Imperial Suites Hotel Ltd v Leroy Johnson

• Jurisdiction: Jamaica
• Judge: D. Fraser J
• Judgment Date: 15 January 2019
• Neutral Citation: [2019] JMSC Civ 9
• Docket Number: CLAIM NO. 2015HCV05095
• Court: Supreme Court (Jamaica)
• Date: 15 January 2019

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

CLAIM NO. 2015HCV05095

BETWEEN:

Imperial Suites Hotel Limited

Claimant

and

Leroy Johnson

Defendant

IN CHAMBERS

Seyon T. Hanson instructed by Seyon T. Hanson & Co. for the claimant

Keith Bishop and Andrew Graham instructed by Bishop & Partners for the defendant

Application for striking out of Defence and/or Summary Judgment — Whether there exists reasonable grounds for defending the claim pursuant to rule 26.3(1)(c) of the Civil Procedure Rules or a real prospect of successfully defending the claim pursuant to rule 15.2(b) of the Civil Procedure Rules — Defendant lacking locus standi as either shareholder or creditor of company to defend action on behalf of company — The company was the mortgagor and has a separate legal personality — Only the company has the legal standing to challenge the transfer of title pursuant to mortgagee's power of sale — Allegation that property sold at an undervalue — Remedy for mortgagor lies in damages against the mortgagee under s. 106 of the Registration of Titles Act — Mortgagor company now non-existent — Indefeasibility of Certificate of Title except where there is fraud pursuant to s. 70 of the Registration of Titles Act — General and vague allegations insufficient for the purposes of establishing fraud — Robust statutory protection of the bona fide purchaser for value of property by virtue of sections 68 and 106 of the Registration of Titles Act — Purchaser not required to be concerned about manner in which the mortgagee came by Registered Title pursuant to s. 71 of the Registration of Titles Act — Circumstances do not disclose claimant was or could subsequently be shown to be a party to a “continuing fraud” — Absent “continuing fraud” right to pursue action for fraud extinguished by the Limitation of Actions Act see sections 27, 30 and 46 and Interpretation Act section 41

D. Fraser J

The Application

1 This application was filed by the claimant on November 11, 2016. Save for the first two orders sought, the application seeks the same reliefs as those in the parent claim filed on October 29, 2015. The orders sought are:

• i) That the defendant's defence be struck out;

• ii) That summary judgment be entered in favour of the claimant;

• iii) A declaration that it is the legal and beneficial owner of land registered at Volume 1165 Folio 960 of the Register Book of Titles with civic address 5 Pointe Crescent, Ocho Rios in the parish of Saint Ann;

• iv) An injunction to restrain the defendant his servants or agents from renting, leasing, collecting rent or otherwise dealing with the property and from threatening and/or preventing the claimant its servants or agents from entering upon and possessing the property;

• v) An order for recovery of possession of the property against the defendant;

• vi) An account of all the rental unlawfully collected by the defendant since April 2015 and ongoing;

• vii) That the defendant pays to the claimant all the sums unlawfully collected for rental since April 2015/or in the alternative damages for trespass;

• viii) That the defendant pays to the claimant the sum of $326,444.24 paid by the claimant to the National Water Commission for water usage on the property by the defendant his servants or agents.

• ix) Interest;

• x) Such further and/or other relief as this Honourable Court deems just;

• xi) Costs to the claimant.

The Evidence

2 The evidence on behalf of the claimant was contained in the affidavit of Dave Green. A part of the challenge to the application by the defendant is that Mr. Green is not an appropriate affiant on behalf of the company and that significant content in his affidavit is compromised by hearsay. These issues will be addressed later. At this point his affidavit will be utilised to outline the evidence on which the claimant sought to rely.

3 The Affidavit of Dave Green filed on November 11, 2016 includes the following evidence outlined in summary:

• i) That he is the Secretary of the claimant company and is duly authorized to swear the affidavit having direct knowledge of the events arising in this matter and by virtue of his position in the claimant. The claimant company is duly incorporated under the Laws of Jamaica — (A copy of the Certificate of Incorporation was exhibited marked DG-1);

• ii) The claimant became the registered proprietor of the property registered at Volume 1165 Folio 960 of the register book of titles on or about March 12, 2015 which it bought for US$350,000.00 — (A copy of the Duplicate Certificate of Title is exhibited marked DG-2);

