Ali v Sookdeo, Ss Ship & Rig Supplies Ltd and First Citizens Bank Ltd
| Jurisdiction | Trinidad & Tobago |
| Judge | Rahim, J. |
| Judgment Date | 26 July 2013 |
| Neutral Citation | TT 2013 HC 222 |
| Docket Number | CV 839 of 2010 |
| Court | High Court (Trinidad and Tobago) |
| Date | 26 July 2013 |
High Court
Rahim, J.
CV 839 of 2010
Mr. S. Parsad and Ms. K. Jackson for the claimant.
Mr. P. Deonarine instructed by Ms. S. Moolchan for the third defendant.
First defendant appears in person unrepresented.
No appearance of a representative of the second defendant.
Real Property - Mortgage — Claim to set aside Deeds of Mortgage — Counterclaim for possession — Undue influence — Whether there was actual and/or presumed undue influence by first defendant over the claimant to enter into mortgage transactions — Whether third defendant had notice of undue influence — Claim dismissed — Judgment for third defendant on counterclaim.
This action relates to a parcel of land together with the dwelling house thereon situate at Circular Street, Princes Town.
The claimant claims against the defendants a declaration and an order that Deeds of Mortgage dated the 19th December 2006 registered as No. DE 200700070480 and the 19th January 2009 registered as No. 200900435437 made in respect of the said property be cancelled/rescinded/set aside as having been obtained by misrepresentation by the first defendant and/or by actual undue influence of the first defendant. Further, that the third defendant had actual and/or constructive notice of the undue influence. The claimant also claims an injunction restraining the third defendant from disposing of, leasing or selling the said property.
The third defendant has counterclaimed against the claimant for possession of the said property.
The claimant claims to have met and formed an emotional relationship similar to that of husband and wife with the first defendant in or around the year 2004/2005. The claimant claims that at the time of meeting the first defendant, she was in a vulnerable and emotional state consequent upon the death of her husband in February 2003 and then her father's death in October 2003.
The claimant avers that in or around the year 2006, the first defendant requested that the claimant lend to him money to assist him setting up his shipping company. The claimant claims that she informed the first defendant that she did not have the money to lend to him and that her house was the only asset she had but that it was at the time mortgaged to CLICO. The first defendant subsequently informed the claimant that he would be taking a loan from the third defendant to finance his business and that he would need to use the claimant's property as collateral. The claimant claims that the first defendant told her that he would pay off the claimant's existing mortgage to CLICO with part of the funds obtained from the loan.
The claimant claims that in December 2006 she signed documents which she understood to be a mortgage of her property to facilitate a loan to the first defendant to open his business. Following this, the first defendant obtained the loan and informed the claimant that her indebtedness to CLICO had been paid off. The sum of $550, 000.00 was consequently advanced to the first defendant (the first loan).
The claimant avers that in or about September 2008, the first defendant requested the claimant to sign a further document to facilitate him obtaining a further loan from the third defendant. According to the claimant, the first defendant told her that if he did not obtain the extra money he would be unable to pay the first loan which would result in the seizure of her property by the third defendant. As a result of this conversation, in or about January 2009, the claimant visited the third defendant's San Fernando Branch and signed certain documents which she understood to be a mortgage of her property to facilitate a further loan to the first defendant. The sum of $150, 000.00 was consequently advanced to the first defendant (the second loan).
By letter dated 8th July 2009, the claimant was informed by the third defendant that the first defendant had defaulted on the first and second loans.
The claimant claims that she was induced to execute the first mortgage on the basis that the first defendant was in the process of forming his own company, when truthfully the company was in existence since August 2000. Further, the claimant avers that the execution of the deeds of mortgage was procured by the undue influence of the first defendant over the claimant at a time when she was vulnerable and grieving over the deaths of her husband and father.
