Sherrie Grant v Charles Mclaughlin

 
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IN THE COURT OF APPEAL

BEFORE:

THE HON Mr Justice Morrison P

THE HON Mr Justice Brooks JA

THE HON Mr Justice Pusey JA (AG)

SUPREME COURT CIVIL APPEAL NO 63/2018

BETWEEN:
Sherrie Grant
Appellant
and
Charles Mclaughlin
1 st Respondent

AND

Collin Smith
2 nd Respondent

Written submissions filed by Nea/Lex, attorneys-at-law for the appellant

Written submissions filed by Global Law, attorneys-at-law for the 1 st respondent

PROCEDURAL APPEAL

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

Morrison P
1

I have read, in draft, the judgment of Brooks JA. I agree with his reasoning and conclusion and have nothing to add.

Brooks JA
2

There was undoubtedly skulduggery afoot. The title to a motor vehicle was pledged as security for a loan in August 2005, and the certificate of title was handed over to the bank that extended the loan. By January 2006, a new certificate of title for the vehicle was secured from the government authority, based on a declaration that the original certificate had been lost. The vehicle, by then in a damaged state, was sold in February 2006, and the “replacement” certificate of title delivered to the innocent purchaser for value. The loan, however, had not been repaid. The purchaser repaired the vehicle at considerable cost and put it back into service. The bank located the vehicle in March 2012 and seized it in exercise of its powers contained in the bill of sale, by which the vehicle was pledged.

3

The unwitting purchaser, and victim of that set of circumstances, is Mr Charles McLaughlin. It is unclear who is the dishonest party. Ms Sherrie Grant and Mr Collin Smith, the persons who were the registered owners of the vehicle in August 2005, both claim innocence. Each says that the other had full and sole control of the vehicle during the time leading up to its sale to Mr McLaughlin.

4

Mr Smith asserts that he knew nothing about a loan, or of the vehicle being pledged to a bank as security. He denies having had anything to do with securing a replacement certificate of title or with the sale of the vehicle to Mr McLaughlin. In fact, Mr Smith asserts that he was outside of the island at the time of the purported execution of the bill of sale. His version of the facts is that the vehicle was damaged while it was in Ms Grant's care and she later told him that she had sold it.

5

Ms Grant's position is a little different. She accepts that a loan was taken from the bank and that the vehicle was pledged as security. She says, however, that the loan was for Mr Smith's sole benefit and that she only co-signed the documentation with him by virtue of her co-ownership of the vehicle. She says that by October 2005, Mr Smith told her that he had repaid the loan. In fact, she says, he produced the certificate of title for the vehicle. She, therefore, had no reason to disbelieve him. She accepted that she sold the vehicle to Mr McLaughlin, but asserted that she was entirely ignorant of any impropriety.

6

There is little wonder, in those circumstances, that Batts J refused Ms Grant's application to strike out Mr McLaughlin's claim against her, and allowed Mr McLaughlin to rectify a procedural error that he had made in his claim against the bank, Ms Grant and Mr Smith. The error was that Mr McLaughlin had filed a further, further amended statement of case, in breach of the Civil Procedure Rules 2002 (the CPR). He filed the document without first having obtained permission from the court.

7

Mr McLaughlin had first sued the bank alone. That was in 2013. It was after the bank had filed its defence, relying on the bill of sale, that Mr McLaughlin joined Ms Grant and Mr Smith as defendants to his claim. That was in 2017. It was in his further, further amended particulars of claim (“the impugned amendment”), which he filed in February 2018, that he later accused them of breach of contract, fraudulent misrepresentation and unjust enrichment. He asserted that the seizure of the vehicle has cost him the purchase price of $300,000.00, the cost of repair of $763,000.00 and loss of use to the tune of millions of dollars.

8

The impugned amendment included an explanation for the lapse of time between 2006 and 2011. He said that it took him that long to repair the vehicle. The registration of the change of ownership could not have been done, he says, while the vehicle was in a damaged state.

The appeal
9

Ms Grant has appealed to this court to set aside Batts J's orders. In summary, she asserts that Batts J was in error in:

  • a. allowing Mr McLaughlin's amendment, without prior permission, of his particulars of claim, to stand; and

  • b. ignoring the fact that the amendment was done after the expiry of the relevant limitation period.

