Jamaican Redevelopment Foundation Inc. v Anthony Everald Ferguson
| Jurisdiction | Jamaica |
| Judge | BROOKS J |
| Judgment Date | 22 July 2011 |
| Judgment citation (vLex) | [2011] 7 JJC 2202 |
| Court | Supreme Court (Jamaica) |
| Docket Number | CLAIM NO 2010 HCV 03288 |
| Date | 22 July 2011 |
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
IN THE CIVIL DIVISION
CLAIM NO 2010 HCV 03288
Ms Tavia Dunn instructed by Nunes Scholefield DeLeon & Co. for the claimant.
Mortgage – Equitable mortgage – Loan made to registered proprietor of land – Agreement for land to be security for loan – Proprietor depositing certificate of title in pursuance of agreement – No instrument of mortgage executed – Whether equitable mortgage in place – Enforcement of equitable rights – Registration of Titles Act, section 103 – Conveyancing Act, section 28 (2) – Judicature (Supreme Court) Act, section 48
In or about May 1996 Crown Eagle Life Insurance Company Limited (Crown Eagle) loaned $900,000.00 to Mr Anthony Ferguson. As a condition of the loan and as security therefor, he handed over to Crown Eagle, his certificate of title for a vacant plot of registered land located in Chancery Hall in the parish of Saint Andrew.
Mr Ferguson, however, defaulted on the repayment of the loan. Crown Eagle also had financial difficulties. Eventually, its loan portfolio (which included the debt by Mr Ferguson) was assigned to Jamaican Redevelopment Foundation Inc. (JRF).
JRF wishes to collect the debt but has found that it cannot readily sell the fee simple interest in the land because Mr Ferguson did not execute a registrable mortgage in respect of the land. JRF has therefore applied, by way of a Fixed Date Claim, for this court to declare that it holds an equitable mortgage in respect of the land. It also seeks, if the court accepts that it is a mortgagee, an order allowing it to sell the land to recover the sums outstanding.
The issues for the court to resolve are:
The relevant law
Approaching the court
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a. whether Mr Ferguson's actions amount to a mortgage of the land,
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b. what relief is available to the holder of an equitable mortgage.
Miss Dunn, who appeared for JRF, in a comprehensive presentation, pointed first to part 66 of the Judicature ( Civil Procedure Rules) 2002 (the CPR), as outlining the relevant procedure for a mortgagee to approach the court in matters such as these. Rule 66.1 (1) paragraph (a) of the CPR allows a mortgagee to secure an order for the payment of monies secured by a mortgage. Paragraph (b) allows for an order for sale of the mortgaged property. Rules 66.2, 66.3 and 66.4 set out the procedural requirements for this type of claim.
Creation of an equitable mortgage
Section 103 of the Registration of Titles Act (the ROTA) stipulates that the proprietor of land may mortgage same by signing a mortgage in a form authorised by one of three specified schedules of the ROTA. Unlike a mortgage of land which is not under the ROTA, a mortgage of registered land does not operate as a conveyance of the interest in that land. The registration of a mortgage under the ROTA does, however provide security to the mortgagee by way of being a charge on the land. Registration allows the mortgagee specific powers provided by the ROTA. These powers are in addition to any powers contained in the mortgage instrument.
Where the mortgagor executes a document purporting to charge his interest in land, which document does not satisfy the requirements of the ROTA, the question to be ascertained is what effect the document has, if any. In the general law relating to real property, there is no doubt that the owner of an interest in land may create an equitable mortgage.
One method by which an equitable mortgage may be created is ‘by the delivery to the lender of the title deeds relating to the borrower's land, accompanied by a demonstrably clear intention to treat the land as security for the monies advanced’ (per Graham-Perkins J (as he then was) in Fitzritson v Administrator...
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