derek.achong@guardian.co.tt
A lawyer has lost his bid to discharge an injunction freezing his bank account, which was obtained by a company that is seeking to recover $7 million in funds paid to a contractor for a construction project that allegedly did not materialise.
Delivering a written decision on Tuesday, High Court Judge Frank Seepersad dismissed the application brought by attorney Varun Debideen.
In the court filings, obtained by Guardian Media, lawyers for Advance Hose and Marketing Limited claimed that on July 19, 2023, their client transferred the money to contractor Cordell Philbert, of Royal Palm Gardens, Malabar, Arima, as payment for a prospective construction project it (the company) was pursuing.
The company claimed that Philbert did not perform his contractual obligations and it sought to recover the funds it had advanced.
Late last month, the company’s lawyers obtained a Norwich Pharmacal order from another High Court Judge in relation to the RBC Royal Bank (T&T) Limited account held by Philbert that the company transferred the funds to.
Such orders seek to compel third parties such as financial institutions to reveal confidential information of their clients, which can be then used to pursue litigation over alleged wrongdoing.
That company claimed Philbert’s financial records showed that after receiving the funds, $6 million was transferred to Debideen’s account held with Scotiabank.
She further claimed that $624,650 was transferred to ZA Limity Engineering Consultancy, a company owned by Joash Ramjattan.
The court proceedings also initially listed Ramjattan, his company, Mitoonlal Persad and his son Brad as defendants as the company alleged that Ramjattan and the Persads were business associates of Philbert and acted as his agents.
However, the litigation was discontinued against the Persads last week.
On November 1, Justice Seepersad issued the freezing order against Debideen’s account and associated orders compelling the disclosure of his bank records.
As he sought to have the interim relief lifted, Debideen denied any wrongdoing.
He admitted that he represented Ramjattan and pointed to a loan agreement for the money which he prepared for Philbert and his client.
He claimed that the money paid by Philbert to Ramjattan under the agreement was used to pay a portion of a substantial judgment debt Ramjattan owed to a third party and his associated legal fees.
In determining the application, Justice Seepersad raised concerns over preliminary evidence given by Philbert, Ramjattan and Debideen over the transactions.
“There are fundamental conflicts with respect to significant and material factual issues which cannot be resolved at this stage,” he said.
Justice Seepersad noted that financial transaction records, unearthed by the company through pursuing the case, showed that Philbert initially sought to make the payment directly to the third party linked to Ramjattan before cancelling the transfer and making the payment to Debideen.
He noted that Philbert’s bank records showed that both payments were recorded as related to payment for a construction contract and not a loan.
He stated that Debideen did not provide evidence on how his legal fees were calculated and record of payment to the third party.
Justice Seepersad also took issue with the purported loan agreement, which was due to last 30 years and had no interest included.
“This loan agreement at this stage causes the Court a significant degree of disquiet as it seemingly defies common sense and on its face is devoid of commercial logic,” Justice Seepersad said.
While noting that the case is at a preliminary stage, Justice Seepersad stated that the company had an arguable case against Debideen based on the material before him.
“At the trial, the Court would have to evaluate the evidence and determine whether the third defendant (Debideen) may have turned a blind eye to these issues and/or whether he facilitated and/or dishonestly engaged in a fraudulent scheme and/or whether he knew that the funds were not at the free disposal of the first defendant (Philbert) and/or whether the ‘blind eye knowledge’ principle can be applied,” he said.
Dealing with the risk of dissipation, Justice Seepersad noted that after the $6 million was deposited in Debideen’s account, $3.4 million was paid to the third party owned by Ramjattan.
He noted that while Debideen’s account was classified as a “client account”, some of the remaining funds in it were utilised for personal expenses leaving a balance of $1,935,519.81 at the time he issued the freezing order.
“The evidence presented at this stage suggests that the funds in this account have been utilised for personal expenses/transactions such as foodDROP, Starbucks and a series of payments were made to his personal credit card accounts,” he said.
Justice Seepersad also pointed out that his interim orders did not stop Debideen from utilising his personal funds for living expenses.
“The court carefully considered the course which is likely to cause the least irremediable prejudice and holds the view that the freezing order does not prevent Debideen from attending to his living expenses,” he said.
Based on Justice Seepersad’s decision, the freezing order is set to remain in place until the substantive case is determined or unless overturned on appeal.
The company was represented by Jagdeo Singh, Leon Kalicharan, and Karina Singh. Philbert was represented by Kerra Bazzey, while Andrew Ramsubeik represented Ramjattan and his company.
Debideen was represented by Tom Richards, KC, Kent Samlal, Umesh Maharaj, and Narisa Bala.
