promissory note was sold to Citibank and Musson received the proceeds from the sale
of the note. As a consideration for the sale of the note, Musson agreed to guarantee a
personal loan to the respondent by Citibank.
[43] New promissory notes were subsequently prepared by Citibank and signed by
the respondent on 16 November 2001, 20 February 2002, 19 November 2002 and 19
December 2003. These promissory notes reflected new balances on the debt. They
confirmed receipt of value for the notes by the respondent and the respondent‘s
promise to pay the value of the respective notes.
[44] By letter dated 15 November 2004, he said Musson advised Citibank to have the
respondent settle his debt with the bank. Citibank‘s attempts at so doing proved futile.
Consequently, by way of letter dated 25 February 2005, Citibank demanded payment
from Musson, as guarantor of the respondent‘s debt. On 28 February 2005, Musson
paid the sum of $5,856,889.17 to Citibank.
Mr Walker’s evidence
[45] Mr Walker's evidence was that Musson maintained two accounts for Highgate
and one for the respondent which it maintained from 13 November 2001. Musson has
paid a total sum of $12,955,967.84 under the guarantee agreement to Citibank. Under
cross-examination, Mr Walker said:
(i)
the debit entry of $7,900,000.00 on 13 November
2001 on the respondent‘s account was in respect of a
promissory note, signed by the respondent regarding
inventory and receivables that Musson took over from
Highgate; and
(ii)
the credit entry of 19 November 2001 to Musson‘s
account of $5,700,000.00 concerned the same
promissory note.
He was however unable to say whether the entries reflected a roll-over. He was unable
to speak to transactions prior to 2001 and based all his entries on Citibank‘s statement.
[46] It was his evidence that on or about 13 December 2001, Musson used
$354,063.83 it held for Highgate under the profit sharing agreement to offset the
respondent‘s indebtedness to it. Also, on or about 10 July 2003 and 5 September 2003,
goods valued at $161,333.34 and $444,888.90, respectively, which Highgate supplied to
Musson, were also used to offset the respondent‘s debt to Musson.
Mr Messado’s evidence
[47] Mr Messado, in support of Musson, initially deponed that there was no
document, in Musson's possession, that Highgate was ever indebted to it. The debt was
the respondent‘s personal debt. According to him, that assertion was ―confirmed by the
Promissory Note dated August 18, 1998". In a later affidavit, he resiled from the
statement concerning documents of Highgate's indebtedness to Musson and admitted
that accounts for Highgate, which were numbered 13676 and 13675, were located. It
was however his evidence that the claim was not in respect of those accounts but in
respect of the respondent‘s personal account which was numbered 12005.
The respondent’s evidence
[48] The respondent refuted Musson‘s assertions that he ever received any benefit
from either Citibank or Musson. He contended that he was therefore not liable to either.
He denied having enriched himself by any payment made by Musson. He said he was
not the managing director of Candyman. He was however, the chairman of the board
and the principal shareholder.
[49] The respondent‘s evidence was that Musson became the distributor of Highgate
products from June 1998. In June 1998, it was agreed that Musson would purchase
Highgate‘s inventory, receivables and distribution rights for Highgate and Kraft products
which Highgate, prior to the agreement, distributed.
[50] Pursuant to that agreement, Highgate was to repurchase all unsold inventory
and uncollected receivables, which were not sold or collected by 15 August 1998.
Consequently, Highgate became indebted to Musson in the sum of approximately
$7,000,000.00. It was the respondent‘s evidence that he was informed by Mr Blades
that Highgate‘s inability to pay Musson would result in embarrassing cash flow problems
for Musson.
[51] The respondent said that Mr Blades presented him with a solution to the
problem, some days after, which led him to meet with Mr Peter Moses at Citibank. Mr
Blades, he said, arranged with Mr Moses that Citibank would pay Musson the amount
which Highgate owed Musson. That payment was made in exchange for a promissory
note signed by him (the respondent) and guaranteed by Musson.
[52] His evidence was that he was informed by Mr Blades that only Citibank was
willing to grant him (Mr Blades) a loan but it would only do so if the respondent
provided a promissory note in his (the respondent‘s) name. This was because
Highgate‘s financial problems were well known in the banking community while the
respondent‘s name was still reputable .
[53] His understanding of the arrangement from Mr Blades was that Musson, as the
recipient of the funds and guarantor of the promissory note, accepted responsibility for
its repayment. His signing of the promissory note was merely facilitative. He received
no money from Citibank nor did he have any other contact with either Mr Moses or any
other person at Citibank concerning the matter. Subsequently, Mr Hoo Fatt gave him
promissory notes which he signed with the understanding that the said notes were to
―give effect to the arrangements‖ he had with Mr Blades.
[54] It was also his evidence that on the first annual rollover of the promissory note,
he was informed by Mr Blades that a condition had been imposed by Citibank that the
principal be reduced. He was unsure whether the reduction should have been by
$1,000,000.00 or $2,000,000.00. The sum was paid by Highgate.
[55] The respondent also asserted that the interest on the said note had been paid in
advance by Musson and had been over the years debited in increments against
Highgate‘s account. Neither Musson nor Citibank, demanded payment from him or ever
required him to personally pay under the promissory notes. Before Citibank demanded
payment from him, and at least four years after he signed the first note, he received a
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