IN THE HIGH COURT OF JUSTICE. Between FIRST CITIZENS BANK LIMITED. And JENNIFER DANIELS

Transcription

1 THE REPUBLIC OF TRINIDAD AND TOBAGO IN THE HIGH COURT OF JUSTICE CV Between FIRST CITIZENS BANK LIMITED And JENNIFER DANIELS Claimant First Defendant And BRANDON RAMDEEN also called BRANDON TREVOR RAMDEEN and BRADLEY RAMDEEN T/A EAGLES WINGS DISTRIBUTORS Second Defendants And BRANDON RAMDEEN also called BRANDON TREVOR RAMDEEN and BRADLEY RAMDEEN Third Defendants C. J. MAXX LIMITED ************ Fourth Defendant Before Master Patricia Sobion Awai Appearances: For the Claimant: Mr. Thomas For the First Named Defendant: Mr. Navindra Ramnanan

2 THE APPLICATION 1. The defendants filed an application pursuant to Rule 13.3 (1) of the Civil Proceedings Rules (CPR) to set aside the judgment entered for the claimants in default of defence on November 19, The claimant, First Citizens Bank Limited, is a financial institution licensed under the Financial Institutions Act with its registered office at No. 9 Queens Park East, Port of Spain. 3. The first defendant, Jennifer Daniels, is a former commercial customer of the claimant bank, who maintained a Commercial Mortgage Loan Account with the claimant. 4. The second defendants Brandon Ramdeen and Bradley Ramdeen Trading as Eagles Wings Distributors are a partnership registered under the Registration of Business Names Act, located at No. 67 J.B. Charran Drive, Orange Field Road, Carapichaima, Chaguanas. 5. The third defendants, Brandon Ramdeen and Bradley Ramdeen, are businessmen residing at Lot Nos. 1 and 2 Sunset Close, Ablack Extension Trace, Calcutta Road, Freeport. 6. The fourth defendant, C.J. Maxx Limited, is a company duly incorporated and registered under the Companies Ordinance and continued under the Companies Act Chap. 81:01 having its registered office at 11 Main Road, Chaguanas. Page 2 of 11

3 BACKGROUND 7. On February 8, 2011 the claimant bank and the first defendant entered into a loan agreement whereby the claimant agreed to loan the first defendant the sum of $5,506, for the purpose of consolidating existing debt held at the claimant bank. 8. The first defendant entered into a Memorandum of Mortgage dated March 25, 2011 with claimant bank whereby she mortgaged the property situated at Lot Nos. 1 and 2 Ablack Extension Road, Calcutta Road Freeport as security for the loan. The sureties in this Memorandum of Mortgage were (1) Brandon Ramdeen and Cindy Ramdeen trading as C.J. Maxx, (2) Brandon Ramdeen and Bradley Ramdeen trading as Eagles Wing Distributors (the second defendants), (3) Brandon Ramdeen and Bradley Ramdeen (the third defendants) and (4) Cindy Beharry. The sureties guaranteed repayment of the entire loan and interest. 9. By Memorandum of Variation of Mortgage dated July 28, 2011, Brandon Ramdeen and Cindy Ramdeen trading as C.J. Maxx and Cindy Beharry were discharged from their obligations as sureties. C.J. Maxx (the fourth defendant) was named as Incoming Borrower covenanting to pay all monies due to the claimant bank as if it had been a party to the mortgage as borrower. 10. The defendants defaulted in making the payments due under the loan. The claimant bank issued pre action protocol letters demanding payment of the principal sum and interest owed by the first and fourth defendants. Page 3 of 11

