Neil Campbell v Lesia Rolle Campbell
| Jurisdiction | Bahamas |
| Judge | Mr. Justice Neil Brathwaite |
| Judgment Date | 29 August 2023 |
| Docket Number | 2019/CLE/gen/01643 |
| Court | Supreme Court (Bahamas) |
Before The Hon Mr. Justice Neil Brathwaite
2019/CLE/gen/01643
COMMONWEALTH OF THE BAHAMAS
IN THE SUPREME COURT
COMMON LAW & EQUITY DIVISION
Attorneys Stephanie D. Bowleg McKenzie and Alton McKenzie for the Plaintiff
Attorneys Sophia Thompson – Williams and Danielle Francis for the 2 nd and 3 rd Defendants
The Plaintiff and First Defendant are husband and wife who jointly entered into a mortgage agreement in or around 2013 with Teachers & Salaried Workers Co-operative Credit Union Limited (“TSWCCU”). The Plaintiff alleges that the terms of the mortgage provided for the Plaintiff and First Defendant to make equal monthly salary deductions to satisfy the mortgage. The Plaintiff alleges that his employer was consistent with the deductions to be applied to the mortgage. However, the First Defendant was not