Garet O Finlayson and another (Appellants) v Caterpillar Financial Services Corporation (Respondent) (Bahamas)

Hearing listed

Case summary
Appeal
Change log

Case summary

Case ID

JCPC/2023/0115

Jurisdiction

Bahamas

Parties

Appellant(s)

(1) Garet O Finlayson, (2) Mark Finlayson

Respondent(s)

Caterpillar Financial Services Corporation

Issue

Did the courts below err in finding that the respondent had not breached its duty to take reasonable care to sell a secured asset for the best price reasonably obtainable, in order to settle a debt owed by the appellants to the respondent?

Facts

In December 2001, Caterpillar Financial Services Corporation, the respondent, granted a loan to Kurc Limited (“Kurc”). Kurc was beneficially owned by the appellants. The loan was in the amount of $9,680,000 and was secured against a 147 foot yacht known as Maratani X (the “Vessel”). The appellants entered into an agreement to guarantee the loan. Kurc defaulted on the loan. As a result, the appellants became liable for the outstanding amounts and the respondent took possession of the Vessel, which required repairs. The respondent obtained the permission of a court in Florida to effect repairs to the Vessel, and the parties undertook repairs to the value of $1,700,000. The Vessel was sold in December 2016 for the sum of $2,430,000 (the “Sale”). At the time of the Sale, the amount of the loan outstanding was in excess of $4,000,000. As a result, following the Sale, a balance in excess of $2,700,000 remained outstanding on the loan. The respondent issued proceedings against the appellants to recover the balance of the loan. The appellants argued that the respondent had sold the Vessel at an undervalue, and had failed to take reasonable care to obtain the best price possible for the Vessel, and as a result the respondent was not entitled to the sums claimed. At trial, the Supreme Court of The Bahamas found in favour of the respondent. The Court of Appeal of The Bahamas dismissed the appellants’ appeal. The appellants now appeal to the Judicial Committee of the Privy Council.