Millard Dunbar v Saint Catherine Co-Operative Credit Union Ltd

JurisdictionJamaica
JudgeBatts, J
Judgment Date31 July 2018
Neutral Citation[2018] JMCC COMM 27
Docket NumberCLAIM NO. 2016 CD 00058
CourtSupreme Court (Jamaica)
Date31 July 2018

[2018] JMCC COMM 27

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN THE COMMERCIAL DIVISION

Cor:

Batts, J

CLAIM NO. 2016 CD 00058

Between
Millard Dunbar
Claimant
and
Saint Catherine Co-Operative Credit Union Limited
Defendant

Mr. Carlton Williams of Williams Mckoy & Palmerfor Claimant

Mr. Denis Richards, Mrs Shereen Richards of Richards & Richardsfor the Defendant

Application for payment of money held as security — Injunction discharged — Whether undertaking as to damages implied — Whether damage or loss is to be set off against money held as security — Foreclosure — whether mortgagor entitled to refund of money held as security.

IN OPEN COURT
1

In this matter, having heard the evidence and considered the written and oral submissions, I reflected on the words of Shylock as he addressed the court in Shakespeare's famous work “The Merchant of Venice”:

“The pound of flesh which I demand of him is clearly bought, ‘tis mine and I will have it. If you deny me, fie upon your law! There is no force in the decrees of Venice. I stand for judgment: answer, shall I have it?”

2

In this case it is, not a pound of flesh but, $4,735,173.03 with interest which the Defendant demands. The circumstances are that the Claimant paid that amount into a joint interest bearing account (in the names of the attorneys representing the parties). The payment in was a condition of an order, for an interlocutory injunction, restraining the Defendant (mortgagee) until trial from selling the mortgaged property. At issue in the litigation was the question whether foreclosure, undertaken by the mortgagee, was lawful. The trial judge decided that it was. In consequence, judgment was entered for the Defendant (mortgagee) against the Claimant (mortgagor), see judgment of Laing J in this suit delivered on the 18 th January 2018 [2018] JMCC Comm 7.

3

The Defendant is now the registered proprietor of the property in question. It has commissioned valuations which indicate a market value of approximately $15,000,000, for the property, as at the date of foreclosure. The debt, for which foreclosure was effected, is $4,735,173.03. The Defendant, having foreclosed, is at liberty to sell the property and retain the entire net proceeds of sale. The Defendant is entitled to the benefit of any appreciation in value as well as any rental or profits earned since the date of foreclosure. This includes, of course, the period covered by the injunctive order.

4

The Defendant nevertheless, by Notice of Application filed on the 22 nd March 2018, urges this court to Order.

  • “1. That the Applicant is entitled to the sum of $4,736,173.03 and interest thereon which is held in the Fixed Deposit Account # 100-219-6387 at the King Street Branch of CIBC First Caribbean International Bank held in the name Williams McKoy and Palmer/Richards & Richards.

  • 2. That the Applicant is entitled to recover such sums for damages suffered as a consequence of the interim Order granted to the Respondent/Claimant by this Honourable Court on March 14 2016

  • 3. Costs of the application be costs to the Applicant.”

5

Mr. Williams, for the Claimant, at the commencement argued a preliminary point. He submitted that there was no basis for the application and that it should be struck out. This is because, when the injunction was granted, no undertaking as to damages had been ordered or requested by the court. The sum paid in, he submitted, was security for the debt owed. The intention being that, had the foreclosure been set aside, the Defendant would receive payment of the debt owed. If foreclosure was not set aside the money would be returned to the Claimant.

6

In response to the preliminary point Mr. Richards stated that an undertaking as to damages was contained in the Notice of Application for an injunction filed by the Claimant. It was in any event to be implied in the injunctive order. Furthermore, he submitted, the sum paid was held “until further order of the Court.” Therefore, he submitted, it was contemplated that payment out would take into account any loss or damage suffered by the Defendant in consequence of the injunction.

7

I dismissed the point in limine although I agreed with Mr Williams that there was no relevant or applicable undertaking as to damages. As it so happened I was the judge who made the injunctive order on the 14 th March 2016. There was no undertaking as to damages requested or given. There was however an order made that the amount owed should, as a condition of the grant of the injunction, be paid into a jointly held interest bearing account. In order to prevent the property being sold before the trial the Claimant met the condition imposed. The entire debt was therefore paid into an account jointly held by the respective attorneys “ to abide the outcome of this matter or further order”. It seems to me, and I so ruled, that before the sum can be ordered paid out it is a material consideration whether the Defendant has sustained loss or damage. I indicated to Mr. Richards that this application ought properly to have been made to the trial judge. Counsel indicated that the matter was mooted, when judgment was delivered, however Laing J suggested that a formal application be filed. This was done and the matter is now before me. My brother is, I understand, unavailable to hear it as he is on vacation. Having given my ruling on the preliminary point I commenced the hearing, to determine what was to become of the sums held in the joint account.

8

Mr. Richards indicated that he had an objection to the expert report filed by the Claimant. He submitted that the opinion of Mr. Alton Morgan, attorney at law, was irrelevant and could not assist the court on the issue to be determined. Mr. Williams, in reply, urged that the report was relevant. It was not only about the law but the practice as it relates to foreclosure and what obtains in relation to that. I decided to allow the evidence to be given insofar as it provides relevant material about the practice in the industry.

9

The Defendant's first witness was Ms. Patricia Williams-Burke. Her witness statement dated the 20 th May 2018 stood as her evidence in chief. She was allowed to amplify her evidence as contained in paragraphs 9 and 10. She deponed that for 2017 the average rate of interest was 14%. She describes the Defendant's rate of interest as the market rate. She asserted that competition among financial institutions determined the interest rate charged. Her witness statement said that she is credit manager of the Defendant Company. She gave a brief history of this litigation. It was her evidence that as a consequence of the interim injunction the Defendant was:

(5) …….. “obliged to cancel an ongoing 90 day transaction for sale of the relevant property for $15 million. The said 90 day transaction started on February 15, 2016 and was scheduled to end on May 15, 2016.”

The witness further stated that, after subtracting taxes, sales commission and legal fees, the Defendant would have enjoyed net proceeds of sale of $13,050,000.00. Those proceeds would have been applied to the business of lending in which the Defendant is engaged. They would be loaned out at a rate of 20%. It means the Defendant would have earned...

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