Doyen Arthur Williams v First Global Bank Ltd
| Jurisdiction | Jamaica |
| Judge | Batts J |
| Judgment Date | 08 December 2017 |
| Neutral Citation | [2017] JMCC Comm 39 |
| Docket Number | CLAIM NO. 2013CD00084 |
| Court | Supreme Court (Jamaica) |
| Date | 08 December 2017 |
[2017] JMCC Comm 39
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
IN THE COMMERCIAL DIVISION
Batts J
CLAIM NO. 2013CD00084
Gillian Mullings instructed by Naylor & Mullings for Claimant.
John Graham and Peta-Gaye Manderson instructed by John G. Graham & Co. for Defendant.
Ball v. Victoria Mutual Building Society [2017] JMSC Civ 171 – Cuckmere Brick Company Ltd v. Mutual Finance Ltd v. Cuckmere Brick Co. Ltd. [1971] 2 All ER 633.
Mortgage — Exercise of Power of Sale — Duty of mortgagee — Sale on Open Market — Valuation — Whether valuation current — Description of property — Whether error material — Whether fact that mortgagor prevented inspection material — Negligence — Whether claim to be struck out — No subdivision or building approval — Whether mortgagee to await grant.
On the first morning of trial counsel for the Claimant made two applications. The first was an application to amend the claim to insert the words “bad faith”. This was not opposed and was granted as prayed.
The second application was to be allowed to file a new witness statement from one J. Soares. That application was strongly opposed. I granted the application having heard submissions, and in particular the Claimant's explanation for the lateness of the application (that witness could not be located). Permission to file and serve the statement was granted on condition that the witness would be the last one called, so as to give the Defendant's attorney maximum time to take instructions.
The matter concerns the Defendant's exercise of powers of sale contained in a mortgage. The Claimant alleges that the Defendant breached its duty and ought to have obtained a higher price. Allegations of negligence and fraud, and after the amendment bad faith, were made. The Defendant traverses all these allegations.
The Claimant called ordinary and expert witnesses in support of his claim. The thrust of the evidence of each will be shortly stated. I will not, except to the extent necessary to articulate the reasons for my decision, rehash details of the evidence.
The Claimant first gave evidence. His witness statement signed on the 20 th March 2017, stood as his evidence in chief. He described himself as a medical doctor but later admitted to the cross examinor that he is not a medical doctor. He is a chiropractor. No adequate explanation was provided for this miscategorisation. He gave an account of the relationship with the Defendant and the circumstances under which funds were borrowed. The money was to be used to renovate the premises the subject of the mortgage. The premises contained an apartment building with civic address 10 Rovan Drive Jacks Hill St. Andrew, registered at Volume 1121 Folio 102 of the Register Book of Titles.
The Claimant describes his apartments after the improvements as “luxury apartments” with a total building area of 7,206 square feet comprising —
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— 2 three bedroom,
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— Three two bedroom including a townhouse with 2 1/2 bathrooms.
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— Two studio apartments
He accuses the Defendant of wrongfully and/or negligently doing the following:
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a. Misdescribing the property in its advertisements for auction as:
“a three storey detached building thought to consist of 5 separate fully self-contained apartment units with a building area of 5000 square feet.”
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b. Misdescribing the property in the advertisements in support of the sale by private treaty as
“a three storey detached multi-facility dwelling consisting of 5 separate self-contained apartments.”
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c. Listing the property with Valerie Levy & Associates for a price of $30,000,000. This although the reserve price at the earlier auction had been $46,000,000 and the Defendant had, in February 2010, a valuation which stated the market value of the property to be $80 million.
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d. Selling the property in 2012 for $24.4 million, only 33% of its appraised value.
Tendered in evidence through the Claimant, as Exhibit 1, was a listing of the property by Valerie Levy & Associates for US$351,288. It is there described as—
“… three storey detached multifamily dwelling is configured into 5 separate self-contained apartments. (A composition of two (2) bedrooms, 2 bathrooms, two 3 bedrooms, two bathrooms and one 3 bedroom, 2 bathrooms respectively.”
Tendered into evidence by consent as Exhibit 2 was an Agreed Bundle of documents (labelled as Agreed List of Documents).
