Deslauriers et Al v Guardian Assets Management Ltd

• Jurisdiction: Trinidad & Tobago
• Court: Court of Appeal (Trinidad and Tobago)
• Judge: Smith, JA.
• Judgment Date: 03 February 2016
• Neutral Citation: TT 2016 CA 2
• Docket Number: Civil Appeal No. 259 of 2011 & CV 2008-000393
• Date: 03 February 2016

Court of Appeal

Mendonca, J.A.; Smith, J.A.; Moosai, J.A.

Civil Appeal No. 259 of 2011 & CV 2008-000393

Deslauriers et al

and

Guardian assets Management Limited

APPEARANCES:

Mr. P Knox QC, Mr. I Benjamin,

Mr. J Almeida, appeared on behalf of the appellants

Ms. D Peake SC, Mr. K Garcia, Appeared on behalf of the respondent

Contract Law - Appeal — Claim for judgment on the counterclaim and a stay on the respondent's claim pending an assessment of the counterclaim — Whether the respondent misrepresented or failed to disclose their capacity to provide further funding for the project — Whether the respondent made a representation which induced the appellants to enter into the loan transaction — Whether the respondents had a duty of disclosure.

I have read the judgment of Smith JA and agree with it.

A. Mendonx00C7a

Justice of Appeal

I too, agree.

P. Moosai

Justice of Appeal

Smith, JA.

INTRODUCTION

1 The respondent, Guardian Asset Management Limited (GAM) loaned a total of 18.6 million dollars to the appellants (Deslauriers) in October 2007. The loans of 18.6 million were secured by (inter alia) two promissory notes. Deslauriers defaulted on their loan payments and GAM sued them on their promissory notes.

In answer to GAM's claim, Deslauriers attempted to set off a counterclaim they pursued against GAM. That counterclaim was for damages for losses they sustained as a result of the negligence and/or misrepresentation and/or non-disclosure of GAM's agents in the course of the loan negotiations.

2 The trial judge, Rahim J, gave judgment for GAM on its claim in the sum of $20,676,295.69 plus interest and dismissed Deslauriers' set off and counterclaim.

3 Deslauriers now appeal that decision.

4 We see no valid reason to overturn the findings of the trial judge and accordingly we dismiss this appeal.

5 It is important to appreciate the case that was argued before the Trial Judge before considering the case that was argued on appeal.

SUMMARY OF THE CASE ARGUED BEFORE THE TRIAL JUDGE AND HIS FINDINGS OF FACT

6 GAM's case was that it provided a bridging loan to Deslauriers in the total sum of $18.6 million. The loan was secured by 2 promissory notes and Deslauriers have defaulted on the payments due on the promissory notes.

7 Deslauriers admitted liability on the promissory notes subject to the set off and the counterclaim they pleaded. Deslauriers did not contest the validity of the promissory notes. They claimed relief against their obligation to repay the bridging loan until they were able to obtain additional financing to complete the construction project for which they had sought the bridging loan from GAM. This construction project was a housing development known as Hevron Heights.

8 Deslauriers also claimed to set off their liability under the promissory notes against their counterclaim made against GAM. This counterclaim alleged that GAM was under a duty of care “to both advise or to disclose to the defendants,…GAM's lending limitations” so that they “should not pursue or treat with…GAM for the additional financing” [See Counterclaim at [34]] for the Hevron Heights construction project. As a result of GAM's negligence, misrepresentation or non-disclosure with respect to its inability or incapacity to finance the Hevron Heights project to its completion, Deslauriers suffered loss estimated at $24 million.

9 GAM in turn denied that Deslauriers' liability to repay the bridging loan was in any way connected to or dependent upon any financing of the Hevron Heights project to completion. They denied that they were under any duty of care to discuss with or to advise Deslauriers on any lending limitation since they only agreed to, and did actually provide a loan of $18.6 to Deslauriers. Of that sum $17,827,418.53 was paid to Republic Bank to clear off Deslauriers' indebtedness to Republic Bank. The balance of $772,581.47 was paid to Deslauriers to enable them to pay off a contractor on the project. No separate issues or arguments were advanced about this smaller loan of $772,581.47, and in this judgment references to refinancing the debt of Deslauriers to Republic Bank will include the repayment of this minor debt due to a contractor.

10 In his written reasons, the trial judge examined:

• - the pleaded case;

• - the documentary evidence; especially so, the contentious E-mail correspondence between the parties;

• -the evidence of the only 2 witnesses, namely, Mr. Leon Ramdeen on behalf of GAM and Leonara Deslauriers (Mrs. Deslauriers) on behalf of Deslauriers; and

• - the arguments advanced.

11 Crucially, the trial judge accepted the evidence of Mr. Ramdeen in support of GAM's case and disbelieved the evidence of Mrs. Deslauriers in support of the Defence and Counterclaim.

