Supreme Court
Action No. 461 of 1999
24th February, 2000
Shanks, J.

Mr. Philip Zuniga for the Plaintiff
Mr. Kirk Anderson for the Defendant

Defence of misrepresentation in inducing Defendant to sign documents involving Defendant in commission of a crime - Defendant negligently signing documents - Whether defence of non-est-factum available to Defendant.

J U D G M E N T

This is a claim for $110,000.00 based on an agreement signed by the Defendant Ruth Guerra. She was formerly an employee of the Belize Yacht Club. The agreement is dated the 6th of October, 1998. The agreement says,

"I Ruth Guerra hereby acknowledge that I took without permission of Island Marketers Limited and Belize Yacht Club Limited a total sum of $110,000.00. In consideration of the companies forebearing to take legal civil action against me I hereby promise to pay the companies the sum of $100,000.00 on the 14th of October, 1998. The said sum will be paid by wire transfer to one of the companies account No. 5001382 of Belize Bank Limited. In addition I hereby promise the following:

1. to pay any further amounts as may as been found stolen by me after an examination or an audit of the companies account and to pay all accounting or audit fees occasioned by my stealing of the companies money.

2. to pay the companies legal fees of $10,000.00 resulting from my actions as aforementioned on the 14th of October, 1998.

3. to procure from my mother Ruth Rodriguez an adequate security or guarantee to the satisfaction of the companies for the payment of the above sums of money and all other monies found to have been stolen by me.

4. to give detailed information including dates and the names of persons involved of how I removed the money or monies in order to assist the companies to improve its accounting practices.

5. to leave my passport and travel documents with the companies which I agree will not be returned to me until after the payment of monies aforementioned.

6. if after examination or audit the sum found to have been stolen is less than what was paid on the 14th of October, the difference minus any other charges incurred will returned to an indicated family member of Mrs. Ruth Guerra."

The agreement is signed by Ruth Guerra and also signed by a Commissioner of the Supreme Court, Martha Marina Leslie. In connection with the last provision which provides for re-payment of any difference, I asked Mr. Zuniga at the end of the hearing whether there had been any audit report prepared showing the final sum stolen. He produced after the hearing a copy of such a report by Pannell Kerr Forster, which was addressed to Eddie Halliday Jr. who was the General Manager of the Plaintiff Companies, dated 13th October, 1998 which calculated the loss of the companies as coming to a total of $71,028.00. In these circumstances I would not intend to give judgment to the plaintiffs in any event for more than $81,028.00, including the $10,000.00 for legal fees. I was also alarmed to note that the plaintiffs had sought summary judgment for $110,000.00 earlier this year without drawing attention to the audit report based on an affidavit sworn by Mr. Halliday to whom the report had been addressed. I will return to this matter later in the judgment.

Mrs. Guerra 's main defence is that Mr. Halliday misled her as to the nature of the document she was signing and that she relied on him in signing it. It was accepted by Mr. Zuniga for the Plaintiffs in argument that as a matter of law, if a misrepresentation was made and relied on, it would be no answer for his clients to prove that Ms. Guerra was negligent in signing the agreement without reading it.

I turn to the evidence. It is common ground that at the time she signed the document Ms. Guerra was in police custody charged with theft from her employers and that she signed it at the San Pedro Airstrip where she was being transported to Belize City. Her evidence was that Mr. Halliday had brought a bulky bundle of documents to the police station earlier in the day and told her that they were witness statements or "disclosures" which she must sign because it was police procedure. This she had done without reading them there being insufficient time to get through them before she had to leave for the clinic. Sergeant Alvarez of the Police had apparently also said that she should read and sign them. Then while she was at the airstrip waiting with a woman police officer to fly to the mainland, Mr. Halliday came alone with a further bundle of loose documents and told her there were more witness statements to be signed. She believed him when he said this and she signed the documents, again without reading them, and handed them back to him. She would not have signed the documents if she had known what they were. In fact, they were three copies of the agreement which I have read out.

