Pauline Holness v Aughuton Grant

• Jurisdiction: Jamaica
• Judge: Mcdonald-Bishop JA,D Fraser JA,V Harris JA
• Judgment Date: 20 December 2022
• Neutral Citation: JM 2022 CA 130
• Docket Number: SUPREME COURT CIVIL APPEAL NO 108/2018
• Court: Court of Appeal (Jamaica)
• Year: 2022

[2022] JMCA Civ 43

IN THE COURT OF APPEAL

BEFORE:

THE HON Mrs Justice Mcdonald-Bishop JA

THE HON Mr Justice D Fraser JA

THE HON Mrs Justice V Harris JA

SUPREME COURT CIVIL APPEAL NO 108/2018

Between

Pauline Holness

Appellant

and

Aughuton Grant

Respondent

Written submissions filed by Mrs Denise Senior-Smith instructed by Oswest Senior-Smith & Company for the appellant

Written submissions filed by Debayo Adedipe for the respondent

PROCEDURAL APPEAL

(Considered on paper by the court pursuant to rule 2.4(3) of the Court of Appeal Rules 2002)

Mcdonald-Bishop JA

1 I have read, in draft, the judgment of my learned brother, D Fraser JA, and agree with his reasoning and conclusion. I have nothing to add.

D Fraser JA

Introduction

2 This is a procedural appeal by the appellant Pauline Holness against the order of Wolfe-Reece J (Ag) (as she then was) (‘the learned judge’), made on 5 November 2018. By that order, the learned judge granted in part the application filed by the respondent Aughuton Grant, on 4 June 2018, for summary judgment in a claim brought by the appellant against him and ordered costs against the appellant.

3 The application for summary judgment was supported by the affidavit of Debayo A Adedipe, filed on 4 June 2018, to which was exhibited the affidavit of the respondent. In response to the application, the appellant relied on the affidavit of Olivia Derrett filed 14 June 2018, which referred to the amended claim form and the amended particulars of claim.

4 The claim, initially filed 8 June 2015 and amended 14 June 2018, sought the following reliefs:

• “1) A Declaration that the foreclosure agreement and the option agreement entered into by the [appellant] and the [respondent] in respect of ALL That Parcel of Land registered at Volume 1310 Folio 859 of the Register Book of Titles … were unconscionable bargains and are declared void;

• 2) Damages for Breach of Contract and/or fraudulent misrepresentation;

• 3) Damages for Unjust Enrichment and/or in the alternative;

• 4) Recovery of possession;

• 5) Costs;

• 6) Interest

• 7) Such further and/or other relief as this Honourable Court deems just”

5 Summary judgment was granted by the learned judge only in respect of the order seeking the declaration that the foreclosure agreement and lease and option to purchase agreements entered into between the appellant and the respondent were unconscionable bargains and void. The application for summary judgment was refused in respect of the claim for breach of contract. Costs were also awarded to the respondent and Victoria Mutual Building Society (‘VMBS’) which was then an interested party. Leave to appeal was granted. Notice of appeal was filed 13 November 2018 in respect of the learned judge's order granting summary judgment and costs against the appellant.

6 The appellant has since, by notice dated 15 July 2021, wholly withdrawn this matter against VMBS. This was subsequent to the acknowledgement by Munroe & Munroe, Attorneys-at-Law for VMBS, by letter dated 7 May 2019 to the Registrar of the Supreme Court that the appellant had paid the mortgage sums due to VMBS.

The relevant facts

7 The appellant and the respondent were childhood friends who are both from Norfolk District in the parish of Saint Elizabeth, where the property the focus of the dispute is situated (‘the property’). The appellant maintains that some time before she entered into dealings with the respondent concerning the property, she had helped him when he had foreclosure problems in New York City. She further maintains that he had told her then that if she ever found herself in a ‘financial situation’ he would be happy to help her, because of that and other kindnesses she had shown to him. The respondent denies that he received assistance from the complainant for foreclosure problems. Instead, he asserted that the assistance she had provided was when he had been awaiting disability payments. What is clear, however, is, that, at some time prior to the entry into the agreements sought to be impugned, the appellant had provided assistance to the respondent.

8 The appellant had been sole proprietor of the property subject to a mortgage from First Caribbean International Building Society. She was in financial difficulty, and her mortgage payments were in arrears. She faced the prospect of her property being sold by the mortgagee.

