Jolanes Investments Ltd v Sagicor Life Jamaica Ltd

• Jurisdiction: Jamaica
• Judge: Jarrett, J
• Judgment Date: 21 July 2023
• Court: Supreme Court (Jamaica)
• Year: 2023
• Docket Number: CLAIM NO. 2008HCV05958

Between

Jolanes Investments Limited

Claimant

and

Sagicor Life Jamaica Ltd (Formerly Life of Jamaica Limited)

Defendant

[2023] JMSC Civ 127

CORAM:

Jarrett, J

CLAIM NO. 2008HCV05958

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

CIVIL DIVISION

Adequacy of claimant's pleadings — application to amend statement of case — defendant requesting that claimant's statement of case be struck out — registered mortgage and the effect of foreclosure on the equity of redemption — sections 119 and 120 of the Registration of Titles Act

Mr. Garth McBean KC, instructed by Garth McBean & Co for the claimant

Mr Conrad George and Mr Andre Sheckleford instructed by Hart, Muirhead Fatta for the defendant

Introduction

1 This is my decision on 8 preliminary points made by the defendant at the start of trial, and on the claimant's oral application to amend its statement of case. All 8 preliminary points allege deficiencies in the claimant's pleadings.

2 In its claim form filed on December 19, 2008, the claimant pleads that it seeks against the defendant: a) an injunction restraining it, its agents or servants from selling or taking steps to sell its property at Apartment 22 Sea Castles, in St James registered at volume 1244 Folio 266 of the Register Book of Titles (the property); b) damages for breach of contract; c) interest and costs; all arising from a breach of an agreement made in September 2004, with the defendant, through its agent Business Recovery Services Limited (“BRSL”). The claimant alleges that the breach resulted in the defendant wrongfully taking steps to exercise a power of sale under a mortgage dated April 27, 1991, made between the claimant and American Life Insurance Company (“ALICO”).

3 As part of its response to the preliminary points, the claimant made an oral application to amend its statement of case. The defendant did not seek to have the claimant's statement of case struck out when arguments were first advanced in support of the preliminary points. It was after submissions were made in response to the preliminary points; after the claimant's application to amend the claim and, after a draft of the proposed amended particulars of claim was produced, following an adjournment to facilitate its preparation, that the defendant objected to the amendments and asked that the claim be struck out.

4 Just before the scheduled delivery of my decision on these issues, the defendant asked that consideration be given to further submissions. The further submissions, both oral and written, were in respect of the effect of foreclosure of the mortgage on the claimant's equity of redemption under the Registration of Titles Act (ROTA), and ultimately on the viability of the claim. Time was given to the claimant to make written and oral submissions in response.

The particulars of claim

5 A brief outline of the particulars of claim will aid in understanding the preliminary points, the proposed amendments sought by the claimant, and the effects, if any, of the foreclosure, on the proposed amended claim.

6 The claimant's current particulars of claim are the Amended Particulars of Claim filed on August 8, 2011 1. In summary, the relevant pleadings are that:

• a) The claimant by instrument of mortgage dated April 27, 1991, mortgaged the property to ALICO as security for a loan of $750,000.00.

• b) The defendant is the successor to Life of Jamaica Limited (LOJ).

• c) There was no assignment of the mortgage on the certificate of title for the property.

• d) The claimant entered into an agreement with BRSL as agents for the defendant, to pay the sum of $824,845.95, towards settling the principal on the mortgage in two instalments, and thereafter to negotiate and agree the timely payment of interest.

• e) The sum of $824,845.95 was paid by way of two cheques, however the defendant applied the amount paid towards interest rather than towards principal and said it did not agree to apply it to principal.

• f) The defendant is estopped from breaching its promise.

• g) The defendant advertised the property for sale by public auction and in threatening to exercise its power of sale, acted unlawfully as there was no assignment of the mortgage. The defendant is not a mortgagee or assignee under the mortgage.

• h) There was an implied term in the mortgage that when requested, the defendant would account to the claimant, showing how money paid under the mortgage was applied to principal and interest.

• i) The claimant has requested an account, but the defendant has wrongfully failed or refused to render the account.

• j) The claimant has incurred expenses and suffered loss and damage and seeks an injunction retraining the defendant from selling the property, an account of money paid under the mortgage and, an “ order for the payment by the defendant to the claimant of all monies found to be due to it on the taking of (sic) successful (sic)”; damages for breach of contract; interest and costs.

