Jamaica Citizens Bank Ltd v Reid

JudgeBeckford, J.
Judgment Date16 January 1995
CourtSupreme Court (Jamaica)
Date16 January 1995
Docket NumberC.L. J.822 of 1987; C.L. J. 230 of 1988

Supreme Court

Beckford, J. (AG.)

C.L. J.822 of 1987; C.L. J. 230 of 1988

Jamaica Citizens Bank Limited

Mr. Michael Hylton for the plaintiff.

Mr. Enos Grant instructed by Mr. Gayle Nelson for the defendant.

Real property - Mortgages — Plaintiff sought possession of premises from the defendant because of the defendant's default in payment on the mortgages affecting the property — Plaintiff claimed $1.2M with interest from the defendant for moneys loaned — Judgment was for the plaintiff in the sum of $2,094,101.99 with interest at a rate of $879.23.


Beckford, J. (AG.):


In handing down this judgment, I sincerely regret the delay which was due to several unfavourable factors and pray that no undue inconvenience was caused to the parties.


This is a consolidation of Suits C.L. J-822 of 1987 and C.L. J-230 of 1988 the parties in both suits being identical.


In the first suit the plaintiff as mortgagee seeks possession of premises 7A Temple Mead from the defendant as mortgagor, whom the plaintiff claims to be in default under three mortgages.


The second suit is a claim by the plaintiff to recover the sum of $M1.2 together with interest which the plaintiff alleges is the balance due to it from the defendant for moneys loaned.


The defendant for his part denies that he is a debtor of the plaintiff and says if there is a debtor in the matter, that debtor is a company - Reid's Real Estate Corporation Limited, of which he is a director and shareholder. Further, any debt incurred by the said company was repaid. The defendant says further that any documents signed by him were signed in blank as agent of this company and later filled in by the plaintiff in the defendant's absence.


The defendant counterclaims that the plaintiff sold his premises at 1 Hendon Drive without authority, or in the alternative, at an undervaluation. He seeks a taking of accounts and re-opening of the sales transactions or in the alternative a sum of $7,510.000.00 damages with interest thereon.


In reply the plaintiff denies that the sale was improper or that any documents were signed in blank; maintains that the defendant aril not the company is the debtor and denies that the debt was ever repaid.


Those are the issues.


Both sides agreed on three bundles of documents containing:

  • (a) copies of Certificate of Title, mortgage documents, valuation reports. promissory notes, various letters from the plaintiff to the defendant and from the previous attorneys for the defendant to the plaintiff.

    These bundles were by consent admitted in evidence as Exhibit 1 to 3 respect-: Added to these were seven other exhibits relating to:

  • (b) several bank statements for Reid's Real Estate Corporation Limited for May, July, August and September 1993; copies of mortgage documents. Certificate of Title add a note relating to the date of Mr. Cleary's departure from the plaintiff's bank.


Evidence on behalf of the plaintiff came through two witnesses, Mr. Errol Lyle a former employee and Mr. Fred Cuthbert presently employed as manager in charge of loan restructuring at the plaintiff's bank.


Mr. Errol Lyle was between January, 1982 and December, 1992 the Assistant General Manager in charge of credit at the plaintiff's bank, King Street branch (the relevant branch) with responsibility for delinquent credit accounts. In the course of his duties, he became acquainted with the defendant who operated what he described as not merely a “delinquent” but a “critical” account.


As a member of an in-house Credit Committee he gave evidence of three loans being approved in favour of the defendant and evidenced on three promissory notes, for the purpose of construction work at Temple Mead (the subject matter of the first action).


The first loan was in the sum of $488,816.00 for which a promissory note dated 23 rd August, 1984 was executed. The second loan was for $238,604.64 evidenced by promissory note dated 31st August, 1984. In 1985 when the defendant sought further lending facilities, the committee agreed to consolidate these loans together with an overdraft operated by the company for work done on Temple Mead, in one loan of $M 1.2 together with interest and this was evidenced by a promissory note dated 2 nd May, 1985.


Witness said the defendant was required to execute mortgages in addition to promissory notes to cover the total amount of $M1.2 in respect of the said Temple Mead premises. He gave evidence of the system adopted in the creation of a mortgage but said he was not present when any of the instant mortgages were executed. Mr. Lyle admitted that the plaintiff as mortgagee, sold premises 1 Hendon Drive of which the defendant was the mortgagor. He said it was in an effort to lessen the defendant's indebtedness, as the defendant had defaulted on his mortgage payments in relation to those premises.


