19 years later, appeals court rules lawsuit against Chen-Young to be retried

The Court of Appeal, agreeing there was the real possibility of bias, has ordered a retrial in a lawsuit first brought against former Eagle financial network executive Dr Paul Chen-Young more than 19 years ago to recover millions of dollars in liabilities to the institutions.

The appeal related to a May 2006 judgment by Supreme Court Justice Roy Anderson, mostly in favour of Eagle Merchant Bank and Crown Eagle Life Insurance Company - entities that were taken over by the state in the financial rescue programme of the 1990s - and against Dr Chen-Young and other respondents who were sued in November 1998.

Justice Seymour Panton, who wrote the decision for the three-member Court of Appeal panel handed down on December 1, agreed with Chen-Young's lawyer that the case should not have been heard by Justice Anderson, on the basis that he had a personal relationship with lawyers on the other side of the case.

The suit was filed by Eagle Merchant Bank and Crown Eagle against Dr Chen-Young; Ajax Investments Limited, an industrial and provident society of which he was a member of the committee of management, and Domville Limited which was allegedly beneficially owned by Ajax to the tune of 51 per cent.

Court documents indicate that state-owned Financial Sector Adjustment Company would have to assume liabilities of more than $13 billion when the formal agreement was signed in September 1997 to acquire the Eagle financial network for a price of $1.

Eagle's claim against Dr Chen-Young and Ajax was for J$65.82 million, the amount allegedly spent by Eagle for renovating premises at Grenada Crescent in New Kingston.

Eagle also claimed US$10.95 million against Chen-Young relating to a transaction with a Florida-based securities broker called First Equity.

Crown Eagle's claim against Chen-Young and Domville was for J$7.04 million plus interest at 27 per cent per annum or J$2,315.94 per day from October 1, 1998 to the date of payment or judgment.

According to the Court of Appeal decision, attorney Abraham Dabdoub, who represented Chen-Young, referred to the fact that Justice Anderson was once employed at the same law firm as the lead counsel for Eagle Merchant and Crown Eagle, Michael Hylton QC, and some of the other attorneys who have been associated with him in the conduct of the trial.

"The facts are that the judge was a consultant in the commercial section, and there is no dispute that there is a personal relationship between them," he told the court.

The court was also advised that the case against Chen-Young had its genesis at the said law firm where Anderson and Hylton once worked. When Hylton became solicitor-general of Jamaica, the case followed him to his new post.

Justice Panton also noted that Hylton had approached the Registrar of the Supreme Court to have Justice Anderson assigned to the case, due to his experience in matters of that nature. That consultation included attorney Conrad George who was then representing Chen-Young.

Judge was surprised

According to the judgment, "it appears that the learned judge was surprised that the case was put before him for trial and, in Chambers, he inquired whether they were comfortable with him being the trial judge. All agreed," said Panton in his ruling.

But: "Not all counsel were present at this Chambers hearing and there is no official record of the discussions," he noted.

Chen-Young was not privy to the consultation at the start. However, he was subsequently advised and apparently reluctantly agreed with the decision that was taken, court records show. However, he later told the court that he did not believe it was fair to him.

"It needs to be said that this is not to be regarded as a reflection on the integrity of the judge or of counsel," Panton wrote. "The question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased."

"In the Jamaica that I know, the fair-minded and informed observer may well frown on the circumstances: the case having started at the firm where the relevant parties were employed; counsel resigning and going to another position; the case migrating with counsel; the colleague becoming a judge and ending up trying the very case after counsel having consulted with the Registrar; and other counsel from the same law firm also being involved in the trial," he said.

While Justice Panton accepted that there was no discussion between the lawyers and Justice Anderson about the case during the period at the law firm, he concluded that the fair-minded observer would still feel that there is a real possibility of bias.

"In the circumstances, notwithstanding that I have gone through the details of the learned judge's rulings, and have agreed with most of his findings, I feel constrained to allow the appeal on this latter basis," he said.

He said that while Chen-Young and the other appellants did not seek a retrial, and instead asked for Justice Anderson's orders to be set aside, the Court of Appeal Rules gives it the power, in the case of a civil matter, to order a new trial before a different judge.

mcpherse.thompson@gleanerjm.com