4 11. Exercising its power of sale as mortgagee, the claimant bank sold the property situate at Lot Nos. 1 and 2 Ablack Extension Road, Calcutta Road Freeport for $2,000, This sum was applied to the outstanding debt. 12. The claimant then instituted proceedings against the defendants claiming the principal sum of $3,403, and interest in the sum of $507, The defendants entered an appearance on July 1, However no defence was filed and judgment was taken up in default of defence on November 19, RELEVANT CPR PROVISIONS 14. The rules relevant to the instant application are set out below. 15. Rule 13.3 (1) of the CPR states: (1) The court may set aside a judgment entered under Part 12 if (a) the defendant has a realistic prospect of success in the claim; and (b) the defendant has acted as soon as reasonably practicable when he found out that judgment has been entered against him. 16. Rule 8.1 of the CPR states: (3) A claim form must be in Form 1 or 2, with or without variations. (4) Form 2 (fixed date claim) must be used Page 4 of 11

5 (c) whenever its use is required by a rule or practice direction; 17. Rule 69.1 (1) of the CPR states: This Part deals with claims by a mortgagor or mortgagee for any of the following forms of relief: (a) payment of moneys secured by a mortgage; (b) sale of a mortgaged property; (c) foreclosure; (d) possession of a mortgaged property; (e) redemption of a mortgage; (f) reconveyance of the property or release from the mortgage; and (g) delivery of possession by the mortgagee, which are referred to in this part as mortgage claims 18. Rule 69.2 of the CPR states: A mortgage claim is made by issuing a fixed date claim. AS SOON AS REASONABLY PRACTICABLE 19. In determining whether to set aside a default judgment the CPR mandates a two pronged approach. See Rule 13.3 (1) above. 20. I will first consider whether the defendants acted as soon as was reasonably practicable when they found out that judgment had been entered against them. 21. The first defendant in her affidavit deposed that her attorneys first discovered the existence of a default judgment on February 21, Thereupon, the attorneys promptly prepared an application to set aside the Page 5 of 11

6 judgment in default. The application and affidavit were completed on the evening of February 26, Unfortunately, the defendants attorney was robbed of his motor vehicle that evening. Inside the motor vehicle were the completed documents as well as the attorney s laptop computer. The application was thereafter filed on March 13, Having regard to this evidence, which was uncontested by the claimant, it is my view that the defendants acted as soon as was reasonable practicable when they found out that judgment had been entered against them and have thus satisfied the second of the two requirements stated in Rule 13.3 (1) of the CPR. REALISTIC PROSPECT OF SUCCESS 23. The defendant raised two points in relation to whether it had a defence with a realistic prospect of success, namely, (1) whether the claim ought to have been made by fixed date claim (Form 2) and (2) whether the property was sold at an undervalue. 24. I will first address the defendants contention that procedurally the claimant s original claim was not put properly before the court, not having been made by way of a fixed date claim form. 25. If the wrong procedure was used to obtain a default judgment, then this may be a good ground for setting aside the default judgment on the ground that there was a realistic prospect of success in that judgment was Page 6 of 11

7 wrongly entered on what should have been a fixed date claim. 26. The defendants argued that mortgage claims must be commenced by way of a fixed date claim form as specified under Rule 69.1 of the CPR. In addition, a claimant can not obtain default judgment where the claim is a fixed date claim. Therefore, default judgment should not have been obtained by the claimant. 27. In my view the defendants contention fails for the following reason. A reading of Rule 69.1 (1) reveals that the phrase mortgage claims refers to claims that deal with the following: payment of moneys secured by a mortgage; sale of a mortgaged property; foreclosure; possession of a mortgaged property; redemption of a mortgage; reconveyance of the property or release from the mortgage; and delivery of possession by the mortgagee. In the present claim the claimant is not seeking payment of moneys secured by a mortgage, the mortgaged property had already been sold. Rather, the claimant was seeking payment of outstanding sums due after the monies received from the sale of the mortgaged property had been applied to the debt. In my view therefore, this claim does not fall within the definition of a mortgage claim. 28. Moreover, in The Supreme Court Practice Volume at 88/6/1 the authors state: Therefore a claim for payment of a debt which was formerly secured by a mortgage or charge but is no longer secured (e.g where the mortgaged property has Page 7 of 11

