Court: Attorney acted 'dishonestly' in 2013 land-deal scam

A former registrar of the Industrial Court was found to have “dishonestly” assisted a client in a series of land transactions.

The finding was made by Justice Eleanor Donaldson-Honeywell against the attorney and former registrar Marilyn Sammy-Wallace in relation to the 2013 land transaction.

Sammy-Wallace was sued by Ganess Bhagwandeen who sought damages from her for “knowingly assisting” the seller of the land that led to him paying $525,000 as part of an agreement for four lots of land in Freeport which was not repaid to him when the deal fell through.

Donaldson-Honeywell had to determine if Sammy-Wallace was liable for dishonestly assisting the vendor in a breach of trust.

She found Bhagwandeen had “proven the dishonesty aspect” of his claim against Sammy-Wallace who was ordered to pay the $525,000 “for dishonestly assisting” vendor Stephanie Bonaparte-Primus, the client, in a breach of trust.

The judge also ordered the attorney to pay interest on the sum at a rate of five per cent per annum from November 8, 2013, to Wednesday's date when she delivered her ruling.

Sammy-Wallace was also ordered to pay Bhagwandeen’s costs. He was represented by attorneys Gerald Ramdeen and Dayadai Harripaul while Sammy-Wallace was represented by attorneys Varude Badri-Maharaj and Suzette Bullen.

Bhagwandeen had advanced the payment for the land and Sammy-Wallace was Bonaparte-Primus’s lawyer, hired to prepare the sale agreements.

Bonaparte-Primus failed to honour the terms of the transactions, never conveying the land or paying back the money.

In 2017, Bhagwandeen filed a claim to recover sums paid and this ended with judgment being awarded in his favour, in default, against Bonaparte-Primus, who is now dead.

In evidence before the court, Bhagwandeen presented information concerning the business relationship between the attorney and her client which showed the two entering into their own agreement for the sale of the land for which Bonaparte-Primus did not have a title.

There were four sale agreements in all with Bhagwandeen paying various sums for the land and there being a promise to pay him $1.5 million if the first three deals fell through.

It was his contention that the actions of the vendor amounted to a fraudulent and dishonest scheme to appropriate his funds under the guise of a land sale transaction. He also contended the attorney was aware of these actions and assisted her client in executing the “fraudulent design.”

In defence of the claim against her, Sammy-Wallace contended that the claim raised no cause of action and was an abuse of process. She said the claims should have been made against the vendor, not her.

In her ruling, it was her case that she represented Bonaparte-Primus in the transactions, denying that she failed to advise Bhagwandeen to get independent legal advice. She also maintained she explained to Bhagwandeen the vendor’s lack of proper title for the land and in relation to the “usual terms of the agreements,” she was only following her client’s instructions.

She put her role, not as legal adviser, but as a passive bystander in the transaction. She also denied acting as the vendor’s agent for the transactions.

In her ruling, Donaldson-Honeywell ruled that Sammy-Wallace failed to provide the case should be dismissed or struck out as an abuse of process.

“On the contrary, the defendant’s actions in ventilating such a plea at the eleventh hour amounts to an abuse of process.”

In addressing the relationship between the attorney and the vendor, the judge held that the evidence showed that at the time the vendor was contractually obligated to deliver the lands or pay Bhagwandeen the sum promised, she was also paying Sammy-Wallace.

She said the failure by the attorney to disclose the documents discovered by Bhagwandeen adversely affected her credibility, as “on a balance of probabilities, she intended to conceal from the court any information that would support the claimant’s case.” She also found that Sammy-Wallace failed to disprove Bhagwandeen’s case on the nature of her relationship with Bonaparte-Primus.

“This failure supports the claimant’s case that the relationship was such that the defendant had full knowledge of the vendor’s breach of trust vis-a-vis the claimant and assisted her in that regard.”

On the issue of “breach of trust,” the judge held that “the series of transactions culminating with the fourth agreement, which was a sham, intended to induce the claimant to pay more money for lands he would never receive, amounted to a breach of trust by the vendor.”

She said it would have been clear to Bonaparte-Primus and Sammy-Wallace that the former would have been unable to deliver.

“It is clear from the claimant’s pleadings and evidence that he is contending that the vendor duped him, with the assistance of the defendant, to enter that fourth agreement,” she said, finding that he did establish a breach of trust.

Donaldson-Honeywell also held that Sammy-Wallace’s responses to the contention she assisted the vendor in the commission of the breach of trust were not credible.

“The version of events presented by the claimant was generally more credible because the defendant was shown, by her answers under cross-examination, to have a propensity for providing false information.

“She admitted to doing so when required to assist the vendor with padded financial data that would influence a bank into granting her loan financing.”

The judge said examples of “such padded financial accounting” in statements of fees and charges owed by the vendor to the attorney were included in the documents which Sammy-Wallace failed to disclose to the court.

“...It is reasonable to conclude, based on this admitted falsity, that the defendant would not only dishonestly assist the vendor in duping the claimant but that her version of events presented to the court is less than honest,” the judge said.

She also added that based on the court’s view of the credibility of the parties, Sammy-Wallace had been discredited to the point where Bhagwandeen’s account was “more credible.”

“It is more credible, as contended by the claimant, that the defendant’s reason for agreeing to prepare the absurd fourth agreement thereby giving the claimant, who was “uncomfortable,” peace of mind, was that she was assisting the vendor to eke out the final additional payment” from Bhagwandeen.

“She was aware that the vendor would breach the trust by neither repaying the amounts paid nor conveying the lands. Furthermore, there was no basis for the defendant to believe the payment promised in the fourth agreement could be made.”

On the contention that Sammy-Wallace “acted dishonestly,” the judge said, “The non-disclosure to the claimant by the defendant of her relationship as a purchaser from the vendor and as an agent assisting her in the real estate business lends credit to the claimant’s case that she was fully aware of the dishonest nature of her role in assisting the vendor vis-a-vis the four agreements with the claimant.”

“It is also clear from the evidence on record that, from the first agreement, the defendant knew of unusual aspects of the transactions based on which it was clear that the claimant was being duped to part with his money.

“The fact that the land was being sold at an undervalue, the down-payment terms, and the length of time for completion are included in those unusual factors,” the judge held.

“...She was fully aware that the agreements were intended as a ruse to encourage him to pay money to the vendor, which said monies were utilised in breach of trust.

She also held, “...The terms of the fourth agreement were in themselves proof that the defendant must have known of the dishonesty in the transaction yet ignored it while assisting with drafting agreements and encouraging the claimant to sign.”

“The claimant has proven the dishonesty aspect of his claim against the defendant,” she held.