Michaelmas Term
[2017] UKPC 34
Privy Council Appeals
No 0032 of 2016 and 0062 of 2016
JUDGMENT
Deslauriers and another (Appellants) v Guardian
Asset Management Limited (Respondent)
(Trinidad and Tobago)
From the Court of Appeal
of Trinidad and Tobago
before
Lord Mance
Lord Kerr
Lord Hughes
Lord Lloyd-Jones
Lord Briggs
JUDGMENT GIVEN ON
9 November 2017
Heard on 11 and 12 October
2017
|
Appellants
Peter Knox QC
Ian Benjamin
(Instructed by
Charles Russell Speechlys LLP)
|
|
Respondent
Gavin Kealey QC
Elizabeth Lindesay
(Instructed by
Clyde & Co)
|
THE judgment of the board:
1.
The appellant defendants Mr and Mrs Deslauriers are property developers
whose projects have been sited in the past both in Trinidad and Tobago and in
the United States of America. At the beginning of October 2007 they entered
into a commercial loan under which they borrowed TT$18.6m from the respondent
claimant (“GAM”), which is a company administering pension, insurance and
investment funds. They gave promissory notes for repayment and the loan was
secured by a demand mortgage of parcels of land belonging to them. The loan
could be repaid at any time after the first anniversary (thus October 2008) and
was repayable in any event on 2 April 2009. Interest was payable quarterly. It
was paid up until January 2009, but neither further interest nor the principal
was repaid. After several agreed extensions of time had passed, GAM sued for
repayment and interest on 20 November 2009. The Deslauriers both denied
liability and counterclaimed damages. After a trial in July 2011, Rahim J gave
judgment for GAM on 25 October 2011. The Deslauriers’ appeal against that
judgment was dismissed by the Court of Appeal on 3 February 2016. In the
meantime, there had been further dispute over GAM’s efforts to enforce its
judgment. The judge directed sale of property owned by the Deslauriers at 28-29
Victoria Square in Port of Spain (“the Victoria Square property”), and the
Court of Appeal upheld his order on 24 July 2015. There are now before the
Board two further appeals by the Deslauriers:
(A) against the liability
judgment: [2016] JCPC 62; and
(B) against the
enforcement judgment: [2016] JCPC 32.
(A) The liability appeal
2.
The Deslauriers did not dispute the loan or its non-payment. The essence
of their defence was a complaint that GAM had let them down by leaving them
unable to access further borrowing to complete a development which was in train
at the time of the loan, residential apartments called Hevron Heights at Champs
Fleurs. Their case was, in summary:
3.
(a) the loan was required to help fund Hevron Heights;
(b) until late 2007 the
Deslauriers were borrowers from their longstanding bankers, the Republic Bank;
(c) GAM aggressively pursued
the Deslauriers for their business, against their reluctance to leave the
Republic Bank;
(d) the TT$18.6m borrowed
was only the first tranche of funding needed for Hevron Heights, which was
going to cost in the region of TT$60m in all;
(e) the Deslauriers made
clear to GAM that they would need more funding later;
(f) although they
enquired of GAM what differences there were between it and a conventional bank,
GAM told them that the only difference was that the loan was not repayable
before its first anniversary; GAM failed to tell them of any internal or
external lending limits which might inhibit its ability to make further loans
to finance the later stages of Hevron Heights;
(g) when they did ask for
more money at the end of 2008, GAM refused their application and indicated that
one (or the) reason was that there were lending limits which an additional loan
would exceed;
(h) the result was that
they took the loan from GAM, and stayed with it, when otherwise they would have
borrowed elsewhere from a lender who would have been able to offer further
finance;
(i) in consequence they
had been unable to complete Hevron Heights and had suffered loss of profit put
at some TT$24m.
4.
This complaint found expression in a number of different ways in the
Deslauriers’ Defence and Counterclaim:
(a) further advances
were a condition precedent to the obligation to repay;
(b) GAM
was in breach of a contractual obligation to finance the whole of the Hevron Heights
project, giving rise to a counterclaim in damages which should be set off
against the claim under the promissory notes;
(c) the
failure to disclose any lending limits to which GAM was subject made the answer
to the question about the difference between it and banks a misleading one;
this amounted to a misrepresentation for which the Deslauriers were entitled to
damages;
(d) GAM
was under a duty of care to advise the Deslauriers of any lending limit and
liable in damages for negligent breach of it.
5.
Argument (a) has not been pursued and no more need be said about it,
except that it was advanced at the trial and some of the judge’s findings of
fact were located in the section of his judgment rejecting this argument. It
was clearly unfounded since the promissory notes themselves generated an
obligation to repay and were in no sense conditional in their terms.
6.
Mrs Deslauriers, who had conducted the business with GAM, appeared in
person at the trial and gave evidence. For GAM evidence was given by Mr Ramdeen,
who had handled the other end of the negotiations. Mrs Deslauriers’ evidence,
and her conduct of the trial, concentrated entirely on argument (b), viz a
contractual promise to fund the entire project, which she said GAM had broken.
7.
Arguments (c) and (d) were at times confused in the Defence and
Counterclaim, and (c) might be said to have been but elliptically pleaded. They
are of course different. (c) was summarised in the prayer as a claim for
damages “for misrepresentation”. It is reasonably clear that that meant, in the
present case, a claim under section 3(1) of the Misrepresentation Act (12 of
1983; Ch 82.35). Such a claim involves proving (i) a misrepresentation which
(ii) induces the claimant to enter the contract and which (iii) GAM did not
believe on reasonable grounds to be true. There was no reference to the Act,
still less to section 3(1), and no allegation that GAM did not believe the
alleged misrepresentation to be true. But the claim for damages for
misrepresentation was distinctly made separately from the claim for damages for
negligence (as to which see below), and inducement was alleged in the narrative
of events pleaded. It was sufficiently clear that what was being alleged was a
misstatement about GAM’s own lending limits, whether internally or externally
imposed, and that as such GAM must have known the true position. So the claim
under section 3(1) was - just - sufficiently made.
8.
A claim under section 3(1) of the Misrepresentation Act involves no
tortious duty of care; its gist is simply that a contracting party misstates a
material matter which induces the other party to enter the contract. Such a
misrepresentation, if made, can only come before the contract, here the loan.
Anything passing between the parties after the loan might be evidence from
which a pre-contract misrepresentation could be inferred, but it cannot itself
amount to a misrepresentation actionable under the Act. Part of the explanation
for the course of the trial, and the consequent form of the judgment, may well
be that there is no sign that this point was appreciated either in the Defence
and Counterclaim (which was professionally drafted) or by Mrs Deslauriers at
the hearing. There was, however, no issue about the point before the Board,
where Mr Knox QC readily accepted it; the Board has been grateful to him and to
Mr Benjamin for their professional help, the more so since it is understood
that it was given pro bono.
