Gateway Ascendancy Ltd v Bobbie Shanell Ferguson

• Jurisdiction: Bahamas
• Judge: Fitzcharles, J.
• Judgment Date: 15 November 2024
• Docket Number: Claim No. 2013/CLE/gcn/00869
• Court: Supreme Court (Bahamas)

In the Matter of property comprised of a Mortgage dated the 25 ^th day of April, A.D., 2003 between Bobbie Shanell Ferguson (Borrower) and Kevin R. Ferguson (Guarantor) and Scotiabank (Bahamas) Limited (Mortgagee) of record in the Registry of Records in the City of Nassau in the Island of New Providence in Volume 8954 at pages 392 to 411

And in the Matter of the Conveyancing and Law of Property Act, Chapter 138 of the Revised Statute Laws of the Commonwealth of The Bahamas

Between

Gateway Ascendancy Ltd

Plaintiff

and

Bobbie Shanell Ferguson

Kevin R. Ferguson

Defendants

Before:

The Honourable Madam Justice Simone Fitzcharles

Claim No. 2013/CLE/gcn/00869

IN THE SUPREME COURT

Common Law and Equity Division

Appearances:

Ms Candice Hepburn for the Claimant

Mrs Romona Farquharson with Mr Samuel Taylor for the Second Defendant

RULING

Fitzcharles, J.

The Application

1 This is an application on a preliminary point brought by Mr Kevin Ferguson, the Second Defendant, to strike out the case of Gateway Ascendancy Ltd, the Claimant, for an alleged failure to comply with s 4(1) of the Homeowners Protection Act 2017 (“HPA”) and for abuse of the process of the Court.

2 The point in limine was introduced before the commencement of the hearing of the substantive application of the Claimant brought by way of Originating Summons filed on 10 May 2013. That substantive application has been brought by the Claimant as a mortgagee who seeks judgment and an Order for vacant possession of the referenced property and to exercise a power of sale pursuant to an Indenture of Mortgage dated 25 April 2003 (the “Mortgage”). The Claimants seek such relief upon the occurrence of events of default on the part of Mrs Bobbie Shanell Ferguson, the First Defendant, as mortgagor and the Second Defendant as guarantor in the Mortgage.

3 On 30 May 2023 the Court gave directions for the filing of evidence and submissions and set the matter to commence on 14 September 2023. The Second Defendant relied upon his Affidavit filed on 5 December 2015, the Second Defendant's Point In Limine Submissions and the Second Defendant's Response to Plaintiff's Supplemental Submissions. The Claimant filed the Supplemental Affidavit of Tamika Thompson on 19 October 2023, proffered Skeleton Arguments and Supplemental Skeleton Arguments, and also relied upon the Affidavit of Kelvin Briggs filed on 10 May 2013.

Relevant Events

4 The facts in this matter are for the most part undisputed, except where the parties are at odds over whether the Second Defendant was aware of the demand letter served on the First Defendant on 12 November 2012 (Exhibit ‘KB3’ of the Affidavit of Kelvin Briggs). The facts salient to this application are set out below.

5 On 25 April 2003, Mrs Ferguson and Mr Ferguson, then a married couple, entered into the Mortgage with Scotiabank (Bahamas) Limited (the “Bank”). Mrs Ferguson was the Borrower or Mortgagor in the transaction and Mr Ferguson entered into the Mortgage as Guarantor. Mrs Ferguson borrowed the sum of $ 125,000 and agreed to repay the Bank the sum borrowed plus interest at the rate of 8.250%. Mr Ferguson conveyed the collateral under the mortgage, Lot 57 Mayfield Park Subdivision in Freeport, Grand Bahama with a duplex dwelling thereon. As Guarantor, Mr Ferguson agreed to repay the Borrower's debt in the event she defaulted on her loan obligation to the Bank. In his Affidavit, Mr Ferguson confirmed his understanding of this term.

6 After making some repayments towards the loan, Mrs Ferguson, the Mortgagor, defaulted. As at 5 April 2013 $7,777.87 in principal had been repaid leaving a balance of $120,827.48 due. As for interest, $91,086.67 had been repaid leaving a balance due of $6,275.35. In the time following, the Claimant's position has consistently been that both of the Defendants have failed to ensure that the Mortgage is brought up to date.

7 By letter dated 12 November 2012, Halsbury Chambers (then attorneys for the Bank) sent a demand for payment of the outstanding loan amounts to the Mortgagor. The letter, in addition to containing a demand for payment, set forth the total amount due with an itemization of how the sum was comprised. It contained an explanation of the consequences of default and gave the Mortgagor a 14 day time period within which to pay. It set out requirements of the Bank for proof of current property and life insurance from the Mortgagor, the method by which payments were to be made and contact information for Counsel, should the Mortgagor wish to discuss the matter.

