Charmaine Bowen v Island Victoria Bank Ltd and Others

• Jurisdiction: Jamaica
• Judge: Phillips JA
• Judgment Date: 27 May 2014
• Neutral Citation: JM 2014 CA 54
• Court: Court of Appeal (Jamaica)
• Docket Number: CIVIL APPEAL NO 28/2013 APPLICATION NO 31/2013
• Date: 27 May 2014

Between

Charmaine Bowen

Applicant

and

Island Victoria Bank Limited

1st Respondent

and

Union Bank Limited

2nd Respondent

and

Rbtt Bank Jamaica Limited

3rd Respondent

and

Finsac Limited

4th Respondent

and

Jamaica Redevelopment Foundation

5th Respondent

and

Dennis Joslin JA Inc

6th Respondent

[2014] JMCA App 14

CIVIL APPEAL NO 28/2013

APPLICATION NO 31/2013

JAMAICA

IN THE COURT OF APPEAL SUPREME COURT

CIVIL PROCEDURE - Stay of execution - Order striking out case - Powers of sale of mortgagee - Assignment of mortgage - Costs

Hugh Wildman and Miss Kenisha Baker instructed by Charmaine Patterson and Associates for the applicant

Harrington McDermott instructed by the Director of State Proceedings for the 1 ^st and 4 ^th respondents

William Panton and Miss Cindy Lightbourne instructed by DunnCox for the 2 ^nd and 3 ^rd respondents

Charles Piper and Wayne Piper instructed by Charles E Piper & Associates for the 5 ^th and 6 ^th respondents

IN CHAMBERS

Phillips JA

1 This is an application for a stay of execution of the decision of Pusey J made on 21 March 2013 in which he ordered that:

1. the applicant's claim be struck out;

2. judgment be entered for all the respondents against the applicant;

3. judgment be entered for the 5 ^th respondent against the applicant and the defendant to the counterclaim (one Aldith Ellis, who is not a party to the appeal);

4. the 5 ^th respondent is the mortgagee of the applicant's property located at Chelsea Manor in Kingston 5, in the parish of St Andrew, being all that parcel of land registered at volume 1253 folio 552 of the Register Book of Titles, the 4 ^th respondent having assigned to the 5 ^th respondent the applicant's mortgage, which had initially been given to the 1 ^st respondent;

5. until all sums due and payable by the applicant under a letter of commitment had been paid, the 5 ^th respondent is entitled to exercise all of its rights as mortgagee by assignment in respect of the above-mentioned property;

6. the 5 ^th respondent is the second mortgagee of land located at 14 Penfield Avenue, Forrest Hill Gardens, Kingston 19 in the parish of St Andrew, being all that parcel of land registered at volume 1096 folio 858 of the Register Book of Titles, being land which is owned by the applicant and Aldith Ellis, the 4 ^th respondent having assigned to the 5 ^th respondent the mortgage in relation to that property, which mortgage was initially given to the 1 ^st respondent;

7. until all sums payable under a letter of commitment have been paid, the 5 ^th respondent is entitled to exercise all its rights as a second mortgagee by assignment in respect of the Penfield Avenue property; and

8. costs of the proceedings to the 2 ^nd , 3 ^rd and 5 ^th respondents to be paid by the applicant.

2 The orders were in terms of the reliefs sought on an application to strike out which was filed by all the respondents. The grounds relied on in support of those applications were that the applicant had failed to comply with an order made by P Williams J, which had been extended by K Anderson J; the circumstances justified the making of the orders sought; and the overriding objective of the Civil Procedure Rules (CPR) favoured the grant of the application.

3 The application for stay of execution and injunction was supported by an affidavit of the applicant sworn to on 27 March 2013. In that affidavit the applicant stated that on 21 March 2013 Pusey J had struck out the claim for failing to file a witness statement and accounting. She stated that the failure to do so had not been her fault but the fault of her previous attorneys, Lord Gifford QC, who had been seriously ill and who had instructed Mr Glenroy Mellish to act, but Mr Mellish had not complied with those instructions. She said that new material had since come to light which could explain why he had not complied with the instructions.

4 The applicant further deposed that she had been unrepresented at the hearing as she had been unable to obtain counsel to represent her at that time. She contended that the order would result in significant prejudice, hardship and irreparable damage to herself and her elderly infirmed mother if the 5 ^th respondent were allowed to act on the order, as they would be rendered homeless and would thereby suffer irreparable financial and psychological hardship and loss.