9.
By contrast, if there was a tortious duty of care to avoid negligent
misstatement, under the principle first enunciated in Hedley Byrne & Co
Ltd v Heller [1963] UKHL 4; [1964] AC 465, that duty might well continue
after the contract of loan was made, so that subsequent breach is actionable in
damages. Such a duty of care would, however, require an assumption of
responsibility by GAM for giving professional advice to the Deslauriers, which
requirement is absent from any claim under the Misrepresentation Act. Once
again, it is not at all clear whether these differences between a claim under
the Act and a claim for tortious misrepresentation were appreciated in the
drafting of the Defence and Counterclaim, and they very plainly did not figure
in argument at trial. Certainly the written pleading contained no express
assertion of the basis on which it could be alleged that there was the
necessary assumption of professional responsibility for the care of the
borrower. However, it distinctly pleaded a prayer for damages for negligence,
which thus constituted argument (d).
10.
Because the whole trial centred upon the Deslauriers’ complaint that
they had been promised funding for the entire project, the judge (correctly)
focussed his judgment principally upon that issue. That is not to say, however,
that he did not address separately the various claims made. He did, albeit that
he did not repeat findings of fact already made when he moved on to a different
basis of claim. GAM’s case, as pleaded by way of Reply and Defence to
Counterclaim and as spoken to by Mr Ramdeen, had been that there had been no
discussion about future funding at all, save that Mrs Deslauriers had indicated
that she proposed to fund Hevron Heights from other sources, including the
deposits taken from prospective purchasers of the apartments. It was also the
fact that, although it was clear from the discussions prior to the loan that
the money would be used for Hevron Heights, the loan was principally required
to re-finance the existing indebtedness to Republic Bank. That in turn had not
been principally for Hevron Heights but for a quite separate development which
the Deslauriers were undertaking at the Victoria Square property.
11.
Having heard the oral evidence of both Mrs Deslauriers and Mr Ramdeen,
and examined the correspondence between them, conducted by email, the judge
rejected the evidence of Mrs Deslauriers. He found that there was no sign of
GAM having pursued the Deslauriers aggressively; rather, the latter were
dissatisfied with their relationship with the Republic Bank (para 50(i)). He
found that there was no agreement for further financing. Moreover, he accepted
Mr Ramdeen’s evidence that he had been told by Mrs Deslauriers that she
intended to fund the project by other means (paras 39 and 54). There is in this
context no significant difference between her saying that she intended to fund
it elsewhere and saying that it was being funded elsewhere. He specifically
disbelieved Mrs Deslauriers’ evidence that Mr Ramdeen had said off the record
that GAM would fund the entire project (para 63). He found that her assertion
of a promise to fund the entire project was inconsistent with the
correspondence, particularly since in 2008 she had asked whether GAM would lend
a further sum, rather than claimed it as a facility previously agreed (para
50(iii)). He found that if Mrs Deslauriers was under the impression that a
representation was made as to future financing, that was the product of her own
making, given what he described as her unconventional use of language (para
64).
12.
In the face of these findings by the judge who heard the witnesses, it
would be unrealistic to pursue the complaint that there was a promise to fund
the whole project, and Mr Knox realistically did not do so. Nor did he do so
before the Court of Appeal. His case before the Board is confined to arguments
(c) and (d) as listed in para 4 above - the Misrepresentation Act and a common
law duty of care. He founds his argument in three stages. Firstly, he says that
even if there was no promise of future funding, the email correspondence makes
clear that GAM was aware that future funding would be needed, and that a
request for extra money might be made of it. Secondly, he points to the fact
that it was common ground that there had been some conversation about the
differences between GAM and a bank, and that whilst there was a dispute as to
exactly what GAM had said, it was not asserted that it included prior to the
contract (or at all) anything at all about whatever lending limits applied to
it. Thirdly, he contends that the indicative refusal to make a further advance,
which GAM issued in January 2009, is evidence that some kind of lending limit
existed, whilst no positive evidence was given by GAM to set against it.
Combining those factors, he contends that once GAM knew that there was at least
the possibility that a request for further funding might be made of them, and
once there was a conversation about any difference from a bank, the statement
(whatever it was) as to a difference relating to repayment terms was partial
and misleading, since it did not, on any view, say anything about lending limits
which might inhibit future advances. He further contends that the judge did
not, in concentrating on the failed allegation of a promise to fund the entire
project, recognise this line of argument. His case is that the judge’s view of
the credibility of Mrs Deslauriers does not need to be challenged in order to
mount this argument. The email correspondence establishes, he says, the first
stage. The second does not depend on her evidence, and nor does the third.
13.
It is convenient to take the third stage first. It is clear, and was
common ground, that in late 2008, a year or so after the loan, Mrs Deslauriers
sought at least some additional advance, not to the extent of the suggested
total cost of the development, but at any rate for some TT$6m. Formal refusal
did not come until April 2009, but on 8 January 2009 Mr Ramdeen had sent an
indicative response by email which included the following:
“I agree that your track record
has been excellent to date, but we need to follow the guidelines set by our
regulator for failure to do so would run the risk of our license being revoked.
If our balance sheet was much larger then the additional TT$6M would not be an
issue. As soon as I receive feedback I will call you.”
14.
The evidence at trial about what if any lending limits applied to GAM
was uncertain. Mrs Deslauriers cross-examined Mr Ramdeen on statutory limits on
overall lending under the Financial Institutions Act 1993. However, (a) these
apply to all lenders, of any kind, and so cannot constitute a difference
affecting GAM which makes its answer to the question about the differences
false, and (b) it is in any event a matter of public record, as available to
Mrs Deslauriers as to GAM. Mr Ramdeen in evidence confined himself to answering
the questions put. He said nothing about what limits, internally or externally
applied, affected GAM at the material time, and he did not explain the email of
8 January 2009 because he was not asked to. In those circumstances, the judge
understandably made no finding about what if any lending limit applied. It is
of course possible that the email of 8 January was simply letting a
disappointed applicant down lightly, but no-one from GAM has ever said so. The
Board is content to proceed on the basis that there was prima facie evidence,
from this email of 8 January, that some kind of regulatory limit or other
constraint, internal or external, inhibited further lending to the Deslauriers.
15.
As to the second stage of Mr Knox’s argument, it is common ground that
nothing had been said to Mrs Deslauriers about a lending limit, if such
existed. It does not matter for present purposes exactly what the answer had
been to the question about differences between GAM and a bank, nor whether the
question had been about a “large” bank, or any bank.
