Albury v Bank of Nova Scotia

• Jurisdiction: Bahamas
• Judge: Sawyer, J.
• Judgment Date: 27 July 1988
• Court: Supreme Court (Bahamas)
• Date: 27 July 1988
• Docket Number: Equity Side No. 375 of 1988

Supreme Court

Sawyer, J.

Equity Side No. 375 of 1988

Albury

and

Bank of Nova Scotia

Appearances

Dennis Gomez for plaintiff

Miss Leandra Esfakis for defendant

Practice and procedure - Application for declaration and relief by plaintiff in action relating to legal mortgage and charge — Application denied — Rules of the Supreme Court, O. 28, r. 4(2).

Sawyer, J.

1 This is an application by way of Originating Summons filed on April 14, 1988 on behalf of the plaintiff by which he seeks the following reliefs: –

• “l. A Declaration that upon the true construction of the Indenture of Legal Mortgage and Indenture of Further Charge the subject of these proceedings and in the events which have occurred the said Legal Mortgage and Further Charge have been wholly satisfied.

• “2. A Declaration that the original documents of title to the property the subject of this action now in the possession of the defendant are wrongfully held by the defendant and are not subject to any lien or encumbrance whatsoever.

• “.3. An Order that the defendant do execute Satisfactions of the aforesaid Indenture of Legal-Mortgage and Indenture of Further Charge, in favour of the plaintiff and do deliver the same together with the originals of all relevant documents of title in the possession of the defendant to the Plaintiff or as the plaintiff shall direct.

• “4. That the costs of this application be provided for.

• “5. That such further or other order may be made in the premises as to a the Honourable Court shall seem fit.”

2 An appearance was entered for the defendant the 9 ^th day of May, 1988; the first Notice of Appointment to hear the Originating Summons was filed May 11, 1988 and an affidavit sworn by the plaintiff was filed the same day. It appears that the Originating summons was not heard on the date then set - i.e. 2 ^nd May 1988.

3 An affidavit in reply was sworn on 2 ^nd June, 1988 by Bertel Ulric Holder and filed the same day.

4 On 17 ^th July, 1988, the Originating Summons was set for hearing in Chambers. At that hearing, Mr. Dennis Gomez, who appeared on behalf of the plaintiff, submitted that since the Legal Mortgage dated 3 ^rd June, 1981 and Further Charge dated 28 ^th October, 1981 had been repaid in March, 1985, they could not be resuscitated without a further agreement in writing that that should be so. Mr. Gomez also submitted that the agreed facts are that moneys were lent by the defendant to the plaintiff secured by the original Mortgage and that subsequently additional moneys were lent to the plaintiff which were secured by a further charge. Later, all moneys so secured were repaid and although keys were subsequently loaned to the plaintiff, there is no written evidence that the legal mortgage or further charge were to constitute the security for such further charge were to constitute the security for such further advances.

5 In support of his submissions, Mr. Gomez died on the following authorities: –

(i) Halsbury's Laws of England, 4 ^th Edition, Vol. 32 at p. 202 para. 431:

• “431. Extent of security created. Where the deposit of deeds is made for the purpose of obtaining credit, it will not cover money previously advanced and still due, unless an intention to cover it appears from the circumstances. A deposit will, however, cover extended, and notwithstanding that the original deposit was accompanied by a memorandum in writing limiting the purpose of the deposit; but it will not extend to an advance by a third person unless connected with some dealing with the estate, or to a subsequent advance made after a legal mortgage has been taken.”

(ii) Hooper, Ex parte 19 Ves. Jun. 477. In that case the Lord Chancellor [Eldon] said this:–

• “I say confidently, that there never was a case, where a man, having taken a mortgage by a legal conveyance, was afterwards permitted to hold that estate as farther charged, not by a legal contract, but by inference from the possession of the deed. The other cases have gone for (sic) enough, indeed too far; and I will not add to their authority, where there are circumstances distinguishing the case before me.”

• (iii) Fisher & Lightwood's “Law of Mortgage” 8 ^th Edition at p. 42: –

• “An equitable mortgage by deposit, although accompanied by a written agreement, may either be written or parole evidence, and also, as it seems, by inference alone arising from possession of the deed, be extended to further advances, even where changes have occurred in the depositee's firm. A legal security cannot be extended by such means to subsequent advances made on a parole agreement for a further mortgage,...