Mr. Halliday told me that Ms. Guerra had confessed to him to the theft of the money from plaintiff companies and that she had written an explanation as to how and why she had taken the money. She had signed another agreement for a lower amount the day before but then the accountants had discovered that the amount taken was greater than initially thought and he decided to produce a new agreement on the computer for a greater amount. He explained to Ms. Guerra that he was going to do this and he took three copies of the new agreement to the airstrip for her to sign. He briefly went over the important points in the agreement with her, that is the amount and time of re-payment, and she read it before she signed it. He told me that Mrs. Leslie, a Commissioner of the Supreme Court was with him to witness the document and that she asked Ms. Guerra if she was sure what she was doing and he also told me that Mrs. Leslie signed and stamped the documents in Ms. Guerra's presence after she, Ms. Guerra, had signed them.

Mrs. Leslie also stated that she was present when the documents were signed. She said she asked Ms. Guerra if she knew what she was doing and if she was willing to sign and she said yes. After Ms. Guerra had signed the document she, Mrs. Leslie, signed and stamped them. She did not remember Mr. Halliday saying anything. Ms. Guerra, for her part, had denied that Mrs. Leslie was at the airstrip at all.

The last witness to be called was Woman Police Constable Cassimiro and her evidence threw a somewhat different complexion on the plaintiffs' evidence. She said that she saw Ms. Guerra at San Pedro Police Station in the morning of the 6th of October, 1998 with Mr. Halliday Jr. and that she was signing a large bundle of papers containing at least 50 sheets. These papers were put in an envelope by Sergeant Alvarez and taken by Woman Police Constable Cassimiro to Belize City and delivered to the Magistrate's Court. She did not know what the documents were. She then described escorting Ms. Guerra to the Airstrip. She said they arrived 20 to 25 minutes before the plane left. Mr. Halliday arrived alone 10 - 13 minutes later. Woman Police Constable Cassimiro was quite sure that Mrs. Leslie was not there. He gave Ms. Guerra some papers to sign consisting of seven or eight pages. Woman Police Constable Cassimiro did not overhear their conversation. Ms. Guerra had the papers in her hand for three to five minutes. She signed them and handed them back to Mr. Halliday.

Clearly the versions of events given by Ms. Guerra and Mr. Halliday are quite irreconcilable and I have the unenviable task of deciding where the truth lies. My starting point in this task is that I accept the evidence of Woman Police Constable Cassimiro in its entirety. She seemed to me an entirely honest and careful person who remembered what had happened and I can think of no reason why she should wish to mislead the court. It follows that I find that Mrs. Leslie was not present at the airstrip when Ms. Guerra signed the agreement and that she did sign a large bundle of papers earlier in the day.

This means that I can wholly discount Mrs. Leslie's evidence that she was there and that she asked the defendant if she knew what she was doing and was willing to sign the agreement and that she saw Ms Guerra reading it. I have no problem doing this since Mrs. Leslie admitted to having a major memory problem and she was extremely uncomfortable in cross-examination and was forced to admit that she, a Commissioner of the Supreme Court, regularly signs affidavits as such without even seeing the deponent. The last matter may result from a lack of training but certainly does not indicate a conscientious approach to her job as a Commissioner.

However, it also severely undermines the evidence of Mr. Halliday who was adamant that Mrs. Leslie was present at the Airport and that he never presented the defendant with a large bundle of documents to sign. Until the Woman Police Officer gave evidence, I had been inclined to regard Mr. Halliday's evidence as independent and entirely truthful and reliable but the woman police constable's evidence combined with the later realization that his affidavit in support of the summary judgment application was certainly not full and frank have caused me to have real doubts about the rest of his evidence. I am also troubled by the fact that he inserted the figure of $100,000.00 in the agreement when the investigations of the auditors only a week later revealed that only about $70,000.00 had been taken.