16.
Without more, a failure to say something is not a misrepresentation. But
it may become such if a partial statement is made, which, because it omits
something material, is misleading. This is a separate principle from the
proposition that if, pre-contract, a party says black, which either is true or
which he believes on reasonable grounds to be true (and is thus not a
misrepresentation), he is under a duty to correct his statement if he
subsequently learns prior to the contract being made that the true position is
white. The latter proposition, whilst correct, has no application to the
present case, for it is not suggested that the position as to any lending
limits altered between the time of the conversation about banks and GAM and the
making of the loan at the beginning of October 2007. It follows that what
matters in the present case is whether there is any basis for saying that the
judge erred in failing to find a misrepresentation by way of a partial and
misleading statement. That in turn depends crucially on whether the existence
of any lending limit was material at the time of the conversation. It is not a
misrepresentation to leave out of any discussion a matter which is of no
materiality to the contract under negotiation.
17.
On this crucial point, the judge’s findings, on the contested evidence,
accepting Mr Ramdeen’s evidence that there was no discussion of future funding
by GAM of the rest of the development project, are fatal to the claim in
misrepresentation. If the possibility of application to GAM for additional
loans for the rest of the development was not raised, then the lending limits
which affected GAM were simply irrelevant, there was no occasion to disclose
them and whatever it said in the conversation about banks cannot amount to a
materially partial or misleading statement. This would be so even if the judge
had not addressed the legal argument based on the Misrepresentation Act at all,
but in fact he did.
18.
The emails relied on were all considered by the judge alongside the oral
evidence, but on reconsideration of them they do not show that there was such a
discussion. The principal one relied upon before the Board was from Mrs
Deslauriers to GAM on 24 June 2007. It is true that it contains, in the course
of several pages of text, the words “If I need further assistance later on the
security as we discussed will be worth a lot more as the buildings actually
take shape.” This passage needs to be considered in context. This long email
came a day or two after the initial indication from GAM of the offer which it
was prepared to make for the single loan under discussion. It had been based on
a 66% loan to security ratio and Mrs Deslauriers, who was an experienced
developer, had queried the percentage. She wanted to be able to make this
initial loan 75% of the security available, which was, she said to GAM, the
industry standard. GAM promptly accepted this. In the long email relied upon,
Mrs Deslauriers set out the figures. She wanted the loan to re-finance her
existing borrowing from Republic Bank, which stood at TT$15.5m, made up of TT$12.4m
advanced on the different property of Victoria Square, TT$1,700 interest on
that sum, and TT$1.4m advanced on Hevron Heights. She contended that the
available security was TT$21.8m, so that 75% of that would be TT$16.35m. GAM’s
initial indication of offer was not the TT$18.6 eventually advanced, but TT$15m.
Accordingly, Mrs Deslauriers was making the point that there was ample headroom
in the security she was offering to accommodate a loan of up to TT$16.35m. This
drew the reply from Mr Ramdeen that GAM was willing to consider $16.35m, but
would need to look carefully at the security, to which Mrs Deslauriers
responded that she could stick to TT$15m if needed. Other passages in this
email dealt with the value of the security being offered. The email was not
about possible future financing of the entire project; it was about the amount
of the single loan then under negotiation. Much the same applied a few days
later when, on 26 June, Mrs Deslauriers said that the parties seemed near to
agreement. It is true the she referred to having to build out the project, and
that this may be a reference to Hevron Heights, rather than to the Victoria
Square property development. But everyone knew that Hevron Heights had to be
built. It does not follow from this that she was giving any indication that she
expected GAM to be able to finance it beyond the single loan being discussed.
What she was asking about in that email was principally whether she could draw
down the single loan in instalments, as needed; plainly if she could, the
interest would not run from the beginning on the whole sum. The answer in the
end was that that was not how GAM lent their money. That was, one might
observe, a simple difference between a single loan advanced by a pension or
investment fund, and a running loan account held at a bank.
19.
Discussions continued about the amount of the loan. On 13/14 September,
in another email exchange relied on by Mr Knox, Mrs Deslauriers asked whether,
given that the security offered was now, in her view, TT$24.8m (and rising in
value as the building was progressed) that meant that she could borrow up to TT$18.6m.
Mr Ramdeen replied that it meant that if she needed up to TT$18.6m that should
not be a problem from the point of view of loan to security ratio, although if
the advance was up to that figure, it would have to be on the same basis of
loan for at least a year from the final element, that is without earlier
redemption. Mrs Deslauriers made it clear by her response on 16 September that
this is how she understood the conversation, for she said “So then if we do the
TT$18.6m I have to do it now, in order not to delay the payoff in one year; is that
correct?”. This exchange likewise does not begin to approach an understanding
that GAM might be asked in the future to make further advances to enable the
project to be completed, such as might generate in GAM an obligation to make
disclosure of what its lending policies or limits might be in relation to such
further advances. The TT$18.6m is the sum eventually advanced by way of the
single loan sued upon.
20.
These conclusions, based upon the concurrent findings of fact by the
judge and the Court of Appeal, never mind the Board’s own analysis of the emails
relied upon, are sufficient to dispose of this appeal insofar as it depends on
the claim under the Misrepresentation Act. Two additional reasons why it cannot
succeed ought, however, to be added.
(i) Even assuming in
favour of Mrs Deslauriers that GAM told her that the only difference
between itself and banks was that its loans were for a fixed term of a year
rather than on running account, and even assuming that there were some kind of
lending limits applicable to GAM, there was no evidence whatever before the
judge that those limits were different from those applicable to a bank. Without
such evidence it is difficult to see how the representation relied upon can be
said to be a misrepresentation.
(ii) If that obstacle
were to be overcome, there was no evidence whatever before the judge that if
the suggested misrepresentation by omission/partial statement had not been
made, the Deslauriers would not have suffered the same loss that they did,
through inability to complete Hevron Heights. They would have to show two
things. First, that they would, if told of the existence of lending limits,
have placed their initial borrowing elsewhere, and second that the substitute
lender would have been in a position, in late 2008 and subsequently, to make
sufficient further advances to enable Hevron Heights to be completed.
Certainly, if a minimum of such evidence had been adduced, it might well have
been open to the Deslauriers to argue their case on quantum of damages on the
basis of loss of a chance. But there was no evidence at all, and that basis of
claim was never mentioned. It may be true that until mid-January 2009 the
climate of the market was not unfavourable to developers, and that it changed
abruptly for the worse on the collapse of Clico at about that time. But that is
mere guesswork; it required evidence. Moreover, on any view, after the collapse
of Clico it seems to have been the Deslauriers’ own case that lenders were not
disposed to lend for developments of the kind which Hevron Heights was. If so,
even if an alternative lender had initially been well disposed to lend more, it
is at least unproved that enough would have been forthcoming to enable the
project to be completed and the loss suffered to be avoided.
