Neville Peralto v Cok Sodality Co-Operative Credit Union Ltd
| Jurisdiction | Jamaica |
| Judge | D. Fraser J |
| Judgment Date | 20 December 2017 |
| Neutral Citation | [2017] JMSC Civ 210 |
| Court | Supreme Court (Jamaica) |
| Docket Number | CLAIM NO. 2017HCV03295 |
| Date | 20 December 2017 |
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
CLAIM NO. 2017HCV03295
and
Rudolph E.A. Muir for the claimants
Georgia Gibson-Henlin Q.C. and Stephanie Williams instructed by Henlin Gibson Henlin for the defendant
Application for Prohibitory and Mandatory Injunctions — Ultimate test for grant — Court should adopt the course that will cause the least irremediable prejudice to one or other party — Adequacy of damages — Balance of convenience — No exceptional circumstances justifying departure from Marbella principle — Effect of delay on application for injunctive relief — Desirability of preserving status quo
The issue for this court's determination is whether or not injunctive relief should be granted to the claimants:
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(a) restraining the defendant, the mortgagee of the claimants' property from exercising powers of sale granted by the mortgage deed over the claimants' property, and/or taking any steps for the sale of the real property assets of the claimants on condition that an amount sufficient to satisfy the bona fide claims of the defendant mortgagee be paid into court by the claimants on or before January 15, 2018; and
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(b) requiring the defendant to:
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(i) produce the agreement for sale it has entered into with parties unknown;
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(ii) produce forthwith to the court the most recent valuation of the subject property;
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(iii) permit the sale of the property by the defendant or the claimants at the closest offer to the most recent market valuation;
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(iv) permit the sale of the property to purchasers identified by the claimant on condition that the full amount of the mortgage debt including interest be paid into court by the claimants; and
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(v) present to the court an up to date comprehensive accounting and reconciliation of all the principal, interest and other charges incurred on the claimants' mortgage loan account.
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The application of the claimants has been brought pursuant to part 17 of the Civil Procedure Rules 2002 (Revised at September 18, 2006) (CPR) which empowers the court to grant an Interim injunction [17.1 (1)]. Rule 17.2 (1) empowers the court to grant an interim remedy at any time, including before a claim has been made. In such a case Rule 17.2 (2) (b) permits the court to grant an order before a claim has been made if the matter is urgent or it is otherwise desirable to do so in the interests of justice.
The governing considerations that must be satisfied before an interlocutory injunction may be granted are those outlined by the House of Lords in American Cyanamid Co. v Ethicon [1975] 1 All ER 504 at pages 510–511. These are:
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(a) Whether there is a serious question to be tried.
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(b) Whether damages would be an adequate remedy for the applicant.
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(c) Whether the undertaking in damages is adequate protection for the respondent it being the overriding consideration on the Balance of Convenience
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(d) The balance of convenience.
I agree with the submission of counsel for the defendant that the test is applied in sequential stages and each factor stands on its own. Whether or not the court considers the next question depends on the answer to the last question. If the applicant fails at any stage there is no need to go to the next question.
The American Cyanamid principles were applied in the leading case in this jurisdiction of National Commercial Bank of Jamaica v Olint Corp Limited [2009] UKPC 16. In that case it was decided that an interlocutory injunction should only be granted if there was a serious question to be tried and the balance of convenience favoured the grant. If either condition is not satisfied, the injunction should be refused.
Importantly the case also established that what matters most is not whether an injunction is prohibitory or mandatory and therefore which of two different tests should be applied, i.e. “serious issue to be tried” in the case of a prohibitory injunction or “a high degree of assurance that at the trial it will appear that the injunction was rightly granted”, in the case of a mandatory injunction. The guiding principle was identified as being that the court should take whichever course appeared likely to cause the least irremediable prejudice to one party or the other.
It is common ground between the parties that the claimants are indebted to the defendant in respect of a mortgage taken out over the claimants' property to secure the loan advanced to the claimants by the defendants to purchase their property. There is some dispute as to the exact amount of the indebtedness as the claimants have asserted in the claim filed on the morning of the hearing of the application that there was a bridging loan mortgage which was later subsumed into the main mortgage that the defendant is still incorrectly claiming has been unsatisfied and remains undischarged. In effect the claimants allege breach of contract through double counting on the part of the defendant.
That dispute aside, which concerns about $4.65M, even if the claimants are correct in relation to that sum they would still be indebted to the defendant for at least in excess of $39M.
It is also undisputed that in or about July 2015 the claimants defaulted on their loan payments which default continues to today. The claimants have remained in possession of the property. The claimants have been trying to sell the property as have the defendants under their power of sale under the mortgage. The main angst of the claimants is that they claim the defendant has now negligently entered into an agreement to sell the property for $39M at a gross undervalue that is below the market value ($58–59M) and even the forced sale value of the property ($46.8M) as outlined in a valuation obtained by the claimants in October 2017. The prohibitory injunction they assert is necessary to prevent them being left exposed to continuing indebtedness and economic loss that would occur should the sale proceed as indicated.
As briefly outlined in the background facts, the claim which was filed over two months after the filing of the application for the injunctions on the morning of the hearing, alleges breach of contract in respect of a “bridging loan mortgage” and negligence regarding the value of the purchase price agreed for the sale of the subject property in relation to default on the “main mortgage”.
In respect of the negligence claim, the main thrust of the claimants' assertions is that apart from a very short period which was inadequate to allow for a purchaser to be identified and negotiations concluded, the defendant consistently advertised the property for sale at a significant undervalue. This practice operated to undercut the claimants'...
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Lorenz Redlefsen v Silver Sands Estates Ltd
...remedy. Reliance is placed on the dictum in the case of Neville Peralto and Another v COK Sodality Co- Operative Credit Union Ltd. [2017] JMSC Civ 210 and in particular paragraph 15 in which Fraser J (as he then was) stated the following: [15] As recognized in American Cyanamid most if not ......