Dorothy Vendryes v Dr Richard Keane and Karene Keane

• Jurisdiction: Jamaica
• Judge: HARRIS JA
• Judgment Date: 15 April 2011
• Neutral Citation: JM 2011 CA 37
• Docket Number: SUPREME COURT CIVIL APPEAL NO. 101/2009
• Court: Court of Appeal (Jamaica)
• Date: 15 April 2011

BETWEEN

DOROTHY VENDRYES

APPELLANT

AND

DR RICHARD KEANE

1 ^ST RESPONDENT

AND

KARENE KEANE

2 ^ND RESPONDENT

[2011] JMCA Civ 15

BEFORE:

THE HON. MR JUSTICE PANTON P

THE HON. MRS JUSTICE HARRIS JA

THE HON. MRS JUSTICE MCINTOSH JA

SUPREME COURT CIVIL APPEAL NO. 101/2009

JAMAICA

IN THE COURT OF APPEAL

CIVIL PROCEDURE - Default judgment - Stay of execution - Costs

Andre Earle and Miss Anna Gracie instructed by Rattray Patterson Rattray for the appellant

Nigel Jones instructed by Nigel Jones & Co. for the respondents

HARRIS JA

1 This is an appeal against the decision of Sykes J contained in an order made on 17 July 2009, where he ordered as follows:

‘Default judgment is set aside;

• 1. In exercise of the Case Management Conference powers, Judgment entered on Claim Form filed on July 16, 2007.

• 2. Leave to Appeal granted;

• 3. Costs of the applications to the Claimants;

• 4. Application for a Stay of Proceedings denied.’

2 On 20 December 2011 we made the following order:

‘Appeal allowed. The decision of the Honourable Mr Justice Sykes on 17 July 2009 is set aside. The counter notice of appeal is dismissed. Costs below and here to the appellant.’

It is further ordered that the counter notice to the counter notice of appeal is allowed. We promised to put our reasons in writing. This obligation we now honour.

3 On 26 September 2003, the appellant and the respondents entered into a lease agreement in respect of land part of Unity Hall in the parish of Saint James, comprised in Certificate of Title registered at Volume 1056 Folio 390 of the Register Book of Titles. With the respondents still in possession as tenants, on 31 December 2004 the parties executed two agreements, one for the sale of chattels and the other for the sale of the property, to the respondents, for the sum of US$300,000.00. It was agreed that both agreements should be read and construed as one. The respondents were required to pay a deposit of US$30,000.00 and a further payment of US$95,000.00 upon execution of the agreement and the balance payable on completion. The time for completion was stated to be as follows:

‘On or before the expiry of Ninety (90) days from the date of execution hereof and upon payment of the Purchase Price and all fees and costs, in exchange for the Duplicate Certificate of Title in registerable form subject to the provisions of Special Condition 7 hereof.’

4 It was also a term of the agreement that possession would be subject to the existing tenancy. Completion was subject to the respondents obtaining a mortgage. Clause 6 of the special conditions of the agreement was expressed to be as follows:

‘This Agreement is subject to the Purchasers obtaining a loan to be secured by a legal mortgage over the said property for an amount of not less than TWO HUNDRED AND SIXTY THOUSAND DOLLARS UNITED STATES CURRENCY (US$260,000.00) OR THE Jamaican dollar equivalent thereof from a recognized financial institution and shall be on such terms and conditions as are usually granted by that institution. The Purchasers shall deliver to the Vendor's Attorneys-at-Law a letter of commitment for such loan within forty-five (45) days of the date hereof; in the event of the Purchasers failing so to do the Vendor shall be entitled to rescind this Agreement within fourteen (14) days thereof and deposit shall be refunded to the Purchaser free of interest and free from deductions.’

5 At the time the parties entered into the agreement for sale, the property was subject to a mortgage to the Jamaica Redevelopment Foundation. There was no evidence that the mortgagees had consented to the sale to the respondents. Significantly, on 8 September 2004 a Receiver was appointed in respect of the property and the respondents ceased to pay rent after that time.

6 By letter dated 9 March 2005, the respondents' attorneys-at-law wrote the appellant's attorneys-at-law advising them that there were defects in the title. On 22 April 2005, Messrs Livingston Alexander and Levy, acting on behalf of Scotia Building Society from which the respondents had secured a mortgage undertaking, wrote to the appellant's attorneys-at-law informing them that it required a perfect title prior to releasing the balance of the purchase money. The appellant was unable to complete the transaction for two reasons, namely, a defect in the title and the acquisition of the land by the government for the building of a highway.