21.
If a proper basis for the alternative claim under Hedley Byrne
were laid, then the duty of care thus arising would be capable of continuing
after the loan contract was made. That would enable the Deslauriers to rely on
correspondence after the contract, during 2008, when at least towards the end
of the year it became apparent that they were looking for further finance from
somewhere. They are able to say that they told GAM that they were in
discussions with a new bank (RBBT). Before that, on 30 July 2008, Mrs
Deslauriers renewed her question whether she could in effect treat the loan as
a running account. She enquired whether she could pay off the existing loan at
the beginning of October 2008, rather than in April 2009 when it was finally
due, but meanwhile borrow different sums, still within the security presently
held by GAM. The answer was that the suggestion was confusing, and that the
loan was fixed for payment in April, with an option to repay earlier in
October. There is nothing in this exchange to indicate any change in the basis
of business, still less that Mrs Deslauriers was even asking GAM to lend enough
to fund the whole project. A little later on 17 November Mrs Deslauriers did
indicate that she was in conversation with RBBT who, she asserted, were keen to
fund the project for what she described as “the last ten months”. She suggested
paying off GAM’s existing loan early in January. She enquired whether GAM
wanted to keep the business longer term, and she also asked meanwhile for an
extra TT$1-2m, which she said was within GAM’s existing security, to cover
current expenditure. Mr Ramdeen did not respond to the question about future
business except to reply very briefly that if an extra TT$1-2m were advanced,
it would have to be for the full year January to January. It is certainly true
that he did not at that point say that there was the obstacle to further
borrowing which, when later she asked for an additional TT$6m, he referred to
in his indicative refusal of 8 January 2009 (para 13 above). But she was not in
November speaking of TT$6m, and whether there would have been the same obstacle
to TT$1-2m is not known. In any event, his brief reply in November cannot bear
the construction that GAM was put on notice that she was relying on it to fund
the remainder of the project. There is no basis for drawing from either
exchange an assumption of responsibility to advise the Deslauriers about GAM’s
lending policies.
22.
The duty of care postulated depends on the relationship between the
parties giving rise to an assumption of responsibility by GAM for giving
professional advice to the Deslauriers. The relationship between these parties
was between a commercial lender and its highly experienced commercial borrower.
It was an arm’s length relationship, in which each sought to further its own
commercial interests. If business between them was mutually beneficial, that
was no doubt to the advantage of both, but it is not a relationship of adviser
and client. It would be a very unusual relationship of that kind which gave
rise to a duty on the part of the lender to advise the borrower about its
internal lending policies or approaches to applications for loans, still less
to any external influences, regulatory or otherwise, which applied to it. It
would be extremely difficult to envisage such a duty arising even if it had
been the fact that the borrowers indicated from the beginning that they hoped
to borrow more in the future. In the face of a finding that no such discussions
took place between the parties, it is quite impossible to construct the duty of
care contended for. The judge was clearly right to reject it. Moreover, the
absence of evidence that loss was incurred which would otherwise have been
avoided is as damaging to this claim as it is to the claim under the
Misrepresentation Act.
23.
For all these reasons, the appeal against the finding of liability under
the promissory notes, and dismissing the Deslauriers’ counterclaim, must itself
be dismissed.
(B) The enforcement appeal
24.
This appeal concerns the enforcement of the judgment of Rahim J of 25
October 2011 in favour of GAM against Mr and Mrs Deslauriers. The judgment was
in the amount of TT$20,676,295.69 plus interest. The total now outstanding
exceeds TT$36m, with interest continuing to accrue.
25.
On 30 August 2013, pursuant to the Remedies of Creditors Act Ch 8:09,
GAM sought an order for the sale of Mrs Deslauriers’ alleged beneficial
interest in the Victoria Square property. Before Rahim J Mrs Deslauriers
opposed the order for sale inter alia on the grounds that (i) pursuant to a
Deed of Settlement dated 8 December 2009 Victoria Square was held on trust for
her son and daughter and (ii) that the court should take into account the sum
likely to be recovered from the sale of the development property, Hevron
Heights, which was mortgaged to GAM and in respect of which GAM was granted
vacant possession on 29 September 2014 and which Mrs Deslauriers claimed was
worth TT$77m. GAM submitted that Mrs Deslauriers had not divested herself of
the beneficial ownership of Victoria Square by the Deed of Settlement. It also
disputed that its right over Hevron Heights affected its entitlement to an
order for the sale of the Victoria Square property.
26.
On 27 October 2014 Rahim J made an order for the sale of the Victoria
Square property. He held that no valid trust of Victoria Square had been
created and that both the legal and beneficial interest in the property remained
vested in Mrs Deslauriers. He also held that he could have no regard to the
unsold value of Hevron Heights.
27.
Mr and Mrs Deslauriers appealed and on 24 July 2015, the Court of Appeal
(Moosai and Narine JJA) dismissed the appeal. On 15 February 2016 the Court of
Appeal granted final leave to appeal against the order for sale of Victoria
Square to the Judicial Committee.
28.
The following issues arise on the enforcement appeal.
i)
Whether, on its true construction, the Deed of Settlement created a
trust of Mrs Deslauriers’ beneficial interest in Victoria Square in favour of
her children.
ii)
Whether, even if Victoria Square was held on trust, since the Deed of
Settlement was unregistered it did not prevent GAM as judgment creditor from
enforcing its judgment by way of an order for sale of Victoria Square;
iii)
Whether the judge had no discretion to stay the sale of Victoria Square
pending the sale of Hevron Heights under section 38 or section 54, Remedies of
Creditors Act;
iv)
Whether, if there was a discretion to stay the sale of Victoria Square
pending the sale of Hevron Heights, the Court of Appeal was correct not to
interfere with the order for sale made by Rahim J;
v)
Whether the Court of Appeal was correct to uphold Rahim J’s decision to
set the reserved price for the sale of Victoria Square by reference to GAM’s
valuation report rather than by reference to Mrs Deslauriers’ earlier valuation
report and not to commission an up to date valuation.
Issue (i): The Deed of Settlement
29.
On 8 December 2009 there was executed a document entitled “Deed of
Settlement” between Mrs Deslauriers, described as “the Settlor” and her two
children Daniel David Deslauriers and Lindsay Leah Deslauriers (described as
“the Trustees”). The recital stated that the name of the Trust Settlement was
“Victoria Square Trust”. The Settlor was described as “the beneficial owner of
all that property known as 28-29 Victoria Square … ‘the Trust Property’”.
