around 2008, Collins, who has offices in Jamaica and the United States, ordered goods from Proveedora Jiron Inc and gave her a credit arrangement. She received several such shipments between 2008 and 2010, and “whenever I got goods from Proveedora, they were paid for and receipts obtained from the defendant’s company”, she said. According to the court judgment, in 2010 Collins asked Fritz to sign a credit facility of up to US$88,000 and told her that the monthly payments would be US$1,100.
Fritz denied owing the money claimed, saying that she received two containers, which arrived in Jamaica on November 8, 2010 and that she fully paid for the goods.
However, Batts found that as Fritz’s buying agent, Collins would extend credit, grant loans or make advances on her behalf over time; and that up to October 2010, her debt to him, inclusive of the first mortgage over her house in St Andrew, amounted to US$138,974.
Batts found that there was an agreement between Fritz and Collins that her total liability would be settled at US$128,000 and a further mortgage of US$88,000, over the same premises, would be granted in order to secure the debt.
In other words, the judge said, the total due, US$128,000, would be secured by both mortgages.
Fritz failed to pay the sum due in its entirety, Justice Batts found, noting that as at April 1, 2016, she was indebted to Collins in the sum of US$159,805 (about $20.5 million) for principal, interest and late fees.
In dismissing the claim, Justice Batts said there was no basis to prevent Collins from exercising his power of sale under the mortgage.
Fritz was represented by attorneys Paul Beswick, Georgia Buckley and April Grapine-Gayle, while Collins was represented by attorneys Michael Hylton, QC, and Shanique Scott.