9 The appellant and the respondent entered into a foreclosure agreement dated 3 October 2008, whereby i) he would take over the mortgage debt of $12,810,759.65 with a daily accrued sum of $4,289.94; ii) he would take a transfer of the property; iii) she would refund the respondent the sum of $3,600,000.00 by paying $100,000.00 per month for three years on the first day of the month commencing 1 November 2008; and iv) she would be entitled to 40% of the net proceeds in the event of a sale. The agreement also contained a clause that if the monthly payments were delayed by more than 10 days, the agreement would be treated as terminated without the need for there to be any demand notice.

10 It should be noted that the appellant maintains that the original agreement between the parties was that she would have been entitled to 60% of the net proceeds in the event of a sale, but the respondent reneged on that position. Nevertheless, she went ahead with the agreement as she had no other option. The respondent, on the other hand, maintains that it was after negotiations that the appellant's share of any sale proceeds was increased from 25% to 40%. The property was accordingly transferred to the respondent.

11 The appellant was unable to keep up with the stipulated payments, and the foreclosure agreement was replaced by lease and option to purchase agreements. The signed agreements refer to the year 2012, but no date is inserted in either. They were prepared, and the signatures of both parties on them witnessed by Mr Wilwood Adams, attorney-at-law. Though the year 2012 is on both agreements, the parties agree that the appellant took possession of the property pursuant to the agreements, on 1 October 2011. The terms of these agreements included that the appellant was to take possession of the main part of the premises, make stipulated payments and, on completion, the property would be transferred back to her. In particular, the payment terms of the option to purchase were that the purchase price was $29,600,000.00 or US$356,000.00, and was payable as follows:

• a) A monthly payment of $2,409.64 (presumably referring to United States dollars) or its Jamaican equivalent to Victoria Mutual Building Society;

• b) US$1,200.00 (presumably per month) or its Jamaican dollar equivalent from 15 January 2012 to 15 December 2012 and, as of 15 January 2013, US$3000.00 per month to 15 September 2015; and

• c) A final payment of US$118,564.00.

12 It was also stated in the option to purchase that completion was on or before 50 months from the date of the agreement and that if the appellant defaulted on the payments set out in clauses (a) and (b), after one month, the respondent reserved the right to terminate the option to purchase and cancel the lease agreement.

13 By letter dated 16 March 2015 from Clarke, Nembhard & Co, attorneys-at-Law acting on behalf of the respondent, the appellant was advised that due to her having, “consistently failed to make the required payments…notwithstanding repeated requests by [the respondent] for you to regularize your payments.the option to purchase agreement between [the respondent] and yourself is hereby terminated.”. The letter went on to advise the appellant that she was required to vacate the property on or before 15 May 2015. That letter led the appellant to file the claim.

14 In the amended particulars of claim filed on 14 June 2018, the appellant alleged that the option to purchase and lease agreements were prepared without any considered consultative involvement from her or any meeting with the respondent. She also complained that she was not told to seek independent legal advice and was desperate to get back her home.

15 The particulars of breach, unfairness, unconscionability and/or unjust enrichment of the respondent set out in the amended particulars of claim are as follows:

• “i. Terminating the Option to Purchase albeit the time period for completion has not elapsed;

• ii. Terminating the Option to Purchase without giving reasonable notice;

• iii. Terminating the Option to Purchase when the delay in payment ought not to give the [respondent] a right to discharge the contract;

• iv. Being unjustly enriched in that the [respondent] would have been compensated substantially for the property and no provision has been made for the return of same to the appellant;

• v. Being unjustly enriched in that the [respondent] would have benefitted from the substantial improvements to the property to the [appellant's] detriment;

• vi. Compelling the [appellant] to agree to terms in the Option to Purchase that were manifestly disadvantageous to her;

• vii Causing the [appellant] to be purchasing the property from him and at the same time paying the mortgage

• viii. Fraudulently misrepresenting to the [appellant] the sum of the mortgage payments and monies used to pay of [sic] the Claimant's [sic] mortgage”

16 The appellant also outlined in those amended particulars that since her engagement with the respondent over the property, she had made payments of $15,880,000.00 to VMBS; US$100,000.00 to the respondent and expended $3,575,000.00 on refurbishments to the property.

17 The respondent filed a defence and counterclaim on 13 October 2015 in which he admitted the execution of the foreclosure agreement and the lease and option to purchase agreements that replaced the foreclosure agreement. He stated that the parties attended on and instructed Mr Wilwood Adams to prepare the lease and option agreements. He asserted that the...