Recital 4 recorded that:
“(4) The Settlor intends
shortly to transfer the Trust Property into the names of the Trustees to be
held by the Trustees upon the trusts hereinafter declared.”
Recital 5 recorded that:
“(5) The Settlor desires that
the Settlement made by this Deed shall take effect immediately upon the
execution of this Deed.”
30.
Clause 1 provided:
“1. The Trustees shall hold
the Trust Property upon trust to retain the same in its present state of
investment and shall with the consent of the Settlor during her lifetime invest
the income from same and any other moneys from time to time requiring to be
invested under the provisions of this Deed (hereinafter collectively called ‘the
Trust Investments’) in the name of the Trustees in manner authorised by this
Deed and as to all such investments the Trustees with the consent of the
Settlor during her life and afterwards at the discretion of the Trustees
realise all or any of such investments and invest the proceeds in any
investments authorised by this Deed and with the like consent and at the like
discretion may transpose those investments into others.”
31.
Clause 2 provided:
“2. The Trustees shall hold
the Trust Property and the Trust Investments upon the following Trusts:
(i) upon trust to pay the
income from them to the Settlor during her life and thereafter;
(ii) upon trust as to both
capital, income and accumulated interest, income investments etc of the Trust
Property and the Trust Investments for Daniel David Deslauriers and Lindsay
Leah Deslauriers absolutely and equally.”
32.
Clause 6(i) provided:
“6(i) The Settlor during her
lifetime shall have the power to appoint a new trustee or trustees other than
the Settlor in place of any or all of the Trustees or in addition to time.”
33.
It is common ground that Mrs Deslauriers has not transferred and has
never taken any steps to transfer legal title to Victoria Square to her
children to be held by them as trustees upon the trusts declared in the Deed of
Settlement. As a result, GAM’s case is that the Deed of Settlement was not
effective to create a valid trust of Victoria Square and the legal and
beneficial interest in the property remained and remain vested in Mrs
Deslauriers.
34.
In his oral decision of 27 October 2012 Rahim J held that no valid trust
of the property had been created. In his subsequent reasons for his decision he
stated that the legal effect of the Deed was that of a declaration of intention
to create a trust in the future, contingent upon the occurrence of an event
which had apparently not yet occurred ie a conveyance. Accordingly no valid
trust had been created. Referring to Milroy v Lord (1862) 4 De GF &
J 264; 45 ER 1185, he considered this ample authority for the conclusion that,
title to the Victoria Square property not having been transferred, a trust was
never created. The alleged declaration of trust appeared not to be one whereby
Mrs Deslauriers was declaring that she held on trust for her children. On the
contrary it was one whereby she was saying that they would hold on trust for
her when she transferred to them shortly after the date of the Deed of
Settlement which had been executed in December 2009. Some five years later this
had not been done. He concluded that it could therefore not have been her
intention to create a trust as she herself had never fulfilled the condition
that she had imposed in the Deed of Settlement and, even if she had, the
intention was to retain the beneficial interest in the said property.
35.
Rahim J also referred to the decision of Aboud J in Bhawanie v Guppy
CV 2012-02649 where the judge had concluded that in order for a trust to be
properly constituted “the settlor must either validly transfer the property to
the trustee, or, if it remains in his hands, declare himself as the trustee of
the property”. If neither occurred, interests in the property remained
unchanged. Rahim J considered that that was the state of affairs in the case
before him. Mrs Deslauriers had neither validly transferred the property nor
had she declared that she held on trust for beneficiaries. As a result, both
the legal and beneficial interests in the Victoria Square property remain
vested in Mrs Deslauriers.
36.
On the appeal to the Court of Appeal, R Narine JA, with whose judgment P
Moosai JA agreed, referred to Warriner v Rogers (1873) LR 16 Eq 340 and Milroy
v Lord. None of the methods of transfer identified by Turner LJ in the
latter case had been effected. There was no transfer of the property to the
beneficiaries or the proposed trustees and there was no declaration by the
settlor that she intended to hold the property on trust for the purposes of the
settlement. He observed that that was hardly surprising since Mrs Deslauriers
had expressly stated her intention to transfer the property to her trustees and
it would have been odd if she were to declare that she was holding the property
in trust for herself, since she was named as an intended beneficiary of the
income during her lifetime.
37.
The classic statement of the law relating to the voluntary settlement of
property is to be found in the judgment of Turner LJ in Milroy v Lord.
“I take the law of this Court to
be well settled, that, in order to render a voluntary settlement valid and
effectual, the settler must have done everything which, according to the nature
of the property comprised in the settlement, was necessary to be done in order
to transfer the property and render the settlement binding upon him. He may of
course do this by actually transferring the property to the persons for whom he
intends to provide, and the provision will then be effectual, and it will be
equally effectual if he transfers the property to a trustee for the purposes of
the settlement, or declares that he himself holds it in trust for those purposes;
and if the property be personal, the trust may, as I apprehend, be declared
either in writing or by parol; but, in order to render the settlement binding,
one or other of these modes must, as I understand the law of this Court, be
resorted to, for there is no equity in this Court to perfect an imperfect gift.
The cases I think go further to this extent, that if the settlement is intended
to be effectuated by one of the modes to which I have referred, the Court will
not give effect to it by applying another of those modes. If it is intended to
take effect by transfer, the Court will not hold the intended transfer to
operate as a declaration of trust, for then every imperfect instrument would be
made effectual by being converted into a perfect trust. These are the
principles by which, as I conceive, this case must be tried” (pp 274-275).
38.
On behalf of the Deslauriers it is accepted that no further document was
executed transferring the trust property into the names of the trustees as
envisaged by Recital (4) of the preamble. However it is submitted that this is
not conclusive because Recital (5) of the preamble expressly provides that the
settlor desires that the settlement “shall take effect immediately upon the
execution of this Deed” and the terms of the trust itself in the body of the
Deed operate immediately, not from some point in the future. Accordingly, it is
submitted that the effect of Recital (5) of the preamble, in conjunction with
the immediate operation of the terms of the trust, was to transfer the
beneficial interest in the property immediately as (short of a transfer of the
legal title) this was the only way in which the settlement could take effect
immediately upon the execution of the Deed. This, it is submitted, left Mrs
Deslauriers a bare trustee holding the property on trust for her two children
pending transfer to them. It is submitted that the apparently conflicting
provisions of Recitals (4) and (5) can, in this way, be resolved by construing
the Deed as intending to create an immediate transfer of the beneficial
interest followed by a transfer of the legal estate shortly afterwards.
39.
