Ramsanmugh Et Anor v Hand in Hand Mutual Insurance

• Jurisdiction: Guyana
• Judge: George C.
• Judgment Date: 14 May 1992
• Neutral Citation: GY 1992 CA 6
• Court: Court of Appeal (Guyana)
• Date: 14 May 1992

Court of Appeal

George, C.; Bishop, J.A.; Churaman, J.A.

Ramsanmugh Et Anor

and

Hand In Hand Mutual Insurance

Appearances:

Mr. C.M.L. John with Mrs. P. Roach for appellants.

Mr. J.A. King, S.C with Mr. R. Ramkarran for the first respondent

Miss L. Blenman and Miss J. Ali for the second and third respondents.

Mr. J.N. Singh (Jnr.) for the fourth respondent.

Real Property - Mortgage — Sale of property at execution — Whether sale nullified by inaccurate instructions to levy — Effect of payments made after issue of writ — Law and practice relating to mortgages in Guyana — Whether O.36, r.42 relating to execution to recover money judgements applied to mortgage debts — O.36, O.12, O.25 of High Court Rules — Civil Law of Guyana Act, Cap. 6:01, s.3 — Manner of Proceeding Ordinance 1855, s. 143.

George C.

1 In their action in the High Court, (No. 4538 of 1985), which is the subject matter of this appeal, the appellant had claimed a declaration that the sale at execution held by the second respondent on the 10th September 1985 at the instance of the first respondents in ‘foreclosure action’ No. 3566 of 1983 in respect of lot 407 Block H, Pln. Peter's Hall with the building and erections thereon to the fourth respondent was null and void and a consequential order cancelling the sale. They also applied for a rehearing of the ‘foreclosure action’.

2 The property in question was owned by the appellants, who are married to each other. It had been the subject of a first mortgage with the first respondents for a capital sum of $70,000.00 with interest at the rate of eight and one half percent per annum, which was later increased to ten percentum per annum. The deed provided for the payment of the mortgage capital and interest at the rate of $550.00 per month, and among the other obligations undertaken by the appellants were to maintain fire and life insurance policies, which they assigned to the mortgage. On of the provisions of the deed that was executed empowered the mortgagee to ‘foreclose’ the mortgage in the event that the appellant failed to observe any of the covenants or conditions contained therein. This is just what happened. They failed to pay several instalments of capital and interest as well as several fire and life insurance premiums. Accordingly, about May 1984 the first respondent filed their proceedings and on the 30th July 1984 obtained judgment for the sale of the property. Thereafter on the 31st October 1984 their lawyers gave instructions to levy, and after the issuance of the court's fiat, the second respondent in keeping with the general practice when a foreclosure order is made, levied on the property, the subject matter of the mortgage. The third respondent caused the sale of the property to be advertised with Order 36 of the High Court Rules, and at the actual sale, which was conducted on the 10th September 1985 by the second respondent, the property was sold to the fourth respondent who was the highest bidder. It is as a result of what had transpired prior to and that the sale that in December 1985 the appellants filed the action in which they sought to have the sale revoked and a rehearing of the ‘foreclosure action’. Their claim on both counts was dismissed and it is against that order that they now appeal to this court. Their grounds of appeal embody the same contentions as those advanced in support of their claims before the trial judge. These are that:

1

the order for ‘foreclosure’ of the 30th July 1984 was made contrary to the rules of natural justice in that after the action had first come on for hearing it had been adjourned sine die in course of settlement but no notices had been sent to the plaintiffs appointing that date as the date for the resumed hearing; 2. the instructions to levy was for a sum of $75,683.00 when the amount owing was less because the first plaintiff had, between July and September 1984, paid to the first respondents’ agent sums in excess of $15,000.00, having be induced by the agent to believe that he only needed to pay off the arrears and all would be well; and that he was never informed that an order for ‘foreclosure’ had been made until long after that event; 3. the seizure of the property was null and void as the instructions to levy, which is dated the 3rd October 1984, did not direct a levy on movable property and the second respondent made no effort to levy, on such property as is required by Order 36, r. 42 of the High Court Rules.