7 A notice to complete was served on the appellant on 4 May 2007. The appellant being unable to effect transfer of the said lands by producing the document of title, impelled the respondents, on 17 July 2007, to bring an action against her by way of a claim form accompanied by particulars of claim, claiming specific performance of the contract. There was also a claim for damages ‘in excess of JA$4,368,338.85’ as well as the sum of US$110,000.00 being the fees and expenses incurred by them because of the appellant's breach of the contract. The appellant was served with the claim form and the particulars of claim. However, the prescribed notes for defendants (form 1A), the form of acknowledgement of service (form 3) and the form of defence (form 5) were not served. The appellant did not file an acknowledgement of service.

8 On 18 October 2007, the respondents filed a request for judgment in default of acknowledgment of service. On 29 October 2007, the respondents filed an amended claim form and particulars of claim, adding Jamaica Redevelopment Foundation as a defendant. Included in the amended pleadings were additional averments as well as a claim for an injunction. The amended documents were served on the Jamaica Redevelopment Foundation but not on the appellant. The claim against the Jamaica Redevelopment Foundation was discontinued on 20 November 2007. On 26 November 2007 the appellant was served with a copy of the default judgment. The Jamaica Redevelopment Foundation, in the exercise of its power of sale as a mortgagee, sold the property to Postroad Ltd to which it was transferred on 3 December 2008.

9 The appellant, on 30 November 2007, filed a notice of application for court orders with an affidavit in support thereof seeking to have the default judgment obtained by the respondents set aside and to have an extension of time to file her defence. The appellant sought to have the default judgment set aside on the ground that the judgment was wrongly entered due to the respondents' failure to comply with rule 8.16 (1) of the Civil Procedure Rules (‘CPR’).

10 In dealing with the question of the setting aside of the judgment in default, the learned judge took into consideration rule 8.16 (1) which prescribes as follows:

‘8.16 (1) When a claim form is served on a defendant, it must be accompanied by –

• a. a form of acknowledgement of service (form 3 or 4);

• b. a form of defence (form 5);

• c. the prescribed notes for defendants (form 1A or 2A);

• d. a copy of any order made under rules 8. 2 or 13; and

• e. if the claim is for money and the defendant is an individual, a form of application to pay by installments (form 6);

• (2) There must be inserted on each form –

  • a. the address of the registry to which the defendant is to return the forms;

  • b. the title of the claim; and

  • c. the reference number of the claim.

• (3) Where there is a standard defence form appropriate to the particular case set out in a practice direction, the form sent to the defendant must be in a standard form of that type.’

11 He noted that the forms to which reference is made under (a), (b) and (c) of the rule were not served on the appellant. He then went on to examine and analyze the contents of the relevant forms. He did not fail to acknowledge that their contents comprise important information which makes service of these forms mandatory. Thereafter, he, concluding that service of the documents was a mandatory requirement, set aside the default judgment on the ground that it had been irregularly entered.

12 Rule 8.16 (1) expressly specifies that, at the time of service, the requisite forms must accompany the claim form. The language of the rule is plain and precise. The word ‘must’, as used in the context of the rule is absolute. It places on a claimant a strict and an unqualified duty to adhere to its conformity. Failure to comply with the rule as mandated, offends the rule and clearly amounts to an irregularity which demands that, in keeping with the dictates of rule 13.2, the default judgment must be set aside. The learned judge was correct in so doing.

13 The learned judge, having set aside the judgment, heard further submissions, then proceeded to conduct a case management conference and entered summary judgment on the ground that the appellant did not have any real prospect of successfully defending the claim.

14 The appellant filed nine grounds of appeal. Eight of these grounds can be considered simultaneously. They are as follows:

• (a) That the Learned Judge erred as a matter of law, In that, he failed to apply and/or misapplied the correct principles of law and the proper considerations relevant to the effects of an amendment on the statement of case as originally filed (see Warner v Sampson (1959) 1 All ER 120 );

• (b) That the Learned Judge failed to appreciate that there was no or no valid claim before the Court owing to the Respondents/Claimant's failure to serve the amended Claim Form filed on the 29 ^th October 2007 on the Appellant/Defendant (see: CPR 8.14 ).

• (c) That the Learned Judge erred when he failed to consider on the evidence before him that the Appellant/Defendant had established a real prospect of successfully defending the claim based on the existence of the mortgage (i.e. encumberance) which was registered on the property and known to all parties;

• (d) That the Learned Judge erred in fact when he...