The claimant also avers that the third defendant had constructive and/or actual notice of the undue influence exercised by the first defendant. In this regard the claimant claims that when she attended the first defendant's Point Lisas branch to execute the first mortgage for the first loan, she informed an employee about the deaths of her husband and father and the circumstances surrounding the meeting and relationship with the first defendant. The claimant claims that when she went to the third defendant's San Fernando Branch to execute the second mortgage in relation to the second loan, she again told the officer about the deaths and her relationship with the first defendant.
Further, the claimant claims that the third defendant failed in the circumstances to take reasonable steps to discharge the constructive and/or actual notice. Additionally, the claimant claims that the third defendant failed to take adequate steps to bring home to the claimant the risk she was taking by mortgaging her property to secure the debts of the first defendant.
The first defendant has failed to file a Defence although he appeared at trial and declined the court's invitation to cross-examine. The second defendant has failed to enter an appearance and was not represented at either case management or trial.
The third defendant admits that the claimant's property was used as security for a loan to the second defendant. However, the third defendant contends that there were three mortgages to secure the advancement of three separate loans to the second defendant. Further, the third defendant avers that at all material times the claimant understood the purpose of the loans and the implication of her security.
The third defendant claims that the claimant executed the following Deeds to cover certain advances to the second defendant:
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i. 29th December 2005 No. DE200600066141D001 to cover the sum of $280, 000.00;
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ii. 19th December 2006 No. DE200700070480D001 to secure the sum of $550, 000.00;
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iii. 19th January 2009 No. DE200900435437D001 to secure further advances in the sum of $150, 000.00.
The third defendant avers that prior to the signing of each Deed the claimant was advised by the third defendant's lawyers at Hobson's of the nature of the mortgage, its implications and further advised to seek independent legal advice. Additionally, the third defendant alleges that prior to the signing of the Guarantee Statement in relation to the third loan, the claimant met with Loan Officer Mr. Peter Williams and Branch Manager Mr. Russel Bachan. According to the third defendant, at this meeting, the claimant was advised of the implications of a Guarantee Agreement and to seek legal advice. Mr. Bachan also informed the claimant that the accounts of the second defendant were not in good standing. The claimant allegedly responded that she knew of the accounts and that she knew the first defendant and will act as Guarantor for the increased loans.
The third defendant denies any undue influence and states that the alleged undue influence only surfaced when the third defendant threatened to sell the claimant's property. Further, the third defendant states that nothing was done by the claimant between the times for executing each mortgage to avoid any of the transactions.
The third defendant claims that in the alternative if there was a presumption of undue influence, the third defendant had taken all reasonable steps to ensure that the claimant's signature on the said Mortgage Deeds were not procured by undue influence.
The third defendant also denies having constructive notice of undue influence and denies that the claimant had any conversation with its employees as alleged by the claimant.
The third defendant's counterclaim is based on the default in Mortgage payment despite demands being made to the second defendant and copied to the claimant.
Although there appears to be some discrepancy on the claimant's pleadings on the issue of the mortgage transactions, Attorney for the claimant submitted that although there were three transactions, for the purpose of these proceedings the claimant sought to set aside Deed No. DE200700070480D001 dated the 19th December 2006 and Deed No. DE200900435437D001 dated the 19th January 2009.
While the claimant has asked that the deeds of mortgage be cancelled/rescinded/set aside as having been obtained by misrepresentation by the first defendant, there have been no submissions on the issue of misrepresentation. Further, the evidence proffered by the claimant relate primarily to undue influence, so that it is understandable that the issue of misrepresentation should be abandoned in that context and the court so infers.
The following issues however arise for determination:
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i. Whether there was actual and/or presumed undue influence by the first defendant over the claimant to enter into the mortgage transactions.
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ii. If the answer to (i) above is yes, whether the third defendant had notice of the undue influence and failed to discharge its obligation to ensure the transaction was not procured by undue influence.
A contract will only be set aside for undue influence if the person asking for it to be set aside proves that undue influence has been exercised. The claimant may do...
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