(CMR) Delmira Bodden will have to repay an $80,000 loan to her former business partner after an application for the court to set aside a default judgment for her to repay the loan was dismissed in the Grand Court.
Bodden reportedly borrowed money from Ross McDonough, a local attorney who has been practicing in Cayman for 30 years, to start a small business but failed to repay it.
According to the judgment published last week, Bodden and McDonough, the principal of Dumyat Limited, met in 1994 at a law firm where they both worked and has several interactions and arrangements with properties and business interests over the years.
In June 2020, Bodden requested a loan of $80,000 from McDonough to start a small business. The money was given to her on 4 August 2020, and a promissory note acknowledging the loan was executed by Bodden on 20 August 2020.
In August 2021, McDonough assigned the loan to his company Dumyat and notified Bodden of this, adding that the loan was due and demanded payment. The monies were not repaid and on November 3, 2021, a Writ was filed. Bodden did not appear in court, and a default judgment was served on her in December 2021.
In May 2022, she applied to have the default judgment set aside. She was given leave to withdraw her application in June 2022. Bodden then sought to reopen the application on the grounds that she had felt constrained to withdraw her application because the evidence in support of her original application had been lost by the Civil Registry, thus depriving her of a fair hearing. She was then given leave to proceed with the original summons to set aside.
Her position was the question of whether the monies claimed in these proceedings were due and owing should be considered in other dealings she had with McDonough, particularly a loan he gave her in 2011, which has been secured by five parcels of land she owned in East End.
They agreed for McDonough to develop the land, and she would have a 50% share in the completed development. In consideration of this agreement, McDonough told her not to make any payment on the loan. She said despite this, McDonough had gone on to recover the money she owed him by selling the land.
Ms. Bodden said that this loan of $80,000 had to be tied to that matter because the loan to her of a further sum showed she had not defaulted on the earlier loan secured on the land “because who would lend money to a borrower already in default.”
She further stated that when their friendship ended and they were settling their affairs, they agreed that the East End property would be sold, and if her share was greater than the monies owed, including the $80,000, then the loan would be extinguished, and McDonough would pay her the difference.
McDonough, in response, acknowledged the earlier loan and the agreement for the development of the land but said the project was abandoned after it was realized that it would not be economically feasible.
He, however, denied that he told Bodden that she did not have to repay the loan which had been secured by the parcels in East End. When the monies were not repaid, the land was sold to recover the monies owed.
When asked by the court why he waited so long to sell the land to recover his money, McDonough said because of the friendship he had with Bodden. He said it was also due to their friendship that he loaned her a further $80,000 despite her not paying back the previous loan.
In giving a judgment, Chief Justice Margaret Ramsay-Hale said there was no challenge to the promissory note or that it was due on demand, or that the demand had been made. She further stated that none of the evidence presented by Ms. Bodden was intended to show that the debt secured by the Land had not fallen due or that the land should not have been sold.
Justice Margaret Ramsay-Hale said, “The debt was admitted. Ms Bodden'’s answer to the action on the debt was that the Land was to be valued and if the value were less than she owed, she would have to pay back the $80,000 or so much of it as was not set off by the value of her share. The land can no longer be valued. It has been sold.”
She further stated that “If there were a debt due to Ms. Bodden arising from the sale of the Land, in that the sale price exceeded the debt secured by the Land. Bodden would doubtless have said so and claimed a set off against the $80,000 due under the promissory note”
Justice Ramsay-Hale said Bodden did not have a defense on the merits; as a result, the application to set aside the default judgment was dismissed.