John Ledgister and Another v Jamaica Redevelopment Foundation Inc.

• Jurisdiction: Jamaica
• Judge: Harris JA,Brooks JA
• Judgment Date: 10 May 2013
• Neutral Citation: JM 2013 CA 54
• Court: Court of Appeal (Jamaica)
• Docket Number: SUPREME COURT CIVIL APPEAL NO 130/2012 APPLICATION NO 11/2013
• Date: 10 May 2013

Between

John Ledgister

1st Applicant/Appellant

and

Sunnycrest Enterprises Ltd

2nd Applicant/Appellant

and

Jamaica Redevelopment Foundation Inc.

Respondent

[2013] JMCA App 10

Before:

The Hon Mrs Justice Harris JA The Hon Miss Justice Phillips JA The Hon Mr Justice Brooks JA

SUPREME COURT CIVIL APPEAL NO 130/2012

APPLICATION NO 11/2013

JAMAICA

IN THE COURT OF APPEAL

CIVIL PROCEDURE - Injunction - Application to vary order refusing interim injunction - Whether there were serious issues to be tried

John Ledgister appears in person for himself and also represents the 2nd appellant

Mrs Sandra Minott Phillips QC and Mrs Alexis Robinson instructed by Myers Fletcher and Gordon for the respondent

Harris JA

1 This is an application by the appellants to discharge or vary an order of Panton P made on 15 January 2013, refusing an application made by them for an interim injunction. The learned president refused to grant an injunction for the reason that the application is without merit. The principal ground upon which the applicants seek to set aside or vary the order of the learned president is that such order is unjust.

2 The 2 ^nd applicant is the registered proprietor of lands at Forest Pen in the parishes of Westmoreland and Saint Elizabeth, registered at Volume 1175 Folio 850. The 1 ^st applicant is the managing director and a shareholder of the 2 ^nd applicant. The respondent acquired a debt which has its genesis in a loan to the applicants by the National Commercial Bank (NCB). Between 31 August 1992 and 4 October 1994, three loans were obtained by the applicants from the NCB on the security of the Forest Pen property by way of mortgages, namely, 729730, 764567 and 832252. On 27 July 2000, by a deed of assignment, the mortgages were transferred to Refin Trust. On 13 June 2003, they were transferred to the respondent. On 8 July 2005, the respondent and the applicants entered into an agreement restructuring the debt (the Restructure Agreement) in which it was stated to be US$855,000.00. On 2 May 2012 a notice, making a formal demand for a sum of US$1,101,978.25, was sent to the applicants by the respondent.

3 In an amended claim form, filed on 29 June 2012, the applicants seek the following orders against the respondent:

• ‘1. Rescission of the Agreement To Restructure Existing Debt dated July 8 ^th , 2005.

• 2. A Declaration that the Agreement To Restructure Existing Debt dated July 8 ^th , 2005 is null and void and does not have legal charge over the premises at Volume 1175 Folio 850 of the Registered [sic] Book of Titles unless debt claim [sic] verified, validated and authenticated.

• 3. Damages, Restitution and Accounting of Profits for Fraudulent Misrepresentation, Undue Influence, Economic Duress, Unconscionable & Unjust Enrichment is [sic] alternative to number (1) herein.

• 4. An injunction to Restrain the Defendant (whether acting by itself, its servants, and or its agents or otherwise or howsoever) from doing any of the following acts:

  • (i) Selling, pledging or disposing in any way of premises registered at Volume 1175 Folio 850 of the Registered [sic] Book of Titles.

• 5. An Order for Discharge of Mortgage #729730, #764567, #832252 for parcel registered at Volume 1175 Folio 850 of the Registered [sic] Book of Titles.

• 6. An Order for the return of Claimant's Duplicate Certificate of Title registered at Volume 1175 Folio 850.

• 7. Costs

• …’

4 The applicants had originally filed a fixed date claim form on 31 May 2012, and on that date they sought and obtained an interim injunction against the respondent, restraining it from selling the property. The interim injunction was renewed on several occasions. On 31 July 2012, the applicants filed an amended particulars of claim to which reference will be later made. On 5 September 2012, an inter partes hearing proceeded before Donald Mcintosh J who refused to grant the injunction. The applicants filed a notice of appeal against the order of Mcintosh J and subsequently sought to obtain an interim injunction pending the hearing of the appeal which was refused by the learned president.

