Factories Corporation owes Brady, lawyer claims

The battle between the Factories Corporation of Jamaica (FCJ) and Harold Brady has now turned on whether the state entity is legally empowered to enforce an order for the disbarred attorney to pay over $110 million owed from a property transaction.

A quest for forensic audit of Brady’s legal work for the FCJ is also a feature of the latest round of legal wranglings. The FCJ is a government company charged with providing industrial, commercial and office spaces.

Brady, once an influential figure in the ruling Jamaica Labour Party (JLP), has applied to the Court of Appeal for permission to appeal a Supreme Court decision surrounding an interpretation of the Legal Profession Act (LPA).

This month, Justice Carolyn Tie Powell ruled against a claim from Brady that under Section 15 (6) of the LPA, the FSC was not empowered to enforce an order made by the disciplinary committee of the General Legal Council (GLC). The council regulates the legal profession.

According to Section 15 (6), which was inserted in 2007, “an order of the committee shall be enforceable at the instance and on the application of the secretary of the council”.

Section 15 (3) which deals with how GLC orders are to be treated is also a major plank in the case. That provision says orders are to be treated like those made by the Supreme Court.

Brady’s attorneys argued that before the amendment, the LPA only stipulated that orders were enforceable similar to that of the Supreme Court where a person in whose favour an order was granted could apply for it to be implemented.

The insertion of the role of the secretary clarified who had the power to seek to enforce an order of the GLC, they claimed.

The FCJ opposed the view, however, arguing that the power to enforce similar to how it is done in the Supreme Court always existed “without limitation as to who could enforce same”, said the judge in summarising the state entity’s position.

According to the FCJ, it was always open to a complainant to enforce an order for restitution and that it would lead to an “absurdity” if the GLC was tasked with collecting money on behalf of complainants who are successful in their claims against lawyers.

The agency’s lawyer says Section 15 (6) related to orders in which the GLC had an interest in enforcing such an order to strike off an attorney from the list of lawyers allowed to practise in Jamaica.

The GLC, represented by chairman and King’s Counsel Denise Kitson, support the FCJ’s arguments. She agreed with the FCJ that the exclusion of the word “only” from Section 15 (6) made it clear that the secretary to the council is not the only party to enforce a judgment.

A ‘NOVEL’ ARGUMENT

Justice Tie Powell said Brady’s argument was “certainly a novel one” since it did not appear that the issue was tested since the amendment in 2007.

But she ultimately ruled against Brady. She confirmed that GLC orders are enforceable similar to those of the Supreme Court and that, generally, the enforcement is done by the party in whose favour the ruling was made.

“I am satisfied that the claimant (FCJ) is generally the proper party to see to enforce an order of the committee for restitution in its favour by virtue of Section 15 (3). Section 15 (6) must be viewed in the context of Section 15 (3) which declares the general approach by which an order is to be enforced,” Tie Powell argued in her judgment of April 20, 2023.

However, in his application for permission to appeal that ruling, Brady is contending that Tie Powell “erroneously” concluded that the FCJ has standing to enforce despite, among other things, the “clear and ambiguous provisions of Section 15 (6) and a legal framework that includes who should act under the LPA and other laws such as the Arbitration Act that explicitly state who is able to enforce awards.

Tie Powell’s ruling was on a preliminary point raised in FCJ’s application for Brady to be committed to prison for failing to comply with orders made on December 5, 2018.

Brady was ordered to pay FCJ the outstanding $111 million plus interest or $1 million per month starting January 4, 2019 from the Gallimore transaction. The orders also included a notice for Brady to be sent to prison if he did not comply.

The next hearing in the prison application is slated for July 20 when a judge is expected to rule whether Brady should be imprisoned.

PUSHING FOR FORENSIC AUDIT

The debt stems from the botched sale of an FCJ-owned property on Marcus Garvey Drive in St Andrew for $140 million to late JLP government minister Neville Gallimore, between 2007 and 2014. Brady, who did legal work for the FCJ during the period, handled the sale.

The FCJ filed a complaint with the GLC against Brady in 2015.

According to the FCJ, Brady collected the full purchase price for the property but only accounted for $70 million, despite “numerous requests” to hand over the funds.

Further, the FCJ complained that Brady’s failure to hand over the file relating to the transaction “with due expedition” and to register the sale agreement within 30 days caused the company to incur interest and penalties that pushed the debt to $111 million.

After a hearing, the GLC in February 2017 found Brady guilty of professional misconduct and weeks later ordered that his name be struck from the list of attorneys authorised to practise in Jamaica and that he should pay FCJ $111 million with interest.

Brady has appealed the GLC’s decision to the Court of Appeal.

He has also been pushing for a forensic audit of his legal work to be done, insisting that there are sums owed to him by the FCJ.

He is seeking permission to appeal an adverse decision made in November 2022 in relation to that aspect.

‘UNCHALLENGED EVIDENCE’

Last November, a Supreme Court judge denied a request for an order to have a joint Brady-FCJ forensic audit conducted to determine what may be owed to Brady. That ruling relied heavily on the Court of Appeal’s decision not to admit an audit report done for Brady in his appeal against the GLC’s decision.

The report was done by the firm Crowe Horwath. It said in relation to the Gallimore transaction, more than $102 million was paid to the FCJ with $32 million plus interest outstanding.

However, it contended that when fees from an unrelated transaction are deducted, the FCJ owes Brady approximately $5 million. Brady has said he held on to the additional funds from the Gallimore transaction to set off what was owed to him.

The Court of Appeal did not accept the argument in a 2021 ruling, which said, among other things, that much of the information relied on in the audit was available to Brady from as early as 2010 and could have been provided at the GLC hearing.

The court also said Brady did not request any fees from FCJ until after he was sanctioned and further that the audit would not have made a difference since Brady admitted owing the money and even requested banking information to make a transfer.

The FCJ opposed Brady’s application for the joint forensic audit, saying it would be an “injustice” if he was allowed to pursue the matter and further that it was “another tactic …to delay the committal proceedings against him…”.

In one of the exhibits in that matter, the FCJ indicated to Brady in February 2019 that it was awaiting an opinion from the solicitor general on bills he submitted for payment.

Brady’s lawyers are arguing that the judge made “wholly irrelevant considerations” in arriving at her decision and that her reasons “reveal a complete failure on her part to take into account the unchallenged evidence” that the FCJ “was indebted” to Brady.

Brady’s lead attorney is Jerome Spencer, while the firm Myers, Fletcher & Gordon has been arguing for the FCJ.

jovan.johnson@gleanerjm.com