East Coast businessman Clement Toney who operated a hatchery several years ago is currently challenging Scotia Bank in the High Court for selling his business after he defaulted on a mortgage.
Toney swore in an affidavit that he was servicing the loan when the bank moved against him.
Nearly two years after he filed the lawsuit claiming some $5 million in damages the case has come up for hearing at the Commercial Court before Justice Rishi Persaud. Toney said in the court documents the bank was receiving payment on the mortgage for a period of time, but went behind his back and filed proceedings in the High Court against him. He said the bank won judgment and foreclosure against him and it went and auctioned off his property.
Based on court documents seen by this newspaper the Bank of Nova Scotia moved against Toney in 2005 and was granted judgment by Justice Winston Patterson. The bank had granted him an overdraft facility in the sum of $2 million, which was secured by a mortgage deed executed in respect of his property at Better Hope where he conducted his business.
Toney said the proceeds of the overdraft were used to finance his hatchery business of poultry chicks on a commercial scale at Better Hope. He also lived at the premises with his brother. Toney said his output was approximately in the vicinity of 15,000 broiler baby chicks weekly which he retailed and wholesaled to poultry farmers, and he said that his hatchery was valued around $20 million.
Some time after he received the money from the bank in 1997, the business started to decline. “As a result of the decline in business, I left Guyana for Toronto, Canada, to work so as to continue to service the overdraft facility and to liquidate the arrears,” Toney said. He said the business continued here under his brother’s supervision and he continued to make payments to the service the overdraft from Canada.
Toney deposed that the bank knew he was living in Canada, but he conceded that he was not servicing the overdraft in a satisfactory manner. He recalled visiting the bank in 2005 to discuss the overdraft and according to him, the loan officer failed to mention at the time that the bank had instituted legal proceedings against him. The deponent wrote to the bank subsequently, still unaware that the case was in court, and he said the bank was prepared to accept $250,000 a month. However, he stated that the bank later outlined that it had taken him to court and was moving towards foreclosure.
In March 2006 Toney said he paid the bank $168,000 and he made another transfer from Canada of US$2,000 to the bank in July that year. He said the bank accepted the money and failed to mention at the time that it had obtained judgment against him. He said the bank then sold the property in January 2007 and evicted his brother and a caretaker from the premises. He maintained that he was never served in the matter.
Toney averred that at the time of the sale he had several items of much value on the premises. He listed among the items an overhead tank, incubators, generators, electrical motors, automatic vaccinators, a plucking machine, hatch pans and trolleys and electrical water pumps among other things, which he said totalled in excess of $21 million. He said the property was sold with all the things, which “were not subject to the mortgage” and therefore could not be part of the sale.
Toney is seeking a declaration setting aside the initial judgment by Justice Patterson, an order setting aside the sale of execution, damages, aggravated and exemplary and an injunction restraining the new owners of the property from conveying or transferring the certificate of title among other orders. He filed the suit through his attorneys Anil Nandlall and Euclin Gomes.
The defendants named in the suit are the Bank of Nova Scotia; the Registrar of the Supreme Court; the First Marshall; Zabeeda Majeed and Steve Bacchus. The case is continuing.
