Millard Dunbar v St. Catherine Co-Operative Credit Union Ltd

• Jurisdiction: Jamaica
• Judge: Laing, J
• Judgment Date: 18 January 2018
• Court: Supreme Court (Jamaica)
• Docket Number: CLAIM NO. 2016CD00058
• Date: 18 January 2018

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN THE COMMERCIAL DIVISION

Laing, J

CLAIM NO. 2016CD00058

Millard Dunbar

Claimant

and

St Catherine Co-Operative Credit Union Ltd

Defendant

IN OPEN COURT

Mr Carlton Williams and Mr Mark Williams instructed by Williams, McKoy & Palmer, Attorneys-at-Law for the Claimant

Mr Dennis Richards and Mrs Sherene Richards instructed by Richards & Richards, Attorneys-at-Law for the Defendant.

Mortgage — Foreclosure — Whether notice of foreclosure sent by registered letter must actually be received by the addressee for the service to be valid Contract — Formation — Agreement to negotiate — Whether binding contract Unjust enrichment — Whether proper exercise of right to foreclose can amount to unjust enrichment

The Claim

1 The Claimant, Millard Dunbar was the proprietor of property located at Lot 19 Twickenham Park, in the parish of St. Catherine, registered at Volume 1197, Folio 364 of the Register Book of Titles (‘the Property”). The Defendant, St. Catherine Co-operative Credit Union Limited is a registered company incorporated under the laws of Jamaica with registered offices at 13 White Church Street, Spanish Town in the parish of Saint Catherine. The Defendant has exercised its rights of foreclosure in respect of the Property and as a consequence of that action the Claimant has filed this Claim.

2 The Claimant is seeking, inter alia, the following relief in respect of the Property (referred to in the pleadings as the premises):

“An order that the Claimant is entitled to possession of the premises and that the notice to quit served upon the Claimant is null and void.

An order that upon the payment of the sum of Four Million, Seven Hundred and Thirty-five Thousand One Hundred and Seventy-three Dollars and Three Cents ($4,735,173.03) the Defendant shall discharge the mortgage and return the Certificate of Title registered at Volume 1197 Folio 364 to the Claimant, for that:

• i. The Defendant was in breach of its fiduciary duties and/or statutory duties for that proper and/or adequate relevant notices were not duly served upon the Claimant inter alia;

• ii. The Defendant was in breach of contract by invoking foreclosure proceedings in the circumstances and/or;

• iii. The retention or ownership and possession of the premises by the Defendant in the circumstances is inequitable and an act of unjust enrichment at the expense of the Claimant.

And/or alternatively, an order that the Defendant's action was tantamount to fraud in obtaining by deception to the benefit of a foreclosure by falsely claiming to have complied with section 119 of the Registration of Titles Act, and that the original title be reissued.”

The background

3 The Claimant on the 29 ^th day of May 2009 mortgaged the Property to the Defendant, pursuant to an instrument of mortgage, bearing mortgage No. 1593770 (“the Mortgage”) as security for a loan in the sum of Three Million Dollars ($3,000,000.00). Under the terms of the Mortgage, the Claimant was required to pay the sum of Eighty Thousand Dollars ($80,000.00) on a monthly basis. The Claimant subsequently defaulted on his payments to the Defendant.

4 The Defendant thereafter caused two notices of sale to be issued to the Claimant and the Property was put up for public auction by Douglas Property Rentals & Auctioneering Services Ltd. The Certificate of Auctioneer dated 1st May 2014 confirms that on the day of the auction, no offer was made. A notice of foreclosure was subsequently issued by Richards & Richards, the Defendant's Attorneys-at-Law, dated the 9 ^th day of September 2014, (the “Notice of Foreclosure”) and sent by registered post, addressed to the Claimant at Keith Hall District, Bog Walk Post Office, St Catherine.

5 The Claimant stated that he could not recall receiving a notice of sale and asserted that the Notice of Foreclosure was never received by him at Keith Hall District. As a consequence he said that he was unaware of the Defendant's intention to proceed by way of foreclosure. The Defendant did not successfully refute the evidence of the Claimant that he did not receive the Notice of Foreclosure. Most importantly, there was no challenge to the contents of the letter of the Postmistress of Bog Walk Post Office, addressed to Counsel for the Claimant, in which it was confirmed that the registered article for the Claimant which was received by the Post Office on the 15 ^th September 2014 was in fact returned from the Post Office to the offices of Richards & Richards on the 22nd day of October 2014.