10

She filed nine grounds of appeal covering the complaints about the learned judge's decision:

  • “a. The learned judge erred in law and/or wrongly exercised his discretion when he invited the 1 st Respondent to orally apply for an extension of time and thereafter allowed his Further, Further Amended Claim Form and Particulars of Claim to stand as filed in circumstances where:

    • (i) an extension of time was not the appropriate application since there was no timeline attached to an application under Rule 20.4(2) of the Civil Procedure Rule. The application ought to have been for permission to file the Further, Further Amended Claim Form and Particulars of Claim which required different considerations;

    • (ii) the application for extension of time was made and granted in the face of the Appellant's application to strike out the said further, further amended pleadings as being invalid and of no effect; they having been filed after more than two case management conferences without the prior permission of the Court; and

    • (iii) the 1 st Respondent did not see the need to apply for the Court's permission to further amend his claim being of the erroneous view that since the matter was transferred to the Commercial Division and there had not yet been a case management conference in that division, but was nevertheless invited by the court to apply for extension of time, which was, in any event, the wrong application.

  • b. The learned judge erred in law and/or wrongly exercised his discretion in allowing the 1 st Respondent's further, further amendments which consist of entirely new claims, to wit, breach of contract, fraudulent misrepresentation and unjust enrichment to stand in circumstances where:

    • (i) these claims were never pleaded against the Appellant within the relevant limitation period;

    • (ii) the 1 st Respondent had not set out any breach of a contract in his claim before the amendments that are now sought to be impugned;

    • (iii) the 1 st Respondent became aware of the facts that could ground his new claims more than six (6) years prior to the date when he was orally permitted to apply for an extension of time to allow the further, further amendments to stand; and

    • (iv) the 1 st Respondent attended two (2) prior case management conferences and failed to seek permission to further amend his claim.

  • c. The learned judge erred in law in finding that Rules 26.9( 1),(2),(3) and (4) of the Civil Procedure Rules were relevant. He failed to appreciate that Rule 26.9 is inapplicable for the following reasons:

    • (i) Rule 26.9(1) applies where the consequence of failure to comply with a rule has not been specified by any rule, order or practice direction. The consequence for failure to comply with Rule 20.4(2), however, is implicit in the said Rule, that is, the failure to obtain permission will result in no amendment being granted and any amendment made without permission would be disallowed.

    • (ii) Rule 26.9(2) speaks to steps taken not being invalidated where there is an error of procedure or failure to comply with a rule, order or practice direction. However, there is a distinction between failing to apply for permission (complying with the rule) and being granted permission (effect of complying with the rule), which permission is required before taking the step of amending the claim. Therefore, the further, further amendments were invalid at the time they were filed and could not thereafter be validated by an extension of time.

    • (iii) Rule 26.9(3) and (4) empowers the court to put matters right with or without an application. This does not apply to Rule 20.4(2) as it would mean that the said Rule could be flouted and the Court can give permission to amend even where no permission is sought.

    • (iv) There was no error of procedure or [sic] but a deliberate failure to comply with Rule 20.4(2) which is couched in mandatory language.

  • d. The learned judge misdirected himself on the law when he held that fraudulent misrepresentation and unjust enrichment are equitable claims and therefore could only be barred by laches and not by the Limitation of Actions Act. In so holding, the learned judge failed to appreciate that those claims are common law claims for the fact that:

    • (i) misrepresentation, when made fraudulently, becomes tort of deceit and therefore an action on the case; and

    • (ii) unjust enrichment is categorized under the law of obligation which, in any event, arose from an alleged breach of contract;

    • both of which are subject to the Limitation of Actions Act 1881.

  • e. The learned judge, having correctly identified that the issue of time bar carries the ancillary question of when the cause of action accrues in particular for breach of contract, erred in law in finding the answer to such question depends on factual determinations such as when [a] Claimant became aware of breach of contract, or when the loss suffered.

  • f. The learned judge erred in law and/or wrongly exercised his discretion in allowing the 1 st Respondent's Further, Further Amended Claim Form and Particulars of Claim to stand as filed thereby relating the amendments back to when they were filed and not when permission was granted. In so doing, the...

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