Nature Resorts Ltd v First Citizens Bank Ltd (Trinidad and Tobago)

Nature Resorts Ltd v First Citizens Bank Ltd (Trinidad and Tobago)

The Board held that the Court of Appeal was entitled to find that any presumption of undue influence was rebutted, as Mr Dankou was an experienced businessman who understood the transaction and its risks. The Board further held that, even if a presumption of undue influence arose, the transaction was readily explicable and thus no presumption should have arisen. On the financial assistance issue, the Board declined to decide the statutory interpretation and factual questions, finding insufficient material and procedural unfairness to the Bank to resolve the issue for the first time on final appeal.

Parties
Appellant/cross Respondent: Nature Resorts Ltd; Respondent/cross Appellant: First Citizens Bank Ltd
Jurisdiction
England and Wales
Judgment Date
04 April 2022
Procedural Posture
Civil Appeal / Judgment on Final Appeal From Court of Appeal
Outcome
Appeal dismissed (majority); dissent would have allowed the appeal and declared the mortgage unenforceable.
Legal Topics
Undue Influence, Financial Assistance by Company, Mortgage Enforcement, Directors' Duties
Contract Law Company Law Equity Undue Influence Financial Assistance by Company Mortgage Enforcement Directors' Duties

Case Brief

Summary, issues, holding and outcome

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Parties

Nature Resorts Ltd

Appellant/cross Respondent

First Citizens Bank Ltd

Respondent/cross Appellant

Procedural Posture

Civil Appeal / Judgment on Final Appeal From Court of Appeal

Legal Issues

  1. 1 Whether the deed of mortgage was voidable for undue influence exercised over Mr Dankou by Mr Wheeler
  2. 2 Whether the deed of mortgage contravened sections 56-57 of the Trinidad and Tobago Companies Act (prohibition on financial assistance)
  3. 3 Whether the Bank could enforce the mortgage if it was unlawful financial assistance

Ratio Decidendi

The Board held that the Court of Appeal was entitled to find that any presumption of undue influence was rebutted, as Mr Dankou was an experienced businessman who understood the transaction and its risks. The Board further held that, even if a presumption of undue influence arose, the transaction was readily explicable and thus no presumption should have arisen. On the financial assistance issue, the Board declined to decide the statutory interpretation and factual questions, finding insufficient material and procedural unfairness to the Bank to resolve the issue for the first time on final appeal.

Court Disposition

Appeal dismissed (majority); dissent would have allowed the appeal and declared the mortgage unenforceable.

Orders

  • Appeal dismissed; mortgage remains enforceable by the Bank.