Premium Investments Ltd ((in Liquidation)) v Jamaican Redevelopment Foundation Inc.
Jurisdiction | Jamaica |
Judge | SYKES J. |
Judgment Date | 11 June 2008 |
Judgment citation (vLex) | [2008] 6 JJC 1103 |
Date | 11 June 2008 |
Court | Supreme Court (Jamaica) |
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
CIVIL DIVISION
JUDGMENT IN DEFAULT OF DEFENCE - EXTENSION OF TIME WITHIN WHICH TO FILE DEFENCE - RULES 10.3 (9), 26. 1 (2) (C) AND 26.8 OF THE CIVIL PROCEDURE RULES - RESTRAINING MORTGAGEE'S POWER OF SALE - INJUNCTION - MARBELLA PRINCIPLE - RESTRICTION ON MARBELLA PRINCIPLE - SECTION 33 OF THE LIMITATION OF ACTIONS ACT - WHETHER LIQUIDATOR CAN ACKNOWLEDGE DEBT WHICH MAY BE STATUTE BARRED ON BEHALF OF COMPANY - WHETHER DIRECTOR'S SIGNATURE ON FINANCIAL STATEMENTS IS ACKNOWLEDGEMENT OF DEBT - WHETHER SIGNATURE OF DIRECTORS ON FINANCIAL STATEMENTS IS AN ACKNOWLEDGEMENT OF DEBT -
CIVIL PROCEDURE - Judgment - In default of defence - Application for extension of time to file defence - Injunction restraining mortgagee's power of sale - Restriction on Marbella principle - Whether liquidator can acknowledge debt which may be statute barred on behalf of company - Whether signatures of directors on financial statements is acknowledgment of debt - Civil Procedure Rules 10.3(9), 26.1(2)(c) and 26.8 - Limitation of Actions Act. S. 33
A number of applications is before the court in this matter. The applications are:
The context
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a. an application by Jamaican Redevelopment Foundation Inc (JRF) to extend time within which to file the defence and to permit affidavits filed so far on its behalf to stand as a defence;
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b. an application by Premium Investments Limited (In liquidation) (PIL) for judgment in default of defence;
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c. an application by PIL for an extension until trial of the interim injunction granted at a without-notice hearing; and
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d. an application by JRF for the injunction to be discharged.
The claim arose out of a dispute between PIL and JRF. PIL is a company in voluntary liquidation and Mr. Douglas Chambers was appointed liquidator on August 12, 2003. JRF is now the holder of mortgages granted over certain properties by PIL to certain financial institutions. JRF wishes to enforce those mortgages on the basis that PIL has defaulted on its payments.
By way of a fixed date claim form dated September 13, 2007, PIL is seeking:
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1. an order that the defendant do give to the claimant a full account of all monies alleged by the defendant to be owing by the claimant to the defendant such account(s) to commence on the 1 st day of December 1993 up to the present time.
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2. an order that such accounts be given by the defendant to the claimant in respect of each and every loan or advance made to the claimant in respect of which the defendant alleges that the claimant is indebted to it including the following particulars:
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a. the date on which each and every loan or advance was made to the claimant, the amount of the principal of each and every such loan or advance, the rate per centum per annum of interest charged in respect of each and every such loan or advance;
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b. the amount of each and every payment already paid by the claimant and/or anyone else on behalf of the claimant in respect of each and every such loan and the date on which each such payment was made and the manner in which each and every such payment was appropriated or applied;
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c. the amount of each and every sum claimed to be due to the defendant from the claimant but unpaid, the date on which it became due and the amount of interest due and unpaid in respect of every such sum;
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d. the amount due of every such sum not yet due which remains outstanding, and the date on which it will become due;
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e. the manner in which interest is computed (simple or compound) in respect of each and every such loan or advance and the rest at which it is applied or computed.
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3. An injunction to restrain the defendant whether by itself or by its directors, officers, servants or agents or otherwise howsoever from dealing with or disposing of the land owned by the claimant comprised in certificates of title registered at volume 1127 folio 995, volume 1206 folio 261 and volume 1218 folio 285 of the Register Book of Titles (which are subject to a Registered Mortgage which the defendant claims to own) until the final determination of this action.
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4. Costs.