8 On 2 January 2013 Counsel for the Second Defendant, Messrs McDonald & Co wrote to Counsel for the Bank. On 9 January 2013, the Bank's attorney responded to the Mortgagor's Counsel stating that the Bank was prepared to meet with Mr Ferguson to discuss the matter. Names and contact details of relevant persons in the Bank were furnished to Mr Ferguson's Counsel for that purpose.

9 Some months later on 10 May 2013, the Bank filed its Originating Summons and thereby commenced proceedings against the Mortgagor and Guarantor for default in making mortgage payments. The Originating Summons was supported by the Affidavit of Kelvin Briggs (the “Briggs Affidavit”) also filed on 10 May 2013. The Second Defendant avers that there is no evidence that the Briggs Affidavit was served on him. However, the Second Defendant made a one-time lump sum payment to the Bank of $10,000 towards the outstanding loan amount.

10 Following this, it appears that at some point between 2013 and the end of 2015, the Bank released the salary deduction payment of the First Defendant Mortgagor's salary. The Second Defendant complained that he was not made aware of this until after it was done. Further, Mr Ferguson stated that when he enquired of the Claimant how it could be done without a court order, personnel of the Claimant explained that he was not the Borrower so they could not provide that information to him. The Claimant, on the other hand, stated that they did not require a court order to release the Borrower's salary from deduction. Moreover, the Claimant believed that Mr Ferguson knew about the release of his wife's salary deduction and her default in paying. There were numerous discussions to settle the matter which bore no fruit.

11 On 11 March 2014, Mr Ferguson and Mrs Ferguson filed a Summons supported by their joint Affidavit to have the file of this matter transferred to the Northern Region on the grounds that the Northern Region was the place of their residence and of the mortgaged property.

12 The Bank, on 6 July 2016, renegotiated the payment of the loan with the Mortgagor and the Guarantor, which both the First Defendant Mortgagor and the Second Defendant Guarantor signed in agreement.

13 On 31 October 2016 the Bank assigned and transferred the Mortgage to Gateway Financial Ltd by Deed of Transfer.

14 On 2 November 2016 Counsel for Mr Ferguson again wrote to Counsel for the Claimant requesting more time for Mr Ferguson to pay off the loan and explaining that he expected to receive payments from the Ministry of Works which exceeded the amount due and owing under the Mortgage. The Claimant at that time refrained from taking further action.

15 On 19 February 2018, Gateway Financial Ltd assigned and transferred the Mortgage to Gateway Ascendancy Ltd. by Deed of Transfer. On 18 June 2021 the Claimant filed a Notice of Intention to Proceed after the expiration of 1 month. Mr Ferguson avers that there is no evidence that he was served with this Notice.

16 The Claimant obtained leave to amend its Originating Summons to reflect the name of Gateway Ascendancy Ltd as Claimant in place of Scotiabank (Bahamas) Limited. The Claimant filed its Amended Originating Summons on 19 July 2021 and served the same on the Second Defendant Guarantor personally on 9 September 2021. Resultantly, Mr Ferguson, who was then represented by Messrs RA Farquharson & Co, entered a regular Memorandum of Appearance and Notice of Appearance on 01 October 2021.

17 The Amended Originating Summons was served on the First Defendant Mortgagor, with the leave of the Court, by substituted service, as between July and September 2021 the Claimant learned that Mrs Ferguson had relocated from Freeport, Grand Bahama to West Palm Beach, Florida, USA. Mrs Ferguson has not participated in this application.

Issues

18 The disposal of this application required the Court to consider three primary issues, namely —

• (1) whether the Claimant was required to comply with s. 4(1) of the HPA and failed to do so with the result that this action ought to be struck out;

• (2) whether the action ought to be struck out on the basis that Claimant has abused the process of the Court in failing to serve a notice pursuant to HPA s 4(1) and a Notice of Intention to Proceed on the Second Defendant; and

• (3) whether costs ought to be awarded to the Second Defendant.

Second Defendant's Submissions

19 The Second Defendant pursues his preliminary point to strike out this claim and recover costs on the strength of the following arguments:

• (1) contrary to s. 4(1) of the HPA, the Claimant failed to personally serve the Defendants with a notice stating the matters set out in that provision, before it instituted legal proceedings against the Defendants for default of payment;

• (2) the Claimant abused the process of the Court and did not have “clean hands” in that it by-passed HPA s 4(1) and in so doing failed to provide notice of its intention to commence legal proceedings against the Mortgagor;

• (3) when the Amended Writ was filed it “practically started this matter afresh” with a new Claimant, and as such, the Claimant Mortgagee ought to have served a new demand letter upon the Second Defendant Guarantor which complied with s 4(1);

• (4) albeit this action was commenced in 2013 and the HPA came into force years later, the HPA must be applied...