The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s former chief medical officer has lost his bid for a quick legal victory against CIBC Caribbean (Bahamas) over their $1.233m mortgage loan dispute.

Senior Justice Deborah Fraser, in a December 2, 2024, verdict dismissed the attempt by Dr Glen Beneby and his Bentech Ltd company to both obtain a summary judgment against the BISX-listed bank and a temporary injunction that would prevent it from repossessing the Sunrise Beach Estates condo complex at the heart of their battle.

Given that CIBC previously failed in its 2021 attempt to have the former chief medical officer’s action struck out, both sides have now seen their efforts to achieve an early and rapid victory thwarted as senior justice Fraser ruled each has raised “serious issues” that need to be determined by a full trial on the substantive merits.

The dispute has roots that date back three decades to 1994 when Dr Beneby and Bentech Ltd, for which he is the beneficial owner, obtained a $600,000 mortgage loan from Barclays Bank to acquire the Sunrise Beach Estates condo complex. The rental income was assigned to the bank so that it would be able to claim these monies if there was a loan default.

Barclays was merged into what is now CIBC Caribbean (Bahamas) in the early 2000s. Prior to that, the mortgage loan was increased via two additional charges - one worth $204,000, and the other for $498,505 - in 1998 and 2003, respectively.

A 2011 refinancing of this debt followed, where the last $498,505 charge was “consolidated” into an expanded $1.233m loan facility along with a $25,000 renovation loan and $37,000 facility for property insurance. Relations between the two sides soured, though, after CIBC Caribbean (Bahamas) alleged Dr Beneby and his company defaulted on the loan.

It was the former chief medical officer, though, who initiated legal action on July 31, 2028, by claiming the BISX-listed bank had breached the mortgage contract, allegedly “failed to apply payments” to the loan account and also violated the Financial Transactions Reporting Act 2000.

CIBC Caribbean (Bahamas), though, countered by alleging that Dr Beneby and Bentech Ltd “breached the credit facility terms by failing to make agreed monthly payments, resulting in arrears and an outstanding balance”. It also produced a June 8, 2022, letter from Bentech Ltd’s attorney stating their client’s “refusal to pay and refusal to make the agreed payment pending the outcome of the action”.

The bank is claiming that the loan is some $294,185 in arrears, while a further $10,490 in loan charges have accumulated to take the total debt owed to it by Dr Beneby and his company to over $300,000. The default and loan termination notice, giving the borrower some 14 days to remedy the breach, had already been issued.

Dr Beneby, who was represented by attorney Maurice Glinton KC, sought a summary judgment from the Supreme Court on the grounds that he and his company “consistently maintained sufficient funds in the mortgage accounts to cover the stipulated monthly payments of $12,827 via standing orders.

“As of the date of the writ, 143 of 144 required payments had been made, demonstrating compliance and supporting their application for summary judgment,” justice Fraser added of their arguments, noting that they also claimed a report by the Baker Tilly Gomez accounting firm had identified “discrepancies” involving the mortgage transaction.

“Counsel for the claimants further pleaded that, due to the apparent discrepancies identified in the Baker Tilly report regarding the mortgage transactions, the bank cannot enforce personal guarantees or rent assignment on the first claimant [Dr Beneby] for $900,000 and $1.303m without first justifying these discrepancies to the court,” the judge wrote.

“Counsel for the claimants oppose the defendant’s allegation that the claimants’ breached the credit facility terms and that the defendant failed to account for the discrepancies and irregularities in the mortgage transactions as identified in the Baker Tilly report.”

Senior justice Fraser noted that Mr Glinton also accused CIBC Caribbean (Bahamas) of breaching numerous laws, including the Bank and Trust Companies Regulation Act 2000 and the Homeowners Protection Act. And he claimed its counterclaim was “a clog” to Dr Beneby’s ability to claim relief for allegedly violating these laws plus the Money Lending Act and Mortgages Act.

However, Luther McDonald KC, representing the bank, reiterated CIBC Caribbean (Bahamas) position that the former chief medical officer and his firm breached the loan agreement “by failing to make agreed monthly payments, resulting in arrears and an outstanding balance”. As a result, the lender is seeking a judgment for the outstanding debt and that it be granted vacant possession.

Senior Justice Fraser, in her ruling, determined: “The dispute centres around the mortgage loan balance. The mere fact that both parties have conflicting views over the mortgage loan balance and bank charges, which are at the heart of this action, suggests that summary judgment is inappropriate at this stage....

“Based on the submissions of the defendant [CIBC Caribbean Bahamas] there are compelling reasons why the court ought to dismiss the claimants’ application for summary judgment, as the defendant has a real prospect of successfully defending the claimants’ claim.”

She also rejected Dr Beneby’s bid for a temporary injunction on the basis that he failed to provide sufficient evidence showing he would suffer “irreparable harm” if the BISX-listed lender moved to repossess the condo complex.

“The claimants argued that there is a real and imminent risk of irreparable harm should the injunction not be granted, pointing to the defendant’s admission of loan termination and the potential impact of possession or sale before resolving the underlying dispute,” senior justice Fraser said.

“However, the defendant countered that the claimants failed to provide sufficient affidavit evidence to substantiate their claims of imminent harm, asserting that the balance of convenience and justice supports their contractual rights to enforce the loan.

“The court found the claimants’ case for an injunction unsupported by sufficient evidence. While the claimants raised valid concerns about potential harm, their failure to meet the evidential threshold... weakened their position,” she added. “The court also notes the defendant’s financial capacity to compensate the claimants if necessary, thereby mitigating any potential prejudice.....

“In conclusion, I find that there are serious issues to be tried relative to the issues raised in the re-amended statement of claim and the defence and counterclaim that need to be examined at trial and, on that basis, summary judgment should not be granted to the claimants.”