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5. Such other relief as this Court deems fit.
On September 17, 2007, PIL sought and obtained a without notice injunction restraining JRF or its directors, officers, servants or agents or otherwise, howsoever from dealing with or disposing of land owned by the claimant comprised in certificate of title registered at volume 1127 folio 995, volume 1206 folio 261 and volume 1218 folio 285 of the Register Book of Titles for a period of fourteen days from the date hereof or further order. It is this injunction that JRF wishes to have discharged.
There is no issue that JRF is now the legitimate holder of the mortgages entered into by PIL with its previous lenders. It is common ground that JRF appointed a receiver which according to the terms of the loan is the agent of PIL and not the agent of JRF, contrary to the submission of Mr. Beswick (see clause 6 of mortgage agreement).
Application to extend time within which to file defence and application for judgment in default of defence
The first two applications can be dealt with together since they are, in this case, different sides of the same coin. I shall relate the facts relevant to these applications. In response to the claim and injunction, JRF filed an acknowledgment of service on September 19, 2007. Miss Janet Farrow, on behalf of JRF, swore an affidavit dated September 28, 2007, in opposition to the application for the injunction which was granted on September 17, 2007. Miss Janet Farrow swore another affidavit dated November 16, 2007, also in response to the injunction. To this affidavit was attached several audited financial records for the years 2000 and 2001. By the time this affidavit was filed, PIL, on November 13, 2007, filed an application for judgment in default of defence. Miss Farrow's affidavit was filed three days later.
PIL contends that since JRF did not file an affidavit in response to the fixed date claim form within the time required by the rules, it is entitled to judgment in default of defence.
Mr. Piper is applying (a) for an extension of time within which to file the defence and (b) for an order that both affidavits of Miss Farrow be allowed to stand as the defence to the claim form.
Mr. Beswick submits that JRF has failed to comply with rule 10.3 of the Civil Procedure Rules (CPR). He submitted further that when a defence is not filed within the time and the parties have not agreed to extend the time the defendant cannot file the defence as of right and is therefore under an automatic sanction, which is that the defendant is barred from filing a defence unless he has the leave of the court. According to Mr. Beswick, the applicable rule is rule 26.8 which deals with relief from sanctions.
While appreciating Mr. Beswick's point, it must be remembered that rule 10.3 (9) permits a defendant to apply for an order extending the time for filing a defence. The rule does not say when the application is to be made. It does not say that the application must be made before the time for filing the defence has expired. Also there is rule 26.1 (2) (c) which states that the court may extend or shorten the time for compliance with any rule, practice direction, order or direction of the court even if the application for an extension is made after the time for compliance has passed.
Neither rule 10.3 (9) nor rule 26.1 (2) (c) contains the criteria that govern the exercise of the power to enlarge time. I take the point that this application is being made out of the time set by the rules to file a defence. This means that the defendant cannot file his defence unless he has the agreement of the claimant or the leave of the court. It is therefore a sanction imposed by the rules. However, the application to extend time is not an application under rule 26.8., but under rules 10.3 (9) and 26.1 (2) (c). Nonetheless I would say that the court can take into account the factors listed there as a kind of guide when determining whether to exercise the discretion to extend time. But in the end it is the overriding objective which must guide the exercise of the discretion in the application I am now considering.
I have formed the view that it is just for me to extend the time within which JRF is to file its defence and it is also just for me to permit the affidavits filed in opposition to the application for the interim injunction to stand also as JRF's defence. I have come to these conclusions for the following reasons. First, the first affidavit of Miss Farrow was filed on September 28, 2007. Her second affidavit was filed on November 16, 2007 which was outside the time permitted by the rules to file a defence. The second affidavit added more information but the core of the defence was in Miss Farrow's first affidavit. Second, the filing of the affidavit on September 28, 2007, albeit in response to an application for an injunction, was done within the time to file a defence and since the September 28 affidavit contains the defence of JRF, it is hard to see how PIL can be put at any disadvantage if I were to grant the extension of time because PIL would have known what JRF's case is. Third, there would hardly be any useful purpose served by requiring JRF to file two affidavits containing the same information - one in respect of the injunction application and the other as a defence. This would be indefensible profligacy. Fourth, in keeping with the...
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