In this regard the Deslauriers draw attention to the judgment of the
Board in T Choitram International SA v Pagarini [2001] 1 WLR 1 where
Lord Browne-Wilkinson observed (at paras 11-12):
“Although equity will not aid a
volunteer, it will not strive officiously to defeat a gift.”
In addition they rely on Pennington v Waine [2002] 1 WLR 2075 where Arden LJ stated at para 61:
“Accordingly, the principle that,
where a gift is imperfectly constituted, the court will not hold it to operate
as a declaration of trust does not prevent the court from construing it to be a
trust if that interpretation is permissible as a matter of construction, which
may be a benevolent construction.”
40.
In the present case Mrs Deslauriers’ submission is essentially that her
intention, as evidenced by Recital (5), was to constitute herself a trustee of
the property until such time as it vested in the trustees in accordance with
the Deed of Settlement. The question is whether this is a permissible
interpretation and whether the words of the Deed of Settlement evidence such an
intention.
41.
In order to declare himself a trustee, a settlor need not employ the
express language of a declaration of trust. As Sir George Jessel MR observed in
Richards v Delbridge (1874) LR 18 Eq 11, 14:
“It is true he need not use the
words, ‘I declare myself a trustee,’ but he must do something which is
equivalent to it, and use expressions which have that meaning; for, however
anxious the Court may be to carry out a man’s intention, it is not at liberty
to construe words otherwise than according to their proper meaning.”
42.
Nevertheless, a settlor’s intention to deal with the property so as to
deprive himself of its beneficial ownership must be clearly evinced. Moreover,
it is to be noted that in the present case Recital (5) sits alongside Recital
(4) which does employ suitable and obvious language making plain an intention
that the property be held on trust by trustees.
43.
On behalf of Mrs Deslauriers great emphasis is placed upon the statement
in Recital (5) that the settlement should take effect immediately upon the
execution of the Deed. However, this of itself cannot be sufficient. In Richards
v Delbridge the donor had endorsed upon a lease words of gift which were
expressed to be effective “from this time forth” and then delivered the lease.
It was held, nevertheless, that there was no valid declaration of trust of the
property in favour of the intended donee.
44.
In any event, the language of Recital (5) is, in the Board’s view,
inconsistent with any intention on the part of Mrs Deslauriers to constitute
herself a trustee of the property. First it expresses a “desire” that the
settlement made by the Deed shall take effect immediately upon the execution of
the Deed. This must be contrasted with Recital (4) where the language of
intention is expressly used and the intention expressly stated. Secondly, and
more fundamentally, Recital (5) records the settlor’s desire that “the
Settlement made by this Deed shall take effect immediately upon the execution
of the Deed”. The Settlement referred to is set out in the substantive clauses
of the Deed of Settlement. The trustees are to hold on the trusts set out in
clause 2 which are totally different from the terms of the bare trust for the
children pending transfer to them, for which the Deslauriers contend. Recital
(5) contemplates a settlement totally inconsistent with Mrs Deslauriers’
submission. Mrs Deslaurier’s contention as to the meaning of Recital (5) is
therefore, in the Board’s view, not a permissible interpretation.
45.
The respondent submits that Recital (5) is intended to make clear Mrs
Deslauriers’ wish that her children were, by signing the Deed of Settlement,
accepting the office of trustees on the terms of the Deed of Settlement.
Thereafter, it is submitted, seamlessly upon the conveyance of Victoria Square
to them, their duties as trustees would commence. Be that as it may, in the
Board’s view Recital (5) certainly does not evidence an intention on the part
of the settlor that she should constitute herself a trustee until the property
is vested in the trustees of the settlement. This settlement was intended to be
effected by a transfer to trustees and, in the present circumstances, it is not
open to the court to give it effect as a declaration of trust. Rahim J and the
Court of Appeal were correct in their conclusion that this was an incompletely
constituted trust. In so far as the enforcement appeal challenges the propriety
of any enforcement order in respect of Victoria Square on the ground that that
property was held on trust for the Deslauriers’ son and daughter, the challenge
fails for that reason alone. The Board will, nonetheless, consider issue (ii),
relating to registration.
Issue (ii): Registration
46.
Issue (ii) only arises on an assumption that (contrary to what the Board
has held, above) the Deed of Settlement was effective to create a trust in
relation to Victoria Square or otherwise to divest Mrs Deslauriers of her
beneficial interest in the property. GAM submits that, even if this were so,
the failure to register it meant that the rights which would have been created
were ineffective as against GAM as a registered judgment creditor of Mrs
Deslauriers. The Court of Appeal held that such rights would have been
ineffective against those of GAM and Mrs Deslauriers challenges that
conclusion.
47.
This registration issue did not arise at first instance, and the point
was first taken by GAM upon service of its written submissions to the Court of
Appeal.
48.
The facts relevant to this issue are not in dispute. The Deed of
Settlement was executed on 8 December 2009, but was never registered. GAM obtained
its judgment on 25 October 2011 and registered it on the same day.
49.
The Deslauriers take the preliminary point that the Court of Appeal
should not have entertained GAM’s registration objection because it had been
raised too late. Since it turns on a pure question of law, the Board’s view is
that the Court of Appeal was entitled to deal with the point, which therefore falls
to be considered on its merits on Mrs Deslauriers’ further appeal.
50.
Section 16 of the Registration of Deeds Act (Chapter 19.06) provides as
follows:
“16.(1) Every Deed whereby any
lands in Trinidad and Tobago may be in any way affected at law or in equity
shall be registered under this Act, and every such Deed duly registered shall
be good and effectual both at law and in equity, according to the priority of
time of registering such Deed, according to the right, title and interest of
the person conveying such lands against every other Deed, conveyance or
disposition of the same lands or any part thereof, and against all creditors by
judgment of the same person so conveying such land.
(2) Every such Deed that is
not duly registered shall be adjudged fraudulent and void as to the lands
affected by such Deed against any subsequent purchaser for value or mortgagee
without notice of the same lands or any part thereof, whose conveyance shall be
first registered.”
51.
Section 16 needs to be read and understood side by side with sections 5
to 8 of the Remedies of Creditors Act (Chapter 8.09). Section 5 provides as
follows:
“5. Every judgment or decree
to be entered up against any person in the Court shall operate as a charge upon
all lands and rents of or to which that person shall at the time of entering up
the judgment or decree, or at any time afterwards, be seized, possessed or
entitled for any estate or interest whatever, whether in possession, reversion,
remainder or expectancy, or over which that person shall at the time of
entering up the judgment or decree, or at any time afterwards, have any
disposing power which he might without the assent of any other person exercise
for his own benefit, and shall be binding as against the person against whom
the judgment or decree shall be entered up, and against all persons claiming
under him after the judgment or decree, and shall be also binding as against
his next of kin, and all other persons whom he might without the assent of any
other person cut off and debar from any remainder, reversion or other interest
in or out of any of the said lands and rents.”