12 At various parts of his reasons, the trial judge referred to the evidence of Mr. Ramdeen with respect to the bridging loan arrangements and accepted (inter alia) that:

• i) GAM did not undertake to finance the Hevron Heights project; [See Judgment of Rahim J at [50],[54] and [63]]

• ii) GAM only provided financing for Deslauriers to pay off their existing indebtedness to Republic Bank in respect of the Hevron Heights project. [See Judgment of Rahim J at [36]-[38] and[54]]

• iii) Deslauriers was going to fund the balance of the project otherwise than through GAM. [See Judgment of Rahim J at [37]-[39] and [50]]

• iv) Deslauriers was not relying initially on GAM for future financing of the project. [See Judgment of Rahim J at [52]]

• v.) GAM exercised the requisite duty of care. [See Judgment of Rahim J at [52] and [54]]

13 With respect to the evidence of Mrs. Deslauriers the trial judge observed (inter alia):

• i. Many of the assertions of Deslauriers were inconsistent, contradictory or otherwise not supported by their documentary evidence. [See Judgment of Rahim J at [50]]

• ii. The trial judge disbelieved Mrs. Deslauriers' evidence that Mr. Ramdeen made the pleaded representations off the record. [See Judgment of Rahim J at [63]]

• iii. “..in several of the email correspondence, the language employed by the Second defendant (Mrs. Deslauriers) lacked clarity and certainty.” [See Judgment of Rahim J at [64]]

• iv. Any impression of a representation by GAM in the emails “appeared to be of her (Mrs. Deslauriers') own making to say the least having regard to what appeared to be her unconventional method of expressing herself in the relevant correspondence.” [ibid] v. Since there was no representation as pleaded, there could be no misrepresentation relating to financing of the project. [ibid]

• vi. The court could find no evidence of misleading conduct by Mr. Ramdeen. The fact that GAM's representatives saw no need to discuss a lending limit with Deslauriers may very well be evidence for the court to infer that “it was never represented by (GAM) that it would finance the project.” [See Judgment of Rahim J at [67]]

• vii. The allegation with respect to further financing from GAM after the April 2009 disbursement appeared “to be an afterthought”. [See Judgment of Rahim J at [68]]

• viii. On the evidence there was no negligence, or any type of misrepresentation or failure of consideration as pleaded and submitted by Deslauriers. [See Judgment of Rahim J at [70]]

14 In arriving at his findings and inferences of fact, the trial judge measured his impressions of the witnesses' credibility against the contemporaneous documents (such as the E-mail correspondence) and the witness statements. [See Reid v. Charles PCA 36 of 1987 at page 6]

In such a case “It can of course, only be in the rarest occasions and in circumstances where the appellate court is convinced by the plainest of considerations, that it would be justified in finding that the trial judge had formed a wrong opinion.”[See Beacon Insurance Company Limited v. Maharaj Bookstore Limited [2014] UKPC 21 at [12]]

I say from the outset that this present appeal is not one of those rare cases to disturb the trial judge's findings and inferences of fact.

In any event, the task of Deslauriers is rendered more unsustainable because of the concessions made by their Counsel to the effect that they were not challenging certain important findings of fact. The challenge on appeal was only to a limited part of the findings of fact by the trial judge.

DESLAURIERS' CASE ON APPEAL

15 In oral submissions Counsel for Deslauriers made it clear that he was not challenging the trial judge's finding that there was no promise by GAM that it would finance the Hevron Heights project to its completion. Counsel also conceded that he was not pursuing certain allegations in the Defence and Counterclaim; namely

• i. Paragraph 23- where Deslauriers alleged that the provision of financing for the entire Hevron Heights project was a condition precedent to the repayment of the $18.6 million loan.

• ii. Paragraph 37- where Deslauriers alleged that GAM breached their agreement with them to provide funding for the entire project.

16 These concessions were in keeping with the limited case now being argued on appeal, namely that GAM clearly misrepresented or failed to disclose their capacity to provide further funding for the project.

Deslauriers now only ask for judgment on the counterclaim and a stay on GAM's claim, (not for its dismissal) pending an assessment of the counterclaim.

17 The case now argued on appeal is untenable for the following two reasons:

• A) The concessions in respect of the trial judge's findings makes the counterclaim and any set off unsustainable

• B) The case now raised on appeal does not warrant the reversal of the trial judge's findings.

A) THE CONCESSION IN RESPECT OF THE TRIAL JUDGE'S FINDINGS MAKES THE COUNTERCLAIM AND ANY SET OFF UNSUSTAINABLE

18 In the case as contemplated and advanced before the trial judge, the loss and damage suffered were caused by the failure of GAM to provide funding for...