6 The Claimant proceeded to file an application for foreclosure of mortgage dated 6 ^th May 2015 with the Registrar of Titles pursuant to section 119 of the Registration of Titles Act (“RTA”). The Application was supported by a Statutory Declaration by Janice Green, the Secretary of the Board of Directors of the Defendant, in which she declared that notice had been given to the Claimant (the Mortgagor) of the Defendant's intention to apply for a foreclosure order “ by registered letter addressed to the Mortgagor and a copy of this Notice and the Post Office receipt for the same are exhibited to the Statutory Declaration lodged herein”

7 The Registrar of Titles having been satisfied that the provisions of section 119 of the RTA had been complied with, in accordance with the provisions of section 120 of the RTA, issued an Order for Foreclosure to the Defendant in respect of the Property on the 15 ^th day of July 2015.

8 The Claimant has asserted that there was non-compliance with section 119 of the RTA because he was not served with the Notice of Foreclosure and accordingly the Order for Foreclosure ought not to have been granted. He has also asserted that the foreclosure by the Defendant was fraudulent. It was submitted on his behalf that the declaration that was made to the Registrar of Titles that the Notice of Foreclosure was served on him by registered post, is tantamount to fraud, in obtaining by deception, the benefit of a foreclosure order, by falsely claiming to have complied with section 119 of the RTA

9 Another ground submitted on behalf of the Claimant as to why the Order for Foreclosure should be set aside, is based on his assertion that at all material times he was in negotiations with the Defendant as to how best to offset his obligations to it and that representatives employed to the Defendant had given him their undertaking not to foreclose on the Property. Based on this undertaking, he asserted that the Defendant's actions in foreclosing on the Property was in breach of the policy of the Defendant and/or the agreement between the parties and/or the expectation held out by the Defendant to the Claimant and/or its statutory and fiduciary duties to him.

The Issue of service

10 It is the Defendant's case that it exercised their right of foreclosure and that on the 15 ^th day of September 2014 they issued the Notice of Foreclosure to the Claimant in compliance with section 119 of the RTA, which states as follows:

“119. Whenever default has been made in payment of the principal or interest money secured by a mortgage and such default shall be continued for six months after the time for payment mentioned in the mortgage, the mortgagee or his transferee may make application in writing to the Registrar for an order for foreclosure; and such application shall state that such default has been made and has continued for the period aforesaid, and that the land mortgaged has been offered for sale at public auction by a licensed auctioneer after notice of sale served as hereinbefore provided, and that the amount of the highest ‘bidding at such sale was not sufficient to satisfy the moneys secured by such mortgage, together with the expenses occasioned by such sale, and that notice in writing of the intention of the mortgagee or his transferee to make an application for foreclosure has been served on the mortgagor or his transferee, by being given to him or them, or by being left on the mortgaged land, or by the same being sent through the post office by a registered letter directed to him or them at his or their address appearing in the Register Book, and also that a like notice of such intention has been served on every person appearing by the Register Book to have any right, estate or interest, to or in the mortgaged land subsequently to such mortgage, by being given to him or sent through the post office by a registered letter directed to him at his address appearing in the Register Book”.

11 The sole witness on behalf of the Defendant was Mrs Patricia Williams-Coore, who is the Recovery Officer of the Defendant. Her evidence was that letters to its members such as the Claimant are usually sent to the main address which the member submitted on the member's application and if they had any other address for the member the letters would be sent to that address as well. She confirmed that as far as the Claimant was concerned, the Defendant had an address for him at Lot 13 St Jago Meadows, St Catherine PO and Shops 5 & 6 Spanish Village, Spanish Town, St Catherine.

12 The Claimant's evidence was that his home address is Keith Hall, Bog Walk, St. Catherine, which is also his address as reflected on the certificate of title in respect of the Property, but he said that he does not take his mail at that address. He asserted that he only sleeps at Bog Walk because he leaves early in the mornings to take his children to school and returns late at night.

The submissions on behalf of the Claimant on the issue of service

13 In support of the argument that because the Notice of Foreclosure which was sent by registered mail was not actually received and therefore did not satisfy section 119 0f the RTA. Counsel for the Claimant relied on the case of Beer v. Davies 1958 2 All ER 255. In that case the respondent was involved in a motor vehicle accident and notice of...