52.
Section 6 makes similar provision in relation to decrees and orders of
the Court, as if they were judgments. Section 7 provides that no judgment or
decree of the Court shall affect lands until it has been registered. Section 8
provides as follows:
“8. Every judgment to be
registered in the manner directed by this Act shall entitle the creditor, by
virtue of the judgment, decree, order or rule, to the same remedies in equity
against the lands charged by virtue of this Act, or any part thereof, as he
would be entitled to in case the person against whom the judgment, decree,
order or rule has been so entered up had power to charge the same lands, and
had by writing under his hand agreed to charge the same with the amount of the
judgment debt, or the amount made payable by the decree, order or rule, and
interest thereon.”
In summary therefore, the effect of sections 5 to 8 of the
Remedies of Creditors Act is, upon registration of his judgment, to confer upon
the judgment creditor all the rights of an equitable chargee of any land owned
by the judgment debtor at the time of the judgment.
53.
It is common ground that, if effective to create a trust or disposition
of a beneficial interest in relation to Victoria Square, the Deed of Settlement
was required to be registered under section 16(1), because it was (or would
have been) a “Deed whereby any lands in Trinidad and Tobago may be in any way
affected … in equity”. But Mr Ian Benjamin submitted for the Deslauriers that,
since judgment creditors were not expressed by section 16(2) to be persons
against whom an unregistered Deed was to be adjudged fraudulent and void (not
being a purchaser for value or mortgagee without notice, with a first
registered conveyance), the issue as to priority between the equitable rights
created respectively by the Deed of Settlement and by the judgment fell to be
determined not in accordance with the time of registration, but in accordance
with the traditional rules of equity, by which (although he did not spell them
out) a competition between equitable interests is resolved in favour of the
first in time to be created.
54.
In the Board’s view, the priority as between the equitable interests
purportedly created by the Deed of Settlement and those arising from GAM’s
registered judgment is determined by section 16(1), not section 16(2). Priority
in accordance with the time of registration governs equitable interests arising
from registrable Deeds and the interests of judgment creditors, where the
judgment debtor is the same person as the grantor (including for that purpose
settlor) under the relevant Deed. The operative words of section 16(1) may be
extracted as follows:
“and every such Deed duly
registered shall be good and effectual … in equity, according to the priority
of time of registering such Deed, … against all creditors by judgment of the
same person so conveying such land.”
55.
The question arose during argument before the Board as to what, if that
is the correct interpretation of section 16(1), is added by section 16(2)? Mr
Kealey submitted that, merely to provide for priority as between equitable
interests according to the time of registration would not protect a
sub-purchaser, from a purchaser enjoying priority by reason of prior
registration, as against an equitable interest thereafter registered, but
before the completion or registration of the sub-purchase Deed. The effect of section
16(2) was to render the unregistered interest void for all purposes, so that
its later registration could not take effect in priority to the interest of a
sub-purchaser from the original purchaser whose conveyance had been first
registered. No such protection was needed for judgment creditors, who could
exercise their rights as prior charge free from the subsequently registered
interest.
56.
The Board considers that this analysis is probably correct, but that it
is unnecessary to decide the point. Even if section 16(2) amounted to little
more than belt and braces, the Board is satisfied that 16(1) is sufficient by
its clear terms to regulate any competition for priority as between the
equitable interests arising under a Deed and those arising under a registered
judgment (which are the same as those of an equitable chargee), in accordance
with their respective dates of registration.
57.
Accordingly, the appeal on issue (ii) also fails.
Issue (iii): Discretion
58.
Under the heading “Enforcement of Judgments on Lands”, sections 28 and
following of the Remedies of Creditors Act enable a judgment creditor to apply
to court by summons for an order for the sale of any beneficial interest of the
judgment debtor in any lands within Trinidad and Tobago, whether legal or
equitable, whether a co-ownership interest, and whether in possession, reversion
or remainder (see sections 28 and 30).
59.
Section 38 provides as follows:
“If at the return of the summons
for sale it is proved to the satisfaction of the Judge that the debtor was at
the time of the registration of the judgment, or at any time after the
registration and before the issue of the summons for sale, entitled to the sole
immediate unconditional beneficial interest, legal or equitable, in the lands
sought to be affected, or in any several and ascertained portion thereof, there
shall be a declaration accordingly, and the same shall be ordered to be sold on
such conditions as to advertisement, date, conditions of sale, description,
reserved price, if any, and otherwise, as the Judge shall by his order direct,
and the Registrar shall, after the sale has been confirmed as hereinafter
provided, execute and deliver to the purchaser thereof, without further order,
a conveyance thereof in fee, to be prepared by the purchaser and which shall
(subject as to land under the Real Property Act to the provisions of that Act)
have the same effect as if the execution debtor had conveyed the same to the
purchaser for all his estate and interest therein.”
60.
Section 54 provides as follows:
“If it does not appear desirable
that the ascertained beneficial interest of the debtor should be sold, the
Judge may, at the return of the summons, order further execution by sale of
land to be stayed till further order, and may award equitable execution by the
appointment of a receiver in respect of the beneficial interest of the
execution debtor, or may appoint the creditor, or any person nominated by him,
receiver thereof without remuneration, or may, on such terms as may be just,
and at the cost of the creditor to be charged by him against the beneficial
interest of the execution debtor, appoint a receiver of the entire rents and
profits of the said land or of any part thereof, or may order any person in
receipt of the rents of profits to pay into Court the whole or such proportion
thereof as shall be directed to the credit of the cause or matter, for such
time or to such amount as shall be just.”
Pausing there, the phrase “at the return of the summons”
in section 54 refers to the creditor’s summons seeking an order for sale for
which the procedure is prescribed by sections 30 and following.
61.
GAM issued a summons for sale (by then called a Notice of Application)
as judgment creditor on 30 August 2013. After various interim skirmishes it was
heard by Rahim J on 27 October 2014 when the judge made an order for sale of
Victoria Square. He did so notwithstanding a request by the Deslauriers for a
stay based mainly on the ground that the Hevron Heights property, over which
GAM had a first mortgage, was amply sufficient to pay the judgment debt and
interest in full, whereas Victoria Square would not be.
62.
The judge’s view, with which the Court of Appeal agreed, was that, once
the judgment creditor satisfied the court of the matters required to be proved
under section 38, it was entitled to a sale. The court’s discretion was limited
to giving directions as to advertisement, date, conditions of sale, description
and reserve price, and did not extend to a discretion to refuse or stay an
order for sale on the grounds that some other asset of the judgment debtor
ought to be realised, by execution or otherwise, first.
