National Commercial Bank Jamaica Ltd v White Locke

• Jurisdiction: Jamaica
• Court: Court of Appeal (Jamaica)
• Judge: Kerr, P.,Campbell, J.A.
• Judgment Date: 30 July 1982
• Neutral Citation: JM 1982 CA 35
• Docket Number: Civil Appeal No. 67 of 1981
• Date: 30 July 1982

Court of Appeal

Kerr, P. (Ag.) Campbell, J.A., Wright, J.A.,

Civil Appeal No. 67 of 1981

National Commercial Bank Jamaica Ltd.

and

White Locke

Appearances:

Dr. L.G. Barnett instructed by Milholland, Ashemheim & Stone for the appellant.

Mr. W.B. Frankson, Q.C. and Mrs. M. Forte for the respondent.

Injunction - Interlocutory injunction — Principles governing grant

Facts: Respondent unencumbrated real estates were transferred to the third defendant. Purchase price unpaid. Real estates mortgaged to appellant within a year of transfer. Within less than a year of granting the loan the appellant sought to call in the mortgage. Third defendant had no funds with which to repay. No evidence of acquisition of property by the third defendant by way of utilization of the advance. Alleged that appellant took possession of respondent's herd of cattle. Respondent obtained order restraining appellant from disposing of or in any way dealing with the properties.

Held: Appeal dismissed. Maintenance of statue quo followed.

1 Kerr, P. (Ag.): I have had the benefit of reading the draft judgment of Campbell, J. A. (Ag.) in which he has comprehensively reviewed the rival contentions of the attorneys on either side and identified the important issues to be tried.

2 I am of the view that the learned judge was correct in applying the liberal test advocated by Lord Diplock in American Cyanamid v. Ethicon [1975] 1 All E.R. 504.

3 Accordingly, it is enough that there are serious issues to be tried and complex questions of law to be determined and having regard to the factors set forth in the plaintiff's affidavit and to the fact that if the appellant was to succeed it would be adequately compensated under the plaintiff's undertaking. I am in agreement with Campbell, J.A. (Ag.) that the status quo should be maintained.

4 I would dismiss the appeal.

5 Campbell, J.A. (Ag.): The respondent by her Writ in Suit C.L. W. 166 of 1981 sought certain declarations and consequential reliefs against three defendants namely, Horace Cuthbert, the appellant and Bluefields Properties Limited.

6 As regards Horace Cuthbert and Bluefields Properties Limited, the first and third defendants, the declarations sought in substance are that:

• (i) All the property real and personal which are vested in them or either of them including two parcels of land being part of Bluefields in the parish of Westmoreland registered at Volume 998 Folios 55 and 57 of the Register Book of Titles and a herd of Holstein cattle are held in trust for the respondent.

• (ii) The first defendant has fraudulently, unlawfully and wrongfully procured a mortgage and or charge over the properties registered at Volume 998 Folios 55 and 57 in favour of the appellant. This mortgage and/or charge is fraudulent, ultra vires the third defendant, illegal and void.

7 As regards the appellant the declarations sought are in substance that:

• (i) It knew or ought to have known that in dealing with the first and/or third defendant, it was facilitating breaches of trust by them.

• (ii) It acted unlawfully and wrongfully in obtaining a mortgage and/or charge over the properties registered at Volume 998 Folios 55 and 57 because it knew or ought to have known that the first defendant was acting fraudulently and in breach of trust also that the transaction was ultra vires the third defendant and so was illegal and void.

• (iii) It acted wrongfully and unlawfully in removing and possessing itself of the respondent's herd of Holstein cattle as this item of property was free of all charges and/or encumbrances.

• (iv) It acted negligently in advancing the sums of J$411,000.00, and J$199,000.00 to the first and/or third defendant without ascertaining that the said advances were properly authorised by the third defendant. The borrowings were ultra vires the said third defendant.

8 The respondent alleged that the appellant intended, unless restrained, to sell or otherwise dispose of the lands as well as the herd of cattle. She accordingly in addition to seeking an order that the assets held by the third defendant be transferred to her and the mortgage held by the appellant be discharged, asked for an order restraining the appellant from disposing of or in any way dealing with the aforesaid properties until the hearing of the action.

9 The respondent after issuing her Writ took out a summons for an interim injunction against all three defendants to restrain them from selling or otherwise disposing of the properties registered at Volume 998 Folios 55 and 57 or any other assets, goods or cattle.

