Karin Murray v Brilliant Investments Ltd v Shurnette Davis (Representative of the Estate of Allan Davis), Brilliant Investments Ltd v Jennifer Messado
| Jurisdiction | Jamaica |
| Judge | A. Nembhard J |
| Judgment Date | 16 June 2022 |
| Court | Supreme Court (Jamaica) |
| Docket Number | CLAIM NO. SU 2019 CV 04678 |
IN THE MATTER OF an equitable mortgage on land registered at Volume 1051 Folio 48 of the Register Book of Titles
AND
IN THE MATTER OF the Registration of Titles Act
[2022] JMSC Civ 67
CLAIM NO. SU 2019 CV 04678
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
Mortgage — Equitable mortgage — Creation of an equitable mortgage — Monies owed — Agreement for land to be used as security for monies owed — Deposit of certificate of title in pursuance of agreement — No instrument of mortgage executed — Whether equitable mortgage in place — Whether deposit of title deed gives rise to presumption of charge
Company — Charge — Charge created by company — Deposit of title deed to secure debt owed by third party — Equitable charge — Deposit of title deed giving rise to presumption of charge — Whether deposit created a registrable charge or merely a lien on title deed — Whether charge created by company or arising by operation of law — Companies Act, sections 174 and 176, Registration of Titles Act, section 103, Civil Procedure Rules, 2002, rules 66.2 and 66.4
Mrs Symone Mayhew Q.C. instructed by Ms Carol Davis for the Claimant
Mesdames Keisha Spence and Zoya Edwards instructed by Zara Lewis & Company for the 1 st Defendant/Ancillary Claimant and the 2 nd Defendant
The Ancillary Defendant is unrepresented
This matter concerns the creation of an equitable mortgage and the circumstances in which an equitable mortgage might be created.
By way of a Fixed Date Claim Form, filed on 25 November 2019, the Claimant, Karin Murray, seeks the following Orders against the 1 st and 2 nd Defendants, Brilliant Investments Limited and Allan Davis, respectively: -
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(i) A Declaration that the Claimant holds an equitable mortgage in the sum of United States Dollars (USD$250,000.00), plus interest at the rate of seven percent (7%) per annum from 23 February 2018, on all that parcel of land, part of BENGAL in the parish of St. Ann and being the land comprised in Certificate of Title registered at Volume 1051 Folio 48 of the Register Book of Titles;
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(ii) An Injunction restraining the 1 st Defendant, its servants or agents from selling, charging, mortgaging or in any way whatsoever dealing with the property being the land comprised in Certificate of Title registered at Volume 1051 Folio 48 of the Register Book of Titles;
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(iii) An Order directing the Registrar of Titles to register the said mortgage on the Title to the land being the land comprised in Certificate of Title registered at Volume 1051 Folio 48 of the Register Book of Titles;
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(iv) That, in the event that the sum of United States Dollars (USD$250,000.00), plus interest at the rate of seven percent (7%) per annum from 23 February 2018, due to the Claimant, is not paid within sixty (60) days of the date herein, the Claimant be entitled to exercise a power of sale over the said land for the purpose of recovering the sum secured by the 1 st Defendant from the sale of the 1 st Defendant's share in the said land;
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(v) That any monies remaining after the payment of the sum due to the Claimant, from the proceeds of the sale of the said land, be paid to the Court;
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(vi) That the Claimant's Attorney-at-Law shall have carriage of sale of the said land; and
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(vii) Liberty to Apply.
At the beginning of the trial of the instant matter, it was indicated on behalf of Mrs Murray, that the Order sought at paragraph 2 of the Fixed Date Claim Form is no longer required.
The Claim raises several issues for the Court's determination. The central issues may be distilled in the following way: -
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(a) Whether an equitable mortgage was created over the land part of BENGAL, in the parish of St. Ann, being the land comprised in Certificate of Title registered at Volume 1051 Folio 48 of the Register Book of Titles; and
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(b) The appropriate interest rate to be applied should the Court find that an equitable mortgage was created.