When cross-examined the Claimant admitted that the loan was denominated in United States dollars in the Guarantors Mortgage (document # 13 of Exhibit 2). The document bore a notation that “J$ equivalent of $25 million was for Stamp duty purposes only.” The Claimant endeavoured to distance himself from those words and insisted that his document (the commitment letter) did not have that equivalency. When shown the commitment letter (document #8 Exhibit 1 in the Agreed Bundle) he denied that was the correct one. He referred to another document which he said he had in his possession. He produced an unsigned document. This was marked ‘A’ for identity. It was never put in evidence. This attempt by the witness to establish that the loan was denominated in both United States and Jamaican dollars is symptomatic of the witness's general approach to the evidence. I was not particularly impressed and did not find him to be a person of candour. He was similarly inaccurate on the question whether he had paid the insurance premiums for the premises. Although the witness asserted he had obtained/applied for subdivision approval and approval of NEPA/KSAC for the construction work on the premises, cross-examination revealed these had not been produced. The Claimant says they were done on his building as he had given instructions to that effect, but he had not seen them. The position was the same with respect to applications to modify the restrictive covenant on the title.
On the morning of the 3 rd October 2017 Claimant's counsel purported to file and rely on an Affidavit In Response to Request for Information and a Supplemental List of Documents. These included approved plans. Mr. Graham objected. The Request for Information had been filed on the 12 th October 2016. He claimed to be taken by surprise and if this late filing were to be allowed he would require an adjournment to take instructions. I decided to refuse the Claimant permission to rely on documents filed so late in the day and out of time. A copy of the alleged approved strata plan was already attached to the expert report of Mr. Easton Douglas. That report was later put in evidence as Exhibit 5. The plans bore a stamp from the Kingston and St. Andrew Corporation dated 20 th March 2012.
The other issue of concern to me, which arose in the cross-examination of the Claimant, concerned the willing buyer Mr. Tony Tesang who the Claimant says he had identified. It turns out that the Claimant at no time disclosed the identity of this person to the Defendant. He told the court that an agreement was signed with Mr. Tesang and yet no such document was produced. Indeed this part of his evidence is worthy of quotation.
“Q. You emphasise how somebody willing to offer
money for property.
A. Yes Tony Tesang
Q. did you sign an agreement with him
A. I did
Q. have you disclosed it
A. No
Q. You never completed any agreement with Mr.
Tesang
A. No he was waiting on Strata Title
Q. up to when property sold you never got Strata Title.
A. no, [but] application was made
Q. are you saying bank should have waited until you
got Strata Title.
A. Yes
Q. Did you write to them saying you apply for Strata
Titles
A. No, I had a meeting with them
Q. You offered to pay all the money in 2010 within 30
days, did you mention anything about you having a purchaser
A. No I did not write
Q. Your lawyer did
A. I don't know if he mentioned it.”
This evidence is indicative of a Claimant who is not truthful. It does seem remarkable that whilst knowing the Defendant was taking steps to sell his property he neither brings to their attention a pending application for Strata Titles nor a purchaser with whom he has an agreement at a price that would have liquidated his loan. The Claimant asserts that Mr. Tesang had agreed to pay $45 million for one apartment.
The Claimant's next witness was Mr Ryan Mortell. A witness summary had been filed. He is a realtor employed to Valerie Levy & Associates. He stated that the property was listed for $30 million on behalf of the Defendant. It was listed on their website. He identified Exhibit 1 as a ‘snapshot’ of the listing. When cross-examined the witness stated that in the year the property was listed no offers were received for it.
Mr. Easton Douglas a chartered Valuation Surveyor, Real Estate Consultant and Realtor was the Claimant's expert witness. His expert report was tendered and admitted as Exhibit 5. The Claimant's attorney was allowed by way of amplification, to ask whether the lack of necessary building approvals would have negatively affected the sale price. His answer I will quote in its entirety,
“It would not really affect sales price, because if permission not given it is not illegal until enforcement notice is served. So no effect on a valuation once building is being done.
Many building not need it until promulgation of 2017 Development Order. Also note under the Local Improvements Act dealing with subdivision also not affect value because a subdivision is personal and it depends what action the local authority takes in dealing with a subdivision.”
That evidence was immediately followed by the following exchange in cross-examination.
“ Q. At the beginning you say affect price you mean not affect value you attribute to it.
A. It affects neither price nor value”
The expert...
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