5 In order to appreciate the circumstances in which the application was brought and the orders made, it is necessary to examine the history of the litigation. The matter initially started in 1999, was unable to proceed due to procedural deficiencies and was filed again in May 2004. When the application came before Pusey J, although there had been several trial dates, the claim had yet to be tried having been filed nearly nine years before.

6 In the claim the applicant sought orders for, among other things: a declaration that all sums borrowed from the 1 ^st respondent had been duly paid; a declaration that the applicant is not indebted to the ‘defendant’; a statement of account from the 1 ^st respondent to the applicant showing any sums due and owing by the applicant to the 1 ^st respondent arising out of the relationship of client and banker; and a declaration that the applicant having settled its indebtedness with the 1 ^st respondent, that the 1 ^st respondent returns to the applicant all the securities held by it, or an order that each or any of the respondents that may be in possession of the securities return same to the applicant free from any encumbrances save the restrictive covenants endorsed therein.

7 In her particulars of claim, the applicant asserts that on or around 12 May 1994, she had had a demand loan account in the amount of $1,200,000.00 and an overdraft facility in the amount of $1,300,000.00 for which the agreed interest rate was 68% per annum. In September of 1994, she requested in writing that the overdraft be converted to a loan, but this was not done at the time and in October 1994, she attempted to clear the demand loan by delivering two cheques in the sum of $1,500,000.00 and $131,200.00 to the 1 ^st respondent, which she asserts, were sufficient to pay out the loan. Despite this, the loan was never cleared and the money was applied to the overdraft facility and the overdraft facility was increased on a monthly basis to pay the demand loan, to which she did not consent. She alleges that as a consequence unlawful and penal charges were applied to her overdraft account with the result that the account had exceeded its agreed limit and was attracting penal rates. Sometime during this period, the Chelsea Manor property was pledged as security.

8 The applicant further asserts that representations were made by agents of the 1 ^st respondent that her account would be investigated and adjusted and in anticipation of this, she entered into further financial arrangements and made ‘good faith payments’on the account. The 1 ^st respondent, however, failed to honour its representations, and under threat that her Chelsea apartment would be sold, she executed a mortgage over the Penfield Avenue property. An investigation was eventually done and it was the view of the credit administrator who conducted the report that the applicant had been overcharged amount. However, the applicant was dissatisfied as the period under investigation was not the entire period of the loan as she had requested. The applicant asserts that the overcharged amount has never been refunded and her efforts to have it refunded and the entire period of the loan investigated were hampered. In the process the loan was converted to a United States dollar facility with the consequence that further charges for the conversion of the account were unlawfully levied on her account. She asserts that these sums are owed to her with interest at the rate charged by the 1 ^st respondent. She further asserts that there had been no upstamping or further registration of a security interest on the ‘subject property’. The applicant also asserts that under the threat of the impending sale of her property, she engaged the services of a Mr Dalma James to conduct a forensic audit. The audit, which was conducted on the basis that the interest rate should be compounded annually instead of at monthly rests, identified ‘several discrepancies resulting in the clear conclusion that the [applicant] has overpaid’ the 1 ^st respondent.

9 In its defence, the 1 ^st respondent admits that the interest rate for the facility was 68% per annum. It does not deny failing to convert the overdraft, but it instead has asserted that it did not think it prudent to do so as the demand loan was in arrears and the agreed terms of the repayment had not been adhered to. It admits receiving the cheques to close the demand loan account but states that the amount was insufficient to close the account. It denies any finding by any of its officers that it had overcharged the applicant and the ensuing discussions to reimburse her. Further, it accounts for the United States account by stating that the applicant had requested financing in United States currency, which had been granted and it denies taking any action on the account without the applicant's authorization. It further denies any unlawful charges being levied and instead outlines a series of transactions and events explaining how the applicant came to be owing certain sums. It also denies that there had been no further registration of a security interest on ‘the property’. The 1 ^st respondent further states that by deed of assignment dated 30 September 1998, it transferred the mortgage to Refin Trust. A defence was also filed by the 5 ^th and 6 ^th respondents in which they deny that the interest was 68% per annum, asserting instead that this rate was variable at the discretion of the...