The preliminary points

7 According to Mr Conrad George, counsel for the defendant, the pleadings are defective and pose an “insuperable problem to determine what evidence should be led”. Learned counsel made the following preliminary points:

• a) The claimant's third item of relief prayed: “An order for the payment by the defendant to the claimant of all monies found to be due to it on the taking of successful (sic)” is incomprehensible and not tied to any cause of action in the pleading.

• b) The claimant has pleaded a breach of an implied term without any pleading as to the genesis or basis of such an implied term.

• c) The claimant has pleaded a breach of an implied term in the context of a security document created by deed, this being a circumstance where the principle of implied terms is not applicable.

• d) The only pleading to which the fourth item of relief sought: “Damages for breach of contract” may be tied is a breach of an implied term to provide an account. For the reasons expressed at (2) and (3) above, the relief sought of damages for breach of contract has no basis.

• e) In light of: a) the relief prayed at (2) (“An account of the monies paid by the claimant to the defendant under the said mortgage”) being founded on defective pleadings of an implied term; b) the incomprehensible item of relief prayed at (3) (“An order for the payment by the defendant to the claimant of all monies found to be due to it on the taking of successful”) and its lack of connection to any cause of action; c) the relief prayed at (4) (“Damages for breach of contract”) is only capable of being tied to the claim of a failure to provide an account, which is founded on a defective pleading of an implied term; there is no relief for the claimant to pursue against the defendant.

• f) The claimant's claim that there was a pending improper exercise of the power of sale as there was no assignment of the mortgage from the initial mortgagee (“ALICO”) to the defendant's predecessor company (“LOJ”) (paras 18-19 of the Amended Particulars of Claim) is not tied to any item of relevant relief sought.

• g) With respect to the claimant's pleading of an estoppel (para 13 of the Amended Particulars of Claim), promissory estoppel operates as a shield, not a sword, and therefore may only be invoked as a defence.

• h) The claimant's pleading of an estoppel is not tied to any item of relief sought.

8 Mr George questioned why the claimant would be seeking an account when it pleads that the defendant was not a mortgagee. He argued that for a term to be implied, it needed to be a part of a contract and there are established criteria in law for implying terms into a contract. He relied on the dictum of Lord Hoffman in Attorney General for Belize and others v Belize Telecom and others [2009] UKPC 10. Counsel submitted that the mortgage pleaded is a security for a loan but there are no allegations pleaded to support any implied terms. Furthermore, the claimant has pleaded that the defendant is not a mortgagee. Accordingly, argued counsel, the claimant cannot claim damages for the breach of a term, the implication of which has not been properly pleaded. Learned counsel further argued that as there is no pleading that the property was sold, a case cannot be advanced of an improper exercise of a power of sale.

9 Mr George also argued that the claimant's acceptance that there was foreclosure, brings into focus its effect on the proposed amended claim 2. He relied on sections 119 and 120 of the ROTA to submit that foreclosure results in the equity of redemption being extinguished, and it is only capable of being reopened in limited circumstances, including cases of fraud. None of those circumstances arise on the pleadings or on the proposed amended pleadings in this case, posited counsel. The dictum of Laing J (as he then was) in Millard Dunbar v St Catherine Co-operative Credit Union [2018] JMCC Comm 7 at para. 38, and St Catherine Co-operative Credit Union Limited v Herman Rhule and others, [2018] JMMC Comm 12, at para 14, were cited in support of this submission. The effect of the equity of redemption being extinguished, posited Mr George, is that there is no basis on which the claimant can sustain a claim for an account from the defendant, once there was no challenge to the foreclosure. He argued that with the equity of redemption being extinguished, the claimant has no equitable interest upon which

to base his claim for an account on equitable principles. It was argued that the claim for breach of contract is also unsustainable for the same reasons. Consequently, the claim should be struck out

The claimant's response

10 King's Counsel Mr Garth McBean submitted that paragraphs 5 to 17 of the claimant's pleadings provide a basis on which the court can order an account. He relied on the decision of JMMB Bank (Jamaica) Limited (Formerly JMMB Merchant Bank Limited) v Winston Finzi and Mahoe Bay Company Limited [2021] JMCA...