Millions to Messado

An ex-banker who provided over $20 million in loans to eight companies and individuals through agreements crafted by his then attorney Jennifer Messado has been ordered by the Supreme Court to return over $12 million he collected as interest to the estate of the now bankrupt ex-attorney.

The order was made last month by a judge of the Supreme Court who declared the loan agreements illegal and void for breaching Jamaica’s Moneylending Act.

The funds are to be paid over to the trustee overseeing Messado’s bankruptcy proceedings. The embattled ex-attorney was declared bankrupt in May 2021.

The ex-banker, Lauriston Stewart, was granted a 42-day stay before the payment is to be made and has been ordered to return any security being held for the loans facilitated by the disbarred attorney.

The orders were made by Justice Cresencia Brown Beckford on January 17 at the end of a lawsuit filed by Dalma James, the trustee overseeing Messado’s bankruptcy case.

James brought the claim against Stewart, the first defendant, and his daughter, Tanique, second defendant, whose name appears on the promissory notes as a co-lender. She, however, did not participate in the proceedings.

‘VERY UNFORTUNATE’

Stewart described the judgment as “very unfortunate” and said he is now weighing all of his options.

He claimed, during an interview with The Gleaner yesterday, that he was operating a loan business through Messado’s law practice.

“The arrangement was that she would find the clients because she had this massive real estate portfolio in her practice,” Stewart claimed.

“I knew her, she was my lawyer for 30-odd years and I had trust and faith in her as a lawyer and a friend,” he added.

The lawsuit was filed by Messado’s bankruptcy trustee after he was confronted with the eight loan transactions that were intended for the completion of conveyances and related real estate ventures, according to court documents.

The loans range from a low of $1.5 million to Brilliant Investments on May 30, 2017, to a high of $4 million, made separately to the same entity on April 2, 2017, and to Orpheus Stennett and Jennifer Graham on January 28, 2018.

There were also loans of $2.2 million and $1.8 million to Delta Investments Limited; $3 million to Reggae Adventures Limited; $2.5 million to Windsor Commercial Land Company; and $2.5 million to Ingrid Distant.

All the loans listed the interest rate as “10 per cent per month” and were for a period of 180 or 120 days.

The loans were brokered by Messado who was “associated” to two of the companies and acted on behalf of clients, including her daughter.

TEN PER CENT INTEREST RATE ‘EXCESSIVE’

But the trustee overseeing her estate complained in his lawsuit that the ten per cent interest rate was “excessive” and that the transactions were “harsh and/or unconscionable” and contrary to section 7 (1) of the Moneylending Act.

The legislation stipulates that interest rates shall be quoted as per annum where any document issued or published by or on behalf of a lender purports to indicate the terms of interest.

Neco Pagan, the attorney who represented the trustee, said evidence shows that Stewart was in agreement with the ten per cent monthly interest charge.

In addition, Pagon submitted that the promissory notes for the transactions were drafted on instructions of the ex-banker and issued at his directions.

As a result, he argued that where a moneylending transaction contravenes the law, “it will be found to be illegal unless it is proved that the contravention occurred without the consent of the lender”.

But in challenging the lawsuit, Symone Mayhew, KC, the attorney for the ex-banker, asserted that Messado raised no issue with the ten per cent interest rate until she was arrested and charged.

Messado is awaiting trial on a slew of fraud charges related to this and other allegations.

According to Mayhew, Messado prepared all the loan documents for the transactions, “making her fully aware of the interest rate”.

“Mrs Messado often negotiated loan terms on behalf of borrowers, introducing them to Mr Stewart without him meeting them directly,” the attorney submitted, according to court records.

Mayhew argued that Messado is “bound by the contracts she drafted, negotiated and gave professional undertakings to honour”.

Justice Brown Beckford, in her decision, sided with Messado’s trustee, declaring that the monthly interest rates cited in the loan transactions was a contravention of the legislation “and are therefore illegal”.

“The contracts are consequently rendered void. I must point out that the professional undertaking given in respect of each loan is equally unenforceable, being founded upon an illegality,” the judge said.

“In the court’s view, to give efficacy to the spirit and intendment of the law, the moneylender cannot be allowed the benefit of his illegality by recovering the profit from his actions. By this token, he must repay all sums paid to him above the amounts lent.”

livern.barrett@gleanerjm.com