Arnaldo A Brown v Harvest Tabernacle Ltd
| Jurisdiction | Jamaica |
| Judge | Simmons JA,McDonald-Bishop JA,V Harris JA |
| Judgment Date | 13 July 2021 |
| Neutral Citation | [2021] JMCA Civ 35 |
| Docket Number | SUPREME COURT CIVIL APPEAL NO COA2019CV00085 |
| Court | Court of Appeal (Jamaica) |
and
THE HON Mrs Justice McDonald-Bishop JA
THE HON Miss Justice Simmons JA
THE HON Mrs Justice Harris JA (AG)
SUPREME COURT CIVIL APPEAL NO COA2019CV00085
IN THE COURT OF APPEAL
Leonard Green instructed by Chen, Green and Co for the appellant
Jalil Dabdoub instructed by Dabdoub, Dabdoub & Co for the 1 st respondent
Georgia Hamilton instructed by Georgia Hamilton and Co for the 2 nd respondent
I have had the privilege of reading, in draft, the judgment of my sister, Simmons JA. I agree with her reasoning and conclusion with nothing useful to add.
On 26 July 2019, having heard the application of the appellant (the 2 nd defendant in the court below), to set aside the default judgment entered against him, Batts J, found that the defence had no real prospect of success and made the following orders:
“[32] … The application to set judgment aside is refused. Costs will go to [Harvest] to be taxed or agreed.”
On 9 August 2019, the appellant aggrieved by this outcome filed a notice of appeal challenging certain findings of fact and law.
On 12 March 2012, the respondents entered into an agreement for the sale of two parcels of land registered at Volume 1125 Folio 272 and Volume 1437 Folio 13 of the Register Book of Titles (‘the properties’). The appellant, who is an attorney-at-law, was retained by the 2 nd respondent, Colin Jackson, the registered proprietor of the properties and chief executive officer of Caribbean Consumers Limited, and had carriage of sale. Harvest Tabernacle Limited, the 1 st respondent (‘Harvest’) is a company duly incorporated under the laws of Jamaica and is a congregation of members of a church.
The purchase price for the properties was $36,000,000.00 and payable in accordance with clause five of the agreement as set out below:
“(a) A deposit of Two Million Five Hundred Thousand ( $2,500,000.00) Dollars payable to the Vendor's Attorney upon signing which is hereby acknowledged.
(b) A further payment of One Million ( $1,000,000.00) Dollars within thirty (30) days of the signing hereof.
(c) A further payment of One Million ( $1,000,000.00) Dollars within sixty (60) days of the signing hereof.
(e) A further payment of Two Million Seven Hundred Thousand ( $2,700,000.00) Dollars within ninety (90) days of the signing hereof.
(f) Balance of Twenty Million Eight Hundred Thousand ( $28,800,000.00) is subject to a Vendor's [mortgage] as set out in special condition [7]. “(As set out in the original)
Special condition 7 of the agreement stated that the agreement was subject to a vendor's mortgage by which, Harvest was required to make monthly payments of $458,000.00 on or before the 11 th of each month to the 2 nd respondent or his account, commencing upon the purchaser's entry into possession of the property.
Clause 7 of the agreement stipulated that the sale was to be completed within 13 years of the date of the said agreement, on payment in full of the balance of the purchase price and costs of transfer by Harvest in exchange for the duplicate certificates of title for the properties.
There is some dispute surrounding the sums paid by Harvest towards the purchase price. However, some payments were made and Harvest was let into possession.
At the time when the parties entered into the agreement, the property was subject to mortgage no 1663417, dated 18 August 2010, in favour of National Commercial Bank Jamaica Limited (‘NCB’) to secure the sum of $24,000,000.00 with interest. There is some dispute as to whether Harvest, which was legally represented, was aware of the said mortgage. The mortgage fell into arrears and NCB exercised its powers of sale.
As a result, on 9 March 2018, Harvest filed a claim against the appellant and the 2 nd respondent seeking damages for breach of contract and damages for unjust enrichment, and also as against the appellant: (a) an accounting of all the monies paid by Harvest to the appellant and (b) damages for negligence.
It was alleged by Harvest at paragraph 24 of its particulars of claim that it had made payments pursuant to the agreement in the sum of $14,510,000.00 towards the purchase of the properties as set out below:
“Sum paid directly to the [2 nd respondent]
$8,800,000.00
Sum paid directly to the [appellant]:
$3,040,000.00
Sums paid directly to the NCB
$2.670.000.00
Total sums paid on account purchase price $14,510,000.00”
(Emphasis as set out in the original)
The appellant who was served with the claim form and particulars of claim failed, refused or neglected to file an acknowledgement of service within 14 days of service. Consequently, Harvest filed a request for a default judgment, which was entered on 6 April 2018 against the appellant.