8 been sold but the proceeds of sale have been sufficient to discharge the debt in full) is not a mortgage action and is outside O.88, so that judgment in default can be entered without leave in the ordinary way. If at the time the action was begun the monies were secured but ceased to be secured after the action has begun the action ceases to be a mortgage action and judgment in default may be entered without leave: Newham v Brown [1966] 1 WLR The above quotation supports my interpretation of a mortgage claim. When the claimant exercised its power of sale and sold the property, the mortgage ceased to exist. Therefore, the claimant was not required to bring its claim to secure the remainder of the outstanding debt by way of fixed date claim form. 30. I will now consider whether the defendants have a realistic prospect of success on the merits of the case. The law regarding the determination as to whether a defendant has a realistic prospect of success is well established. Lord Woolf MR in Swain v Hillman [2001] 1AER 91 noted that the court must consider whether a defendant has a realistic as opposed to a fanciful prospect of success. In ED & F Man Liquid Products Ltd v Patel [2003] EWCA Civ 472 Lord Potter noted that the defence advanced must carry some degree of conviction. In Royal Brompton Hospital NHS Trust v Hammond (No. 5) [2001] EWCA Civ 550 Aldous LJ stated: Page 8 of 11

9 To decide whether there was a real prospect of success, the court had to go further and conclude that the evidence in the witness statements, perhaps supplemented at trial to amplify ambiguities, was bound to fail even though not challenged by any evidence of the defendants. 31. The defendants in their defence, which was attached to the affidavit of Jennifer Daniels filed on April 9, 2014, contended that the claimant sold the mortgaged property at a gross undervalue. They maintain that while a fair market value of the mortgaged property was $7,500,000.00, the claimant sold the property at a price of $2,000, The defendants indicate that a valuation of the property dated August 13, 2009 conducted by G.A Farell & Associates Limited whilst the property was still under construction valued the property at the sum of $3,200, The defendants contend that the claimant has exercised its power of sale in an arbitrary and capricious manner. 32. The claimant on the other hand gave evidence as follows. Sherma Leopold, the claimant s manager, stated in her affidavit that the mortgaged property was valued by G.A Farell & Associates Limited in a report dated October 20, 2011 as $2,750, This report was attached to Ms. Leopold s affidavit. The report also indicated that the property had been partially vandalised. 33. Leopold also deposed that the mortgaged property was advertised 14 times in daily newspapers, which exceeded the statutory requirement that a property must be Page 9 of 11

10 advertised 8 days prior to the date of any sale. She went on to state that the mortgaged property received bids ranging from $600, to $2,203, However, the first five bidders withdrew their bids after seeing the state of the mortgaged property. The property was thus sold to the next highest bidder for $2,000, The question then is whether the defendants have shown a realistic prospect of success as opposed to a fanciful one. 35. In my opinion the defendants $7,500, estimation of the property s value is fanciful. There was no indication on the evidence that such a valuation was made by a competent authority and if such a valuation in fact existed, no reason given for its non production. 36. On the other hand there is credible evidence from the claimant as to the value of the property. First there was the valuation report. Then there was the evidence relating to the advertisements for the sale of the property. There was also evidence as to the bids made and bids withdrawn. None of this evidence has been challenged. 37. Except for the defendants bare allegation, there is no basis whatsoever for concluding that the property was sold at a gross undervalue or that the claimant acted in an arbitrary and capricious manner. 38. Given the weight of the claimant s evidence, it is my view that the defendants evidence even if amplified at Page 10 of 11

11 trial is bound to fail. In my view, the defendants have no realistic prospect of success. RULING 39. The requirements of Rule 13.3(1) of the CPR not having been fully satisfied, the defendants application filed on November 19, 2014 to set aside the judgment in default of defence is refused. 40. The defendants shall pay the claimant's costs to be assessed in default of agreement. Dated this 7 th day of November, P. Sobion Awai Master Page 11 of 11