63.
It does not appear that any point was made by reference to section 54 at
the hearing before the judge. In the Court of Appeal it was held that the
judge’s view about the absence of the requisite discretion had not been shown
to have been plainly wrong, at least in relation to section 38, and that the
failure of the Deslauriers to apply at first instance under section 54 was
fatal to any appeal based upon a discretion exercisable under that section.
64.
The Board is sympathetic with the view of the courts below that, read on
its own, section 38 does not appear to confer a general discretion whether to
make an order for sale, or whether to stay such an order because of the availability
of some other assets of the judgment debtor, the realisation of which would be
better suited as a means of payment of the debt. The language is, as the judge
noted, mandatory, once the judgment creditor has satisfied the court as to the
requisite matters under section 38.
65.
Nonetheless the Board has concluded that, on an application for an order
for sale by a judgment creditor, sections 38 and 54 have to be considered together,
and that section 54 creates a wider discretion to stay a sale until further
order, “if it does not appear desirable that the ascertained beneficial
interest of the debtor should be sold”. Mr Kealey submitted that, read as a
whole, Section 54 conferred that discretion only if, at the same time, the
court made an order by way of equitable execution for the appointment of a
receiver. While this may be a typical adjunct to an order staying execution by
sale, the Board does not consider that the discretion in section 54 can only be
exercised by staying a sale and ordering equitable execution at the same time.
There may be other reasons why it is not desirable that the beneficial interest
should be sold. For example the judgment debtor may have a range of other
substantial assets at an advanced stage of realisation, such that it reasonably
appears to the court that the sale of the specific property the subject matter
of the creditor’s application is neither necessary or proportionate, for the
purpose of achieving prompt payment of the judgment debt and interest in full.
66.
Nor, in the Board’s view, is the exercise of the discretion conferred by
section 54 dependent upon the judgment debtor making his or her own application
for that purpose. The discretion is expressed to arise “at the return of the
summons” which is, as noted above, a reference to the judgment creditor’s
summons for an order for sale.
67.
The question remains however, whether on the facts of this case, and if
the matter were remitted to be determined at first instance, the judge could
properly grant a stay whether or not accompanied by an order for equitable
execution, on the grounds put forward by the Deslauriers.
68.
There are some trenchant observations both in the judge’s written
reasons and in the judgment of the Court of Appeal why, even if such a
discretion existed, it would have been wholly inappropriate to exercise it in the
Deslauriers’ favour. Nonetheless, since those were delivered in the shadow, as
it were, of a view that there was not such discretion in any event, the Board
prefers to give its own short reasons for the same conclusion.
69.
The sheet-anchor of the Deslauriers’ argument in favour of a stay was
that Hevron Heights was available as a ready means for GAM to execute its
judgment in full, since a sale would be bound to yield proceeds greatly in
excess of the judgment debt and interest, whereas the sale of Victoria Square
would not do so. It was submitted furthermore that recourse to Hevron Heights
was the contractually agreed method of execution, for the purpose of which GAM
had been granted a first mortgage. Reliance was placed upon a recent valuation
of Hevron Heights in the sum of TT$77m, as against a judgment debt and
interests currently standing at a little over TT$36m. It is not in dispute that
the sale of Victoria Square would only produce proceeds sufficient to pay the
judgment debt and interest in part.
70.
The principal difficulty with the Deslauriers’ case for a stay is that
Hevron Heights is a part completed development site, on which work ceased
several years ago, and about which there have since been widely differing views
as to its value. Since being forced to discontinue development works, the Deslauriers
had several years in which to attempt to achieve a sale, but without success.
Indeed, it appears that the TT$77m valuation was produced for the Deslauriers
in an effort by them to persuade a purchaser who had shown interest in buying
Hevron Heights plus 45 acres of further land for TT$54m to increase their
offer, but who thereafter withdrew.
71.
The Deslauriers had while developing Hevron Heights taken very
substantial sums by way of deposit from purchasers of individual units in the
aggregate exceeding TT$30m. Neither the likelihood of having to repay those
deposits nor the anticipated developers’ profit were factored into the TT$77m
valuation.
72.
Taken together, this evidence demonstrates to the Board’s satisfaction
that, far from constituting an asset available for early realisation in an
amount more than sufficient to pay the judgment debt and accruing interest,
Hevron Heights represented an asset with a very uncertain timetable for sale,
and with real doubts as to whether the net proceeds of realisation would in
fact repay the judgment debt and accruing interest in full.
73.
There is by contrast no similar uncertainty about the saleability of Victoria
Square. The fact that it is largely tenanted is no reason why it should not be
sold. Although it may be a matter of regret that the Deslauriers would thereby
lose a property which has been in their family for a long time, it is to be
borne in mind that the bulk of the loan made by GAM to the Deslauriers was to
discharge their previous indebtedness incurred in the development or
improvement of Victoria Square, rather than Hevron Heights.
74.
The effect of sections 5 to 8 of the Remedies of Creditors Act is to
give a judgment creditor the rights of an equitable chargee. As is fully
reflected in the mandatory terms of section 38, this does confer a prima facie
right to a sale for the purposes of payment or even part payment of the
judgment debt, unless the judgment debtor can show that it is, by other means,
in a position to redeem by making reasonably prompt payment. The Deslauriers
come nowhere near being able to show that. Nor is the evidence deployed in
opposition to an order for sale anywhere near sufficient to demonstrate that a
sale is not desirable, within the meaning of section 54.
Issue (iv): Reserved Price
75.
The final issue on this appeal is whether the judge’s decision to set a
reserve price for the sale of TT$16m should be interfered with by the Board.
The setting of a reserve price was, of course, one of those matters entrusted
to the judge’s discretion by section 38.
76.
The judge based his decision as to the reserve price upon a valuation
which had been obtained by GAM in February 2012, notwithstanding an earlier,
higher valuation proffered by the Deslauriers.
77.
The Court of Appeal declined to interfere with the judge’s discretion as
to the reserve price. The Board’s view is that it should not do so either. No
error of law in the judge’s approach to this issue is disclosed. In the light
of the difference of opinion as to value between the parties’ valuers, the
judge was entitled to choose the more recent but lower valuation for the purpose
of setting a reserve price. The Board’s view is that this was a matter pre-eminently
for the judge to be determined, as it was, in the local court, and that no
sufficient basis has been shown to support a conclusion that he was clearly
wrong in choosing the figure which he did.
Conclusions
78.
For the above reasons, the Board concludes that both the liability
appeal and the enforcement appeal must be dismissed. The parties should make
any submissions on costs in writing within 21 days of the handing down of this
judgment.