3 In their statement of defence the first respondents had denied all the above allegations and the particulars that were given in support of them.

4 The first appellant's evidence in support of the first of the above grounds was not directly challenged by the respondents, and it would appear that all efforts by the trial judge to locate the court file or the minute book of the trial judge in the ‘foreclosure action’ I order to ascertain the truthfulness or otherwise of his statement proved futile. But despite his uncontradicted evidence the trial judge found herself unable to determine whether in fact notices were sent to him and his wife. However, had the trial judge examine the order as entered she could have had no hesitation as regards what happened. That order recited that the appellants had failed to appear at all in response to the writ of summons, and in my opinion the implication of this statement must be that despite proper service on them they chose no to respond to the edict of the court. However, even if the evidence was of such a cogent nature as to have required that the trial judge find in favour of the appellants on this issue, I do not think that the procedure by way of writ of summons to have the judgment and order set aside is the proper one. The failure to notify the appellant of the adjourned date would have made the judgment irregular, and therefore liable to be set aside ex debito justitiae, and Order12, r.15 and Order 25, r. 13 of the High Court Rules empower the court or a judge to set aside any judgement that is obtained by default of appearance or any other default. However the Rules do not make provision for the procedure by which any such application is to be made. Accordingly by virtue of Order 1, r.3 the practice in the Queens Bench Division, whereby such applications are instituted by summons, is applied. (See L. 13 r.9 and Order19, r.9 of the 1965 Annual Practice and the notes thereon). The procedure by way of writ of summons to set aside a judgment that is otherwise regular seems to be an option available only in those cases in which it is alleged that the judgment was obtained by raid ( Cole v. Langford (1898) 2 QBD 36 and Jonesco v. Beard [1930] All E.R. Rep. 483), or if by consent that that consent was given under a mistake ( Ainsworth v. Wilding [1896] 1 Ch. 673).

5 The second ground of appeal is concerned with the amount in respect of which the levy was executed. The exact date of the filing of the writ of summons in the ‘foreclosure’ proceedings and the actual amount claimed are both uncertain. It would appear, however, that the writ was filed some time during May 1984, and it is certain that judgement was given on the 30th July 1984 and for the sum of $75,623.10 with interest on the sum of $70,689.15 at 10 percentum per annum for the 3rd November 1983 until the date of payment together with costs of $116.10. In the action to set aside that judgment, however, the appellants failed to lead any evidence of the amount that he claimed was outstanding at the time of the levy. All that he did was to tender certain receipts evidencing sums that he had paid to the first respondent. These totalled $16,037.00, of which two amounts, totalling $3,500.00, had been paid prior to the issue of the ‘foreclosure’ writ of summons, and were in respect of instalments that had fallen due over the period June to December 1983. All the other payments were made between October 1984 and May 1985, i.e. after the judgment was delivered. But even if the amount in respect of which the levy and sale had been carried out was excessive. It is now well established that this fact by itself cannot found a successful cause of action against the judgement creditor unless the judgement debtor alleges and proves malice or want of probable cause. See Singh v. Chase Manhattan Bank, C.A. No. 36 of 1986 and Scheelbel v. Fairbain 126 E.R. 968). Ant there was in the present case no such averment of proof.

6 I, therefore, proceed to consider the third ground of appeal, and the one hat was most strenuously argued before us. It challenges the long established practice under which a mortgage judgement-creditor instructs the Registrar to levy on the specific property designated in the mortgage deed as security notwithstanding the fact that that security is immovable property.

7 It is counsel's contention that despite the fact that in the mortgage deed the appellants as the mortgagors had voluntarily condemned the specific property as security in the event of their breach inter alia of any of the financial obligations undertaken by them, when the first respondents obtained judgement it was mandatory that they proceed to levy on their movable property; and they could only levy on the specific property that is condemned as security by the deed or bond in the event that the movable property proves insufficient to satisfy the judgement that was awarded. In sum he submits that the provisions of Order...