• iii) The defendant is a businessman who occupies the 3 bedroom penthouse unit on the 3 ^rd floor at 5 Pointe Crescent, Ocho Rios in the parish of Saint Ann, however he has no legal or equitable interest in the property which was previously owned by L.F.G.J. General Contracting Company Limited from whom the property was transferred based on a power of sale pursuant to a mortgage;

• iv) L.F.G.J. General Contracting Company Limited was removed from the register of Companies on February 15, 2010 — (A copy of the Status Letter from the Registrar of Companies is exhibited marked DG-3);

• v) The defendant is not a tenant of the property and to the best of his knowledge pays no rental for the part of the property he occupies;

• vi) That an injunction was granted by this Honourable Court on September 12, 2016 restraining the defendant his servants or agents from: i) preventing the claimant its servants or agents from entering or remaining on the property in dispute in this matter; and ii) collecting rent; until the determination of the claim. (A copy of the Formal Order was exhibited marked DG-4). The defendant was also ordered to disclose details of all the leases and/or rental agreements he had entered into with tenants at the property. In the defendant's affidavit filed September 30, 2016 he failed to fully make those disclosures.

• vii) The defendant's defence was filed out of time and makes allegations of fraud against a third party being the mortgagee who sold the property pursuant to powers of sale;

• viii) The defendant's defence has no real prospect of success as the matters raised in the defence would only lead to damages against Mr. Aloi the mortgagee who exercised his powers of sale;

• ix) Neither the claimant nor its managing director has been a party to any fraud as alleged;

• x) That the claimant has not been able to enter into tenancy arrangements with the occupants of the property, and the defendant is acting in breach of the Injunction which prohibits him from collecting rental;

• xi) That agents of the claimant are being intimidated upon visits to the property;

• xii) That the defendant has allowed the payments for water supplied to the property to fall into arrears and the claimant paid an outstanding bill of $326,444.24 in September 2015 — (A copy of National Water Commission and National Commercial Bank receipts were exhibited marked DG-8);

• xiii) The defendant has no defence to the claim filed, and has no legal right to maintain possession and/or occupation of the property to the exclusion of the registered proprietor;

• xiv) That any damages flowing from the sale of the property to the claimant would be against the person who exercised the power of sale to sell the property to the claimant and the only person who would be entitled to pursue a claim in damages would be LFGJ General Contracting Company Limited which is no longer in existence;

• xv) That judicial time and costs would be saved by dealing with the matter summarily.

4 The Affidavit of Leroy Johnson in response to that of Dave Green was filed on January 11, 2017. It includes the following evidence outlined in summary:

• i) That he resides at Lot 5 Point Ocho Rios, C/o Falcon Crest Hotel, Ocho Rios in the parish of Saint Ann and he is a businessman and the defendant in the matter;

• ii) That though the claimant is the paper title owner of the premises registered at Volume 1165 Folio 960 of the Register Book of Titles as it was “sold” to the claimant by Mr. Leonard Aloi, that sale was procured by fraud as Mr. Leonard Aloi and other persons:

  • (a) Caused his name to be associated with the Incorporation of L.F.G.J General Contracting Company Limited;

  • (b) Caused his address and other personal details to be associated with the said Company;

  • (c) Without his knowledge and/or consent wrote a signature resembling his signature on documents, including the Instrument of Transfer, on the Company documents used to Incorporate L.F.G.J General Contracting Company Limited; and

  • (d) Presented the Incorporating documents as a legitimate Company that was used to purchase Lot 5 Point Ocho Rios in the parish of Saint Ann.

• iii) That the premises is about one and one half acres of land in the heart of Ocho Rios on which is a 30 bedroom Hotel; three big halls that include an entertainment area; six shops and a three bedroom pent house. The sale price of US$350,000 is a massive reduction on the real value of the premises which was valued by two reputable valuers. (Copies of those valuations were exhibited marked LJ500 and LJ600);

• iv) That in “selling” the property to the claimant, Leonard Aloi failed and/or neglected to give the required statutory notice under the Registration of Titles Act;

• v) That the claimant was incorporated months before the alleged purchase and does not seem to have a bank account or any business in Jamaica or anywhere in the world.

• vi) That his legitimate Company incorporated in New York City in the United States of America is L.F.G.J. General Contracting Company Inc. and it is clear Leonard Aloi and others formed L.F.G.J. General Contracting Company Limited to confuse and deceive himself and others;

• vii) That it was money from his savings and investments loaned to his company that was used to purchase Lot 5 Point Ocho Rios in the parish of Saint Ann;

• viii) That in recent...