Derek Achong

Se­nior Re­porter

derek.achong@guardian.co.tt

A hold­ing com­pa­ny has lost its bid to have a law­suit over a $3.4 mil­lion loan it al­leged­ly guar­an­teed for its St Lu­cia-based sub­sidiary dis­missed at a pre­lim­i­nary stage. 

In a de­ci­sion de­liv­ered yes­ter­day, High Court Judge Frank Seep­er­sad dis­missed the ap­pli­ca­tion brought by Siu Chong In­vest­ments Ltd af­ter it was sued by RBC Roy­al Bank (T&T) Ltd. 

The law­suit re­lates to an EC$1,378,608.79 pay­ment the bank made to an­oth­er bank last year as part of a sep­a­rate guar­an­tee to its par­ent com­pa­ny Roy­al Bank of Cana­da (RBC), in re­spect to mon­ey bor­rowed by the com­pa­ny’s sub­sidiary, Ex­cel­lent Stores (St Lu­cia) Ltd from RBC. 

The bank sued the com­pa­ny as it claimed that it was the guar­an­tor of the debts of the St Lu­cia com­pa­ny. 

In its de­fence, the com­pa­ny claimed that its guar­an­tee was giv­en in a lim­it­ed con­text and with a lim­it­ed in­tent and that it nev­er agreed to cov­er mon­ey paid by the bank as guar­an­tor of the St Lu­cia com­pa­ny’s debts in that coun­try.

It con­tend­ed that it nev­er agreed to the pro­vi­sion of the guar­an­tee by the bank to se­cure the loan in St Lu­cia. 

It al­so claimed that the sums se­cured by mort­gage were re­paid and thus ex­tin­guished the guar­an­tee. 

The com­pa­ny ap­plied for a de­fault judg­ment against the bank as it claimed that it had failed to pro­vide suf­fi­cient ev­i­dence to war­rant the case go­ing to tri­al. 

Jus­tice Seep­er­sad ruled that he could not de­ter­mine the case based on the pre­lim­i­nary in­for­ma­tion be­fore him. 

“The is­sues in this case raise ques­tions of fact which can­not be de­ter­mined on the plead­ings as they cur­rent­ly stand, but fall for de­ter­mi­na­tion at tri­al where the ev­i­dence of wit­ness­es has been test­ed, and the court can be­come privy to the na­ture of the full com­mer­cial re­la­tion­ship and dis­cus­sions which de­fined the par­ties’ re­la­tion­ship,” Jus­tice Seep­er­sad said. 

“This is im­por­tant as on­go­ing re­la­tion­ships do, at times, play an in­te­gral role in the for­ma­tion of con­tracts be­tween the par­ties,” he added. 

The com­pa­ny was or­dered to pay the bank’s le­gal costs for the pre­lim­i­nary ap­pli­ca­tion.

The out­come means that the case will now pro­ceed to tri­al be­fore Jus­tice Seep­er­sad. 

The bank was rep­re­sent­ed by Justin Phelps, Sashi In­dars­ingh and Chelsea Stew­art. The com­pa­ny was rep­re­sent­ed by Shiv Shar­ma.