Clarke subsequently issued several other promissory notes for varying amounts in
Musson‘s favour. Each note was intended to replace its predecessor. In every note, Mr
Clarke based his obligation on the fact that he has received value. Musson endorsed
each of those notes in turn in favour of Citibank. Each note stipulated that Citibank
would have ―full recourse‖ to Musson.
[11]
It is apparent from the documentary evidence that when the various notes
matured, it was Musson that satisfied the note. It was to Musson to which the proceeds
of its replacement was issued. Two letters from Musson demonstrate this. In a letter
dated 17 November 2000, Musson sent the then newly executed and endorsed
promissory note to Citibank and requested Citibank to ―make the cheque for the net
proceeds payable to [Musson] and deliver same to bearer‖ (page 3 of the record of
appeal – volume 3). In another case, a letter from Musson, dated 12 November 2001
(page 13 of the record of appeal – volume 3), stated that the note dated 17 November
2000 matured on the day of the letter. In that letter, Musson asked Citibank to:
(a)
debit Musson‘s account with the principal sum;
(b)
prepare a replacement note on the same terms, but
for a lower figure, namely, $6,437,524.21; and
(c)
credit Musson‘s account with the net proceeds of the
replacement note as soon as the new note had been
executed.
[12]
The replacement note, which was issued pursuant to those instructions, was
dated 16 November 2001. It had a face value of $6,437,524.21 and a maturity date of
16 February 2002. As was the case of the other notes, it was drawn by Mr Clarke in
favour of Musson and was endorsed by Musson over to Citibank with ―full recourse‖ to
Musson.
[13]
When that note matured, a change occurred. The next note, which was issued
by Mr Clarke on 20 February 2002, although in the sum of $6,437,524.21 (the same
value as the last-issued note), was issued in favour, not of Musson, as was the case for
the previous note, but in favour of Citibank. No explanation was given to the court
below for the change in the beneficiary of the note. As it had done in the case of all the
previous notes, however, Musson endorsed the note over to Citibank with the terms
―PAY: CITIBANK, N.A. (JAMAICA BRANCH) WITH FULL RECOURSE TO US‖.
[14]
Mr Clarke issued two promissory notes thereafter. Each one superseded its
predecessor. Both were drawn in favour of Citibank and were endorsed by Musson as it
had done in the case of all the previous notes. On 18 November 2002, which was one
day prior to the issue of one of the series of notes, Musson executed an instrument of
guarantee and indemnity in favour of Citibank. In the document, Musson identified the
principal debtor as Mr Clarke and guaranteed to pay Citibank on demand any liability
owed by him. The consideration for the guarantee was the granting of a loan facility to
Mr Clarke. There was, however, no other transaction involving Mr Clarke and he
testified that he did not know of the issue of the guarantee and did not request it to be
given.
[15]
None of the proceeds of the note that was issued the next day was paid to Mr
Clarke. It is not contested that in each case it was Musson that received the full
proceeds of each note.
[16]
On 15 November 2004, Musson wrote to Citibank informing it that it would not
renew or extend its guarantee on the promissory note that was in force at that time
and was scheduled to mature on 17 December 2004. It instructed Citibank to seek to
recover the debt from Mr Clarke. Citibank sought to do so but Mr Clarke did not pay the
sum due. Citibank then called upon Musson to pay the debt in accordance with its
guarantee. Musson did so. The sum paid was $5,856,889.17.
[17]
Musson then demanded payment from Mr Clarke of the sum which represented
the original principal and interest that it had paid thereon over the years. Mr Clarke did
not pay.
[18]
On 29 November 2005, Highgate and Musson arrived at an arrangement
whereby the debt owed to Musson by Highgate, then said to be $28,000,000.00, would
be repaid, with interest on a large portion thereof, on or before 28 November 2011. The
additional time was given in consideration of Highgate Holdings Limited (a separate
company from Highgate) conditionally assigning its trademarks to Musson. There were
other important aspects to the agreement but the relevant provision for these purposes
was that if Highgate failed to pay the debt on the due date, the assignment would
become unconditional and Highgate‘s debt would have been deemed discharged.
The claim
[19]
In the claim giving rise to this appeal, Musson asserted that it guaranteed a loan
to Mr Clarke by Citibank in the sum of $7,937,524.21 and that it had paid the loan, with
interest, on the demand of Citibank. Musson contended that Mr Clarke had been
unjustly enriched by its payment of the loan and his refusal to compensate it for that
payment.
[20]
The sum claimed was $12,136,200.07, or in the alternative the sum of
$12,935,152.80. The smaller figure resulted from Musson having credited Mr Clarke‘s
account with monies that Musson had owed to Highgate and to Mr Clarke. If, however,
Musson asserted, Mr Clarke denied having authorised those credits, then the larger sum
was due from him to it.
The major issues
[21]
The major issue between the parties is a question of fact. Musson claimed that
the debt owed by Mr Clarke to Musson was a personal debt, which was separate and
apart from the debt due to it by Highgate/Candyman.
[22]
Mr Clarke denied that contention. He asserted that he never had any personal
liability to Musson. His case was that the execution of the first, and all subsequent
promissory notes, was at the request of Mr Blades, who wanted to improve Musson‘s
cash-flow, which had been negatively affected by the Highgate/Candyman debt. Mr
Clarke asserted that he took no loan and received no money from Citibank.
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