On the other hand, Ms. Guerra's evidence also needs to be approached with real caution. She admitted to the theft of a large amount of money from her employees and has never denied it. There may well have been extenuating circumstances but this is still an act of serious dishonesty. Perhaps more importantly in the context of the present dispute, her position as to what exactly she was told by Mr. Halliday has changed as the case has progressed as Mr. Zuniga demonstrated in cross-examination. In he affidavit of the 17th of January, 2000 she said the documents she signed were part of bundle she was asked to sign to enable her to avoid having to face criminal charges at the instance of the plaintiff. On the 20th of January, she swore an affidavit that she was given a thick bundle of documents at the airstrip and told that they were witness statements and that if she signed them the plaintiff would drop charges and settle the matter out of court. On the 24th of January she stated that he told her they were witness statements of witnesses who were expected to testify against her at the anticipated trial and that she needed to sign them to indicate that she knew what the witnesses were saying. In her evidence before me she said that there was a bundle of documents at the airport and that she signed them because she was told that they were witness statements and she had earlier been told by Mr. Halliday and Sergeant Alvarez that she must sign "because it was police procedure". So her evidence has been through a number of changes of emphasis and the only evidence I feel entirely confident in relying on, that of Woman Police Constable Cassimiro, was no help to Ms. Guerra about what was said at the Airport, was inconsistent with her evidence as to the number of pages she was presented with at the Airport and was clear that she had the documents in her hand for three to five minutes.

Bearing in mind that the onus is on her to establish the fraudulent mis-representation case, I am afraid that on the basis of all this evidence I must reject her defence notwithstanding the extremely valiant advocacy of Mr. Anderson. In the end I just cannot accept that, in spite of the unsatisfactory elements in his evidence, Mr. Halliday would have resorted to telling Ms. Guerra that she was signing a document which she was not signing. First, I do not see why he would have thought he needed to do this. She was in an extremely vulnerable position and it seems very likely that she was inclined to agree to anything to improve it. Second, I do not see how he could have thought that he could get away with saying it was a witness statement. Ms. Guerra is a perfectly intelligent person and a moment's look at the document would show that it was not a witness statement and that it involved her in a sizeable commitment to the plaintiffs. The fact is, as Woman Police Constable Cassimiro said, she had the documents in her hand for between three and five minutes. I find that whatever she was told she must have looked at it in sufficient detail to appreciate that it was not a witness statement and her case of mis-representation would therefore fail on the basis of lack of reliance too. On those grounds I reject the defence of mis-representation. I should say that although she obviously had every reason deliberately to mis-lead me I do not think that Ms. Guerra was doing so. She may well be and have been somewhat confused but confusion does not found a defence of fraudulent mis-representation. As to Mt. Halliday, I do not need to decide whether he did, as he told me, draw her attention to the important points in the document and actually see her reading it. On balance, I am inclined to accept his evidence in spite of the fact that he was wrong on a number of points most particularly the presence of Mrs. Leslie at the airport. I can only think that having obtained Mrs. Leslie's signature to the document he regarded the question of whether she was present or not as somehow crucial to the plaintiff's case and allowed his evidence to be altered accordingly on this part of the case. In fact, of course, there was no need for the signature of Ms. Guerra to be witnessed by any one at all.

It follows that I also reject the defence of Non-est-factum. In any event it seems to me inevitable that this defence would have failed since Ms. Guerra must on her own account have been negligent in signing the document as she did.

I will therefore give judgment for the plaintiff for the sum of $81,028.00 unless Mr. Zuniga can persuade me that I ought to give judgment for $110,000.00. I am also inclined to mark the court's disapproval for the way the summary judgment application totally failed to mention the Pannell Kerr Forster Report in some way in my awards of interest and/or costs but I will hear submissions from Counsel on this.

[After discussion: Plaintiff's costs to be taxed if not agreed and interest at 6% from 14 October 1998]

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