10 The affidavit in support of the summons sets out the following alleged facts summarised for conciseness:

• (i) Dorothy Whitelocke a widow aged 71 years was up to about May, 1979, the sole registered proprietor of unencumbered estates in fee in lands at Bluefields, Westmoreland at Volume 998 Folios 55 and 57. She acquired the lands by devise, under the will of her late husband Roland Whitelocke deceased. She in addition had other properties real and personal including a herd of Holstein cattle.

• (ii) In or about February, 1980, the first defendant Horace Cuthbert fraudulently induced her:

  • (a) to enter into a management agreement dated 8th February, 1980, appointing him manager of all her real and leasehold estate including the lands registered in Volume 998 Folios 55 and 57 also a property known as ‘Oristano’ in Westmoreland;

  • (b) to appoint him her attorney in the island of Jamaica;

  • (c) to incorporate Bluefields Properties Limited (the third defendant) with a share capital of $1,000.00 with him as the single, largest shareholder having 499 shares of $1 each in respect of which he has paid nothing and with him as Chairman and Managing Director;

  • (d) to transfer to the said company, the properties registered at Volume 998 Folios 55 and 57;

• (iii) Influenced by these fraudulent inducement she complied and inter alia instructed Messrs. Coke and Coke Attorneys-at-Law to have the company incorporated. To this company was transferred by registered transfer the aforesaid properties for a recited total purchase price of $101,542. 00 no part of which has paid to her. The company is accordingly a trustee for her holding these properties on a resulting trust for her.

• (iv) That in the light of the foregoing the first defendant Cuthbert is also a trustee for her of all of her other properties, goods, chattels, monies which came into his possession or under his control by virtue of the power of attorney and management agreement executed in his favour.

• (v) That the appellant at all material times knew or ought to have known that the first and third defendants were trustees for the respondent. Despite this knowledge it wrongfully and unlawfully took a mortgage or charge on the properties registered at Volume 998 Folios 55 and 57 to secure sums of $411,000.00 and $199,000.00 advanced by it to the first defendant and/or to the third defendant or one or other of them.

• (vi) That the appellant in March 1981 called in the mortgage which the third defendant was unable to pay in consequence of which the appellant unlawfully and wrongfully removed and converted the respondent's herd of cattle to its own use and benefit. She is informed and verily believes that the appellant intends selling the herd.

• (vii) That she is informed and verily believes that the appellant also intends selling, and has negotiated or is negotiating a sale of the properties registered at Volume 9980 Folios 55 and 57.

11 The summons came on for hearing in Chambers before Wolfe, J. on November 9, 1981. The appellant alone appeared in opposition thereto. Though the appellant appeared, it filed no affidavit in opposition. The record of proceedings is regrettably scanty. It however disclosed that the appellant apparently rested its opposition solely on the alleged vagueness of the allegations of fact in the affidavit. The record shows learned attorney for the appellant citing Wallingford v. Mutual Society (1880) H.L.(E) A.C. Vol. 5 page 685 in support of his submission that the allegations were vague. The references by him to statements in the speeches in that case of Lord Selbourne, Lord Hatherly and Lord Blackburn which in the above reference are at 697, 701 and 704 respectively show that learned attorney was referring to vagueness in relation to the allegations of fraud against the first defendant and was relying on the principle that an allegation of fraud which does not condescend upon particulars on which it is based must be disregarded by a court and if this is the sole basis on which the pleader or deponent relies in support of his claim to relief he must necessarily be denied relief.

12 The respondent at the hearing did not however appear to have relied on the aspect of fraud deponed to in the affidavit. The submission by learned attorney on her behalf is recorded, thus:

“Refers to endorsement on Writ. Refers to affidavit of Dorothy Whitelocke. Second defendant knew that first and third defendants held on trust for plaintiff. Second defendant had knowledge of relationship between plaintiff and first and third defendants when properties were mortgaged.

Paragraphs 13 and 14 of affidavits show that second defendant intends to dispose of plaintiff's properties. Contract entered into. Court has power to grant relief by section 461 of the Civil Procedure Code. Plaintiff will suffer injury if relief is denied. Damages not proper remedy in this case. Serious question to be tried.”

13 The learned trial judge in granting the order said:

“Court guided by principles in American Cyanamid Co. v. Ethicon [1975] 1 All E.R. 504. Order granted in terms of summons. Order granted in terms until the determination.”

14 The appellant appeals this order on the under mentioned grounds:

• “(i) There was no material before the learned judge to show that the plaintiff had any...