In seeking to determine the central issues raised, the following sub-issues must also be resolved: -
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(a) Whether Ms Jennifer Braham had the authority to act on behalf of Brilliant Investments Limited;
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(b) Whether the actions of Ms Jennifer Braham bind Brilliant Investments Limited;
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(c) Whether, on a balance of probabilities, the evidence adduced on Mrs Murray's behalf is sufficient to establish the creation of an equitable mortgage; and
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(d) Whether the consent of Mr Allan Davis as the tenant-in-common is required for the creation of an equitable mortgage.
The Claimant, Mrs Karin Murray, contends that a debt is owed to her by the Ancillary Defendant, Mrs Jennifer Messado, in the sum of Five Hundred Thousand United States Dollars (USD$500,000.00).
Mrs Murray further contends that this debt has been acknowledged in writing by Mrs Messado and, in respect of which, an equitable mortgage has been created over the land, part of BENGAL, in the parish of St. Ann, being the land comprised in Certificate of Title registered at Volume 1051 Folio 48 of the Register Book of Titles (“the BENGAL property”).
The 1 st Defendant/Ancillary Claimant, Brilliant Investments Limited, is a limited liability company which was incorporated on or about 7 June 2005, under the laws of Jamaica, with its registered office at 15 Norwood Avenue, Kingston 5 (“Brilliant Investments”). The incorporation of Brilliant Investments was effected by Mrs Messado, who was at the material time an Attorney-at-Law, acting on the instructions of her then client, Mr Paul Morrison. 1
The 2 nd Defendant, Mr Allan Davis, together with Brilliant Investments are the registered proprietors of the BENGAL property. They hold the said land as tenants-in-common. 2
In or around February 2018, Mrs Messado acknowledged in writing, the debt owed by her to Mrs Murray, in the sum of Five Hundred Thousand United States Dollars (USD$500,000.00). As security for that debt, Mrs Messado delivered her Jamaican passport to Mrs Murray's Attorney-at-Law, Ms Carol Davis. 3
In or around February 2018, Mrs Messado requested the return of her passport in order that she might travel from the Island. Subsequent to that, on 23 February 2018, Ms Davis received a letter from Brilliant Investments that was written on its letter head, duly signed by its Directors and which bore its seal. That letter authorized Ms Davis to sell the BENGAL property. The proposal was further, that,
As security for the payment of that sum, Brilliant Investments also provided Ms Davis with the Duplicate Certificate of Title to the BENGAL property. 5
The Duplicate Certificate of Title was delivered to Ms Davis by Ms Jennifer Braham, a Director of Brilliant Investments and who was an employee of the firm Jennifer Messado & Company, Attorneys-at-Law, of which Mrs Messado was a Partner.
A mortgage may be both legal and equitable. It is a disposition of property as security for the repayment of a loan or discharge of an obligation. Generally, whenever a disposition of an estate or interest is originally intended as a security for money, whether this intention appears from the deed itself, from any other instrument or from oral evidence, it is considered as a mortgage and redeemable.
Where a claimant alleges that a mortgage has been created, a burden of proof is cast on him or her to prove his or her case on a balance of probabilities. This principle was enunciated by Sir Robert Megarry V-C in Re Alton Corporation, 6 at
page 33, paragraph b:-
“It must be for the party who sets up the existence of a mortgage to satisfy the court, on the civil standard of proof, that a mortgage has been created.”
In Miller v Minister of Pensions, 7 Denning J, speaking of the degree of cogency which evidence must reach in order that it may discharge the legal burden in a civil case, said: -
“That degree is well settled. It must carry a reasonable degree of probability but not so high as is required in a criminal case. If the evidence is such that the tribunal can say ‘we think it more probable than not’, the burden is discharged but if the probabilities are equal it is not.”
Section 103 of the Registration of Titles Act (“the ROTA”) provides that the proprietor of land may mortgage same by signing a mortgage in a form authorized by one of three specified Schedules of the ROTA. Unlike a mortgage of land which does not fall under the operation of 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 a mortgagee, in that it is 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 determined is, what is the effect that that document has, if any at all.
There can be 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
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