DR Paul Chen-Young, the former chairman and CEO of the Eagle Financial Group, yesterday lost his bid to free his assets which have been frozen since 1998 pending the outcome of the Government’s $400-million lawsuit against him and two of his companies, Ajax Investment Limited and Domville Limited.

Immediately after the local Appeal Court handed down its decision, Conrad George, one of Chen-Young’s lawyers, said that they would take the case to the Judicial Committee of the United Kingdom Privy Council, Jamaica’s highest appeal court.

Chen-Young had wanted the local appellate court to set aside the asset-freezing mareva injunction that Supreme Court judge Howard Cooke issued against himself, Ajax and Domville on November 12, 1998.

Ajax, a provident society and Domville, which is 51 per cent owned by Ajax, are not considered as part of the Eagle Empire, which, like many other financial institutions in the mid-1990s crumbled under insolvency.

However, appellate court judge, Henderson Downer, who heard the appeal in May and June of 2000 along with justices Paul Harrison and Seymour Panton, said that the mareva injunction, which was issued at the request of Finsac, the company set up by the Government to rescue failed financial institutions, was a necessary precaution.

“This is an important case challenging Chen-Young’s conduct as a director of (the Eagle Merchant Bank and Crown Eagle Life Insurance Company Limited) which became insolvent under his watch,” Downer said. “Further, he is being charged with breach of fiduciary duties and negligence, as well as other serious charges. If these charges are sustained, there will be serious consequences…..It was, therefore, appropriate to restrict Chen-Young’s rights to his property as it was rightly feared that he would remove his assets from this jurisdiction…..” the judge said.

However, Justice Downer added that in the interest of even-handedness, the mareva injunction would be set aside if the attorney-general did not, within 14 days, file an undertaking in the Supreme Court to pay damages to Chen-Young in the event that the case is resolved in his favour.

“If there is compliance with this directive, the (mareva) injunction will continue until the trial is determined,” he said.

Chen-Young, who now lives in Florida, sold controlling interest in the failed Eagle Empire to the Government through Finsac for $1 in 1997.

The sale, just one in a series of legal steps to recover what was left of the insolvent group, was followed by a $400-million lawsuit filed by Finsac through the Eagle Merchant Bank and Crown Eagle Life Insurance Company Limited and the request for the mareva injunction.

In addition to the mareva injunction, Chen-Young’s lawyers challenged the validity of the statement of claim attached to the lawsuit on the ground that it did not disclose a reasonable cause of action and that their subsequent requests for further and better particulars had not been satisfied.

However, Justice Downer said that their claims, which related to an expenditure of J$64,512,468 on renovations and additions to the empire’s premises in New Kingston, had been amply answered by the plaintiffs.

“The particulars supplied in this case were ample. Many were given in great detail…” he said.

The 84-page judgement, which took two years to be handed down because of what Justice Downer said was a significant increase in the number of long and difficult appeals triggered by the financial crisis of the mid-90s, concluded with the judicial note that the issues in the case were of general public importance as taxpayers have been forced to meet a bill of $120 billion to rescue the financial community so far.