The second and final witness for the plaintiff, Mr. Fred Cuthbert, gave evidence of dealing with the defendant's account which he called a “non-performing asset.” He said he personally did the calculations which were included in the Further and Better Particulars filed by the plaintiff on the 10th May, 1993. Interest, he said, is calculated on a daily basis and is added to the outstanding figure so as to give a current paying out figure.


The defendant's loan is the type of loan on which the bank can vary the interest rate. At all times the interest charged on the defendant's account was the prevailing rate charged by the bank so that as of the 14th June, 1993 the defendant owed the plaintiff $M4,134,602.42.


The only witness for the defendant was the defendant himself. He described self as a businessman and company director of Reid's Real Estate Corporation Limited and other companies. He said the business of the company was real estate development for which the company would go to their bankers and get “a loan or mortgage or bridge financing or anything.” The company, he stressed, would get the loan although the Registered Titles to any properties used as security would be in his (the defendant's) name. He denied the creation of any mortgages or indebtedness to the plaintiff saying there was an overdraft operated solely by the company. This overdraft war secured by title deeds for 7A Temple Mead, 11 Clifton Close and 1 Hendon Close and in no other way and that he was not asked and did not sign any guarantees for the company.


He gave evidence of having established and maintained a business relationship based on mutual confidence with the plaintiff's several officers. As a result he signed a number of blank forms which he says he now sees attached to the several mortgages. He admitted that some of the blank forms he signed started with the words: “Encumbrances …” and others with the words “Date of mortgage…” with each paragraph containing the words “mortgagor and/or mortgagee.” He signed in a blank form headed time or demand promissory note “just printed information with spaces - I signed that.” He said he went to the plaintiff in 1985 and was told something about consolidating loans and he signed another of the time or demand promissory note. This he said he signed on behalf of his company and did not intend personal liability. He agreed that at no time when he appended his signature did he signify that he was signing on behalf of his company.


The defendant said he later sought from the plaintiff copies of all documents he had signed and now saw that all the single blank sheets of paper he had signed were attached to mortgages and filled in with amounts and dates. The promissory shad also been completed and he recognized his signature on the documents.


His evidence was that the plaintiff could have made a demand on him in accordance with the mortgages under which they sold his premises. He did not know - “I get a lot of letter” he said. He said the plaintiff sold his premises at 1 Hendon to for $450,000.00 which was not a proper value yet he gave no evidence of the value of the premises in 1988. The valuation he gave was for $M2.6 in 1991 some four years after the sale. He said the valuation the plaintiff got of $464,700.00 the event of a forced sale was wrong but there was no proof from him as to why it was wrong.


Defendant agreed that he had a valuation done on the Temple Mead premises in 1984 and that valuation disclosed that there were two mortgages in favour of the plaintiff registered on the title, yet he maintained that he did not know that the plaintiff had registered any mortgages on his property.


At the conclusion of the evidence both attorneys for the plaintiff and the defendant made oral and written submissions of fact and law for which I am deeply indebted to them.


In relation to the claim for possession of premises 7A Temple Mead, the plaintiff tendered in evidence a copy of the registered title with mortgages with an upstamping totalling $M1.2 registered thereon. This was at pages 1-3 of Exhibit 1 followed by mortgages numbered 368663, 4213052 and 431350 with miscellaneous instrument #92150 pages 4-7; 10-14; 24-28 and 30-32 at Exhibit 1. Also exhibited at page 33 is a letter dated 14th March, 1986 in accordance with paragraph 2(f) of the mortgage document demanding payment within 14 days. There was no evidence of any repayment of the loan. The next exhibit was the notice advertising the premises for sale by auction (at page 13 Exhibit 2). Next comes letter dated 23rd December, 1986 at page 16 of Exhibit 2 in relation to the aborted auction sale. The plaintiff then sought to sell by private treaty which fell through by virtue of the defendant's refusal to give up possession. This is the evidence in relation to the possession.


I turn now to the law in relation to that evidence. Section 68 of The Registration of Titles Act provides that:–

“… every certificate of...

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