5 The 1 ^st applicant submitted that the debt which the respondent has claimed as due and owing was obtained by fraud, fraudulent misrepresentation, extortion, undue influence and duress, and as a result the Restructure Agreement ought to be declared null and void or rescinded. It was also the applicants' contention that by unconscionable means the respondent had obtained an unjust enrichment.

6 It was also the 1 ^st applicant's submission that the respondent has advertised the property for sale without ‘validating, verifying or authenticating’ its claim of an indebtedness by the applicants. The respondent, having not verified, validated or authenticated the debt, has no legal right of sale as a mortgagee, he argued. The respondent, he contended, issued threats in forcing the applicants to sign the Restructure Agreement notwithstanding their protests that the debt was invalid.

7 He further contended that the respondent knew the debt was an unlawful penalty and that the debt was based upon a false claim by way of unlawful threats to sell, the respondent, being in considerable power, strength and influence over the indigent applicants. He cited the case of Financial Institutions Services Ltd v Negril Negril Holdings Ltd and Another [2004] GE WIR 227 in support of this submission.

8 The respondent, he argued, by reason of fraudulent misrepresentation, knowing that the debt was false, issued false statements of account and failed to provide the applicants with relevant information concerning the account. It was further argued that the respondent by use of unlawful coercive powers seeks to enforce the unlawful debt.

9 He contended that on 28 February 2012, he attended a meeting with the respondent, at which time he was shown three returned cheques, a mortgage document and other documentation. He raised certain questions with respect to the documents but the response he received was highly unsatisfactory.

10 The property, he argued, although originally zoned as agricultural land, was re-zoned in 1995 as residential; a subdivision approval was obtained in December 2010 and an appraisal report placing the valuation of the property at US$25,000,000.00 was done. The respondent, in late 2011, secured a valuation of the land describing it as farm land despite the 1 ^st applicant informing it that a subdivision approval had been obtained. Despite this, he submitted, the property was advertised for sale for US$900,000.00.

11 There are serious issues to be tried, he submitted, and an injunction should be granted. The respondent, he contended, is foreign-based and could depart from the island at any time and this would preclude the applicants from recovering damages from it.

12 Mrs Minott Phillips QC submitted that there are no serious issues to be tried in the applicants' claim. Their claim for rescission of the Restructure Agreement or that it be declared null and void must fail as the claim in these matters could only be based on allegations of fraudulent misrepresentation or fraud on the part of the respondent, and no allegations of fraudulent misrepresentation were set out in the amended particulars of claim, nor was fraud alleged or particularized.

13 The Restructure Agreement does not give the respondent a legal charge over the property as claimed by the applicants, she argued, as the respondent's interest is derived from the mortgages which were transferred to it. The transfers were registered on the certificate of title on 13 June 2003. Further, she argued, the applicants agreed to the Restructure Agreement and the respondent was entitled to exercise its rights under the security which were enforceable at the time of the agreement.

14 The complaint of undue influence has not been pleaded and further there is no special relationship between the applicants and the respondent giving rise to such claim, she submitted. Nor could any claim in respect of economic duress arise, as it was lawful for the respondent to compromise the debt, demand its repayment and exercise its powers of sale, she further submitted.

15 The allegations made by the applicants against the respondent as being unjust and unconscionable, were against the background of the history of the applicants' relationship with NCB, which does not arise in this case as the respondent was the bona fide purchaser for value of the receivables from Refin Trust. Its title could only be challenged by fraud and there being no evidence of fraud, it cannot be vitiated, counsel submitted.

16 Referring to the question of damages, it was her submission that where a mortgagee sells at an undervalue, he is liable for the difference between the market value and the sale price, and in keeping with section 106 of the Registration of Titles Act, damages are the only, and not merely an adequate remedy in such circumstances.

17 The court is clothed with unfettered power to grant injunctive relief. However, this power is discretionary. It follows therefore, that the grant of an injunction is not a remedy to which an applicant is entitled as of right. An applicant, seeking the grant of an injunction, must show that his case is deserving of favourable consideration by the court.

18 In giving consideration to an application for an injunction, the general principles by which the courts are guided have been laid down by Lord Diplock in American Cyanamid Co v Ethicon [1975] AC 396. These principles can be briefly stated as follows: firstly, the court must be satisfied that there is a serious issue to be tried and in the absence of a triable issue, an injunction should not be granted; secondly, although there may be a serious issue to be tried, if damages are an adequate remedy, an injunction should...