Review of statements underway as hearing of Precision breach of contract suit begins

As Justice Navindra Singh had previously announced, the trial of Precision Woodworking’s over five-year-old lawsuit against Republic Bank (Guyana) Limited for alleged breach of contract commenced yesterday.

At the hearing, the court perused witness statements as it determined what aspects of those documents were going to be admitted in the trial and which were going to be struck out.

Dealt with yesterday was the statement of Ronald Bulkan, one of the respondents in the matter. After the almost two-hour exercise, the judge adjourned the matter until March 28th for continuation. Thereafter, the defence will commence its cross-examination.

Though the court had set several previous dates for the commencement of the trial, this never materialised, owing in part to a number of interlocutory appeals which had been filed by the defence.

At a February 26th hearing, Robin Stoby SC, on behalf of the defendants, had asked that all proceedings be halted, pending Full Court rulings on the appeals, which were scheduled to be delivered on February 19th.

While the judge had granted the request, he asserted that the trial would have commenced yesterday, irrespective of those rulings.

Apart from Precision and Bulkan, Rustum Bulkan is the other listed plaintiff in the action. They are being represented by attorney Nigel Hughes.

Meanwhile, in addition to the bank, listed as a defendant is Kashir Khan in his capacity as receiver for Precision. They are being represented by attorney Timothy Jonas and Senior Counsel Stoby, respectively.

In its statement of claim, Precision has said that owing to difficulties by which it was overcome, it was invited to and attended a meeting convened by the bank on June 30th, 2011.

Prior to the meeting, it said, it had borrowed from the bank and had repaid principal in full of about $513,000,000 and had paid interest in excess of $327,000,000 and was always considered by the institution as an “excellent customer.”

At the meeting, the company said its indebtedness stood at $406,553,074, representing the principal, and $10,613,224, representing interest.

Precision said that before the meeting, which dealt with an agreement of sale with Torginol Paints Incorporated for lots 21 and 32 of the property in transport No. 490/2008 for the sum of $230,000,000, its directors had informed the bank of their efforts to find a purchaser for part of that property, to which the bank had no objections.

Its statement of claim details that it thereafter accepted $30,000,000 from Torginol Paints as a deposit on the sale, which was then handed over to, and encashed by the bank.

According to Precision, it was only after the said cheque was handed over that Khan (the first-named defendant), in his capacity as receiver for Precision, was introduced to its directors by the bank as having been appointed receiver of the company under the existing debentures.

In its statement of claim, Precision advanced as unlawful, among other things, the bank’s appointment of Khan as receiver. It has also argued that Khan failed to act honestly and in good faith in dealing with its property “in a commercially reasonably manner” and added that its assets were unlawfully disposed of.

It says it has suffered loss and damage as a result of the actions of the defendants.

It has also advanced that the bank breached the provisions of the Financial Institutions Act by attributing interest to the company’s outstanding indebtedness, when it was not permitted to do so.

It is also seeking a declaration that the appointment of Khan as receiver for Precision Woodworking Limited was unlawful, null, void and ultra vires to the Companies Act 1991.

It also seeks a declaration that Khan did not act in its best interest, given his role as agent of its company, nor did he exercise reasonable care in his dealings with its assets.

A declaration is also being sought that Khan has not acted and or conducted himself as the appointed receiver of Precision in accordance with the Companies Act 1991.

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