On 12 February 2019, the appellant filed an amended acknowledgement of service. The appellant was served with the default judgment on 21 March 2019. On 10 April 2019 a notice of application was filed on his behalf in which the following orders were sought:
“1. A Declaration that the document served on the [appellant] on March 21 st 2019 titled ‘Judgement for Damages to be Assessed’ is irregular.
2. …
3. The Default Judgement entered against entered the [appellant] and entered into binder no. 771 folio no 168 [be] set aside.
4. That the [appellant] be given 14 days to file a Defence.
5. Alternatively, that Judgement entered against the [appellant] be stayed until such time as the General Legal Council shall come to its conclusion on the Professional Conduct of the [appellant].
6. That Costs to be cost in the Claim.
7. Such further orders as this honourable court shall deem fit.”
This application was supported by the following affidavit evidence: affidavit of Arnaldo Brown filed on 10 April 2019, supplemental affidavit of Arnaldo Brown filed on 29 May 2019, affidavit of Sylvan Edwards filed on 17 June 2019 and a third affidavit of Arnaldo Brown filed on 19 June 2019.
Harvest relied on the following evidence: affidavit in response filed by Boswell Raymond and the second affidavit of Boswell Raymond filed on 20 May and 12 June 2019, respectively.
The appellant's draft defence and counterclaim were annexed to the affidavit of Arnaldo Brown filed on 10 April 2019. In his draft defence, the appellant stated that the initial deposit was never paid by Harvest. He also denied that the sum of $3,040,000.00 had been paid to him by Harvest and asserted that any money paid to him by Harvest was paid over to the 2 nd respondent in accordance with the terms of the agreement. In the circumstances, it was posited by the appellant that he had no duty to account to Harvest.
The appellant also asserted by way of a counterclaim that a cheque in the sum of $1,800,000.00 that had been received by him from Harvest in favour of Caribbean Consumers Limited was dishonoured. A cheque in the sum of $700,000.00 was subsequently paid to the appellant as a replacement for the dishonoured cheque, leaving a deficit of $1,100,000.00. The appellant's counterclaim is set out below:
“28. For funds in the amount of One Million One Hundred Thousand Dollars ($1,100,000.00) due and owing to the [appellant] by [Harvest] whom provided the [appellant] with a cheque eventually marked refer to drawer.”
In his consideration of the appellant's application, Batts J conducted a detailed analysis of the affidavit evidence relied on by the parties. The learned judge found that the judgment was not irregularly entered. As such, the appellant was not entitled to have it set aside as of right under rule 13.2 of the Civil Procedure Rules, 2002 (‘CPR’). He indicated that it fell to be considered under rule 13.3 of the CPR and that the primary question was whether the defence had a real prospect of success. If the answer was in the affirmative, the next question would be whether the appellant applied for the judgment to be set aside “as soon as reasonably practicable” and provided “a good explanation” for his failure to file a defence within the stipulated time.
The learned judge found that the defence had no real prospect of success. He stated that the draft defence amounted to a denial of liability and did not “condescend to the level of detail one would have expected of an attorney at law who took his obligations seriously”. He also stated that it was clear from the affidavit evidence and the material that was placed before the General Legal Council that the appellant “neither paid the money to the mortgagee nor took any, or reasonable, steps to ensure that the money was paid to the mortgagee”. Batts J then proceeded to consider whether the appellant owed a duty of care to [Harvest] as he was of the view that, “… the other assertions by the [appellant] these rise or fall on the question whether the fact, that Harvest had its own attorney at law, relieves the [appellant] of any duty of care”. He found as follows at paragraphs [22] and [23]:
“[22] …the circumstances of the case before me are such that a duty ought to be imposed. The [appellant] knew that [Harvest] was purchasing property from the 1 st Defendant. He knew that the property was subject to a mortgage. He knew also that the purchase price was paid by instalments which exactly matched the monthly mortgage obligation of his client, the 1 st Defendant. He knew that the property would not be registered in [Harvest's] name until the mortgage was discharged. He therefore knew that if the instalment payments delivered to him were not applied to the mortgage, as contemplated by the parties, the mortgagee might foreclose or exercise power of sale. It means that, as regards the sums paid to him, he accepted the responsibility to see they were applied in the manner intended. He...
To continue reading
Request your trial
-
Julie Riettie Atherton v Gregory Mayne
... ... service was filed on behalf of the appellant by counsel, Mrs Pauline Brown-Rose (‘Mrs Brown-Rose’). In this acknowledgment of service, it was ... ...