Sheila Rose-Green v Patrick Rose-Green and Bank of Nova Scotia

• Jurisdiction: Jamaica
• Judge: DOWNER, J.A.: , BINGHAM. J.A. , PANTON. J.A. , DOWNER, J.A.
• Judgment Date: 31 July 2002
• Neutral Citation: JM 2002 CA 38
• Judgment citation (vLex): [2002] 7 JJC 3108
• Court: Court of Appeal (Jamaica)
• Date: 31 July 2002

IN THE COURT OF APPEAL

BEFORE:

THE HON. MR. JUSTICE DOWNER, J.A THE HON. MR. JUSTICE BINGHAM, J.A THE HON. MR. JUSTICE PANTON, J.A

BETWEEN

SHEILA ROSE-GREEN

PLAINTIFF/APPELLANT

AND

PATRICK ROSE-GREEN

1 ^ST DEFENDANT/RESPONDENT

AND

BANK OF NOVA SCOTIA JAMAICA LIMITED

2 ^ND DEFENDANT/RESPONDENT

^st

CIVIL PROCEDURE - Statement of claim - Striking out - Whether "no cause of action" disclosed

DOWNER, J.A.:

1 The issue to be determined in this interlocutory appeal is whether Reckord, J. came to the correct determination in acceding to the Bank of Nova Scotia's prayer to strike out the Amended Statement of Claim of Sheila Rose-Green which relates to the Bank. There was a prayer in the Amended Statement of Claim at page 119 of the Record for:

2 ....

"3. An injunction to restrain the second Defendant whether by itself, its servants and/or agents or howsoever from transferring or in any way dealing with the said property."

3 The Bank of Nova Scotia (the "Bank") wishes to exercise a power of sale in respect of the matrimonial home so this prayer plays an important role in the case.

4 It is important to set out the specific averments in the Amended Statement of Claim to appreciate how the prayer affects the Bank. They read as follows:

"5A. The Second Defendant had actual or constructive notice of the fact that the First Defendant was exercising undue influence over her.

PARTICULARS

• i) That the second Defendant knew that the Plaintiff had received no legal advice.

• ii) That the second Defendant failed to ensure that the Plaintiff took Independent legal advice.

• iii) Alternatively, that the second Defendant failed to emphasize and communicate with the Plaintiff the need to seek independent legal advice.

• iv) That the second Defendant failed to inform the Plaintiff of the full extent of the first Defendant's liability to the second Defendant ."

5 Then the Amended Statement of Claim continued thus:

"In the premises, the said Instrument of Guarantee and the Mortgages over the property known as Lot 45 Unity Hall, Montego Bay in the parish of Saint James registered at Volume 1183 Folio 480 were or have become null and void and are unenforceable ."

"AND THE PLAINTIFF CLAIMS:-

• 1. A declaration that the Plaintiff was wrongfully induced to sign and execute an Instrument of Guarantee dated the 14 ^th day of October, 1994 and Instruments of Mortgage numbered 656976, 739002, 796508, 836428 and 910231 over property known as Lot 45 Unity Hall, Montego Bay in the parish of Saint James registered at Volume 1183 Folio 480 of the Register Book of Titles in favour of the Second Defendant by the undue influence of the First Defendant and that the said Instrument of Guarantee and Instruments of Mortgage are null and void.

• 2. An Order that the Defendants do execute all such documents and do all and such other as may be necessary to discharge the said mortgages and revoke the Instrument of Guarantee.

• 3. ..."

6 The Bank's summons at page 91 of the Record was worded, thus:

"TAKE NOTICE THAT at the hearing of the Plaintiff's summons dated the 29 ^th day of October, 1998, and filed herein, the 2 ^nd Defendant will apply FOR AN ORDER THAT:

• 1. This action be struck out and writ of summons and all subsequent proceedings filed herein set aside as against the 2 ^nd Defendant on the ground that:

  • (a) it discloses no cause of action against the 2 ^nd Defendant; and or

  • (b) it is frivolous and vexatious and/or an abuse of the process of the Court.

• 2. The costs of this application and of the action to date hereof be the 2 ^nd Defendant's and be taxable immediately."

7 The gist of the Plaintiff/Appellant's case was that her husband induced her by way of undue influence to sign a number of important instruments which resulted in loans by the Bank which were secured by their matrimonial home.

8 The basis of the learned judge's decision is to be found in the following passage in his judgment at pages 135–136 of the Record:

"On the other hand, where the loan is made to the husband and the wife jointly, it cannot be said that the transaction was manifestly disadvantageous to her.

'A claim to set aside a transaction on the ground of undue influence whether presumed or actual cannot succeed unless the claimant proves that the impugned transaction was manifestly disadvantageous to him.' (See Pitt (supra) at page 438).

In clear and unchallenged affidavit evidence the plaintiff personally benefitted from several of the transactions entered with the Bank along with her husband. They were all made for the improvement of their matrimonial home.

Save for Scotia Plan loans totalling just under $5 million made to the husband personally I find that the bank was under no duty to ensure that the wife had independent legal advice.

There will therefore be an order in terms of the second defendant's summons dated 9 ^th December, 1998, paragraph 1 (a) and paragraph 2 as amended."

9 There are two features to note. Firstly, the learned judge purported to decide matters pertaining to substantive property rights in interlocutory proceedings on affidavit evidence and secondly he made no mention of the guarantee which she gave for the husband's loans. These were important issues in the case. Additionally, the formal order of the Court below reinforces the view that the learned judge concentrated on paragraph 1 (a) of the Bank's summons to strike out the Amended Statement of Claim. The order reads:

• "1. This action be struck out and the Writ of Summons and all subsequent proceedings filed herein set aside as against the 2 ^nd Defendant on the ground that it discloses no cause of action as against the 2 ^nd Defendant;

• 2. The costs of this application and of the action to date hereof be the 2 ^nd Defendant's;

• 4. Leave to appeal granted;

• 5. Stay of execution for six (6) weeks."

10 Did the Plaintiff/Appellant's Amended Statement of Claim disclose 'no cause of action' with respect to the Bank as the learned judge below found?

11 The initial point to make is that once the Statement of Claim was amended it had a retrospective effect so that the amendments are to be read as if they were made from the date of the original Statement of Claim. The second point is that the learned judge decided in favour of the Bank on the basis of paragraph 1(a) of the summons. Mrs. Minott-Phillips for the Bank recognized that such a finding was untenable in view of the amendments to the Statement of Claim.

12 She therefore filed a Respondent's Notice on the basis that the learned judge's judgment in favour of the Bank could not be justified by paragraph 1 (a) but rather by paragraph 1 (b) of the Bank's summons. As previously stated paragraph 1 (b) sought to dismiss the Statement of Claim on the ground that it was frivolous and vexatious and an abuse of the process of the Court. Such a finding could, she submitted, also be supported on affidavit evidence. There is an extract from the judgment on which Mrs. Minott-Phillips relied at page 131 of the Record which reads:

"Mr. Graham submitted that though a Court will not on affidavit evidence, order a pleading to be struck out on the ground that the statements are false, the circumstances in the present case showed the defence to be frivolous, and vexatious, and one which ought to be struck out as being an abuse of the process of the Court.

Counsel further submitted that in all interlocutory applications the tribunal should be wary of attempting to come to findings of fact based on competing affidavits since choosing between them was the function of the trial judge, not the judge in the interlocutory application - See Day vs. RAC Motoring Services Ltd. - (1999) 1 All E.R. Page 1007.

Linotype Hall v. Baker (1992) 4 All E.R. p. 887.

Counsel submitted the circumstances of the plaintiff: She deponed to the fact that she reposed great trust and confidence in her husband - She was a mere child when she got married. Her husband was a man of some prominence and substance - she was an accounting clerk and then became an insurance agent. Undue influence was exercised over her by him and this affected her will. It was not her will. The bank had an obligation to write her to procure independent advice. There is no dispute that they did no such thing. In the context of all those circumstances the Court should dismiss the second defendant's claim and strike out the summons."

13 It is against that background that the Respondent's Notice defined the issues raised on appeal. It reads at pages 3–4 of the Record:

• "1. The action was frivolous and vexatious and an abuse of the process of the Court under paragraph 1(b) of the summons dated December 9, 1998 filed by the Respondent for the following reasons:

  • a) The Appellant did not contend in her pleadings that the transactions she sought to impugn were to her manifest disadvantage; and

  • b) The documentary evidence before the Court clearly showed that the Appellant had benefited directly from the loans disbursed by the Respondent in circumstances where the Appellant indicated to the Court that she was not relying on the doctrine of non est factum.

• 2. The Scotia Plan Loan made to the Appellant's husband personally, being for the purpose of settling debts already incurred for home improvement, was not a debt incurred for a purpose which was beneficial to the Appellant's husband solely. To the extent that the Appellant benefitted from the loans advanced for the purpose of improving her home, she benefitted directly from those loans and indirectly from such loans as were extended for the purpose of settling the indebtedness arising from those loans."

14 These reasons ignored the following passages in Mrs. Rose-Green's affidavit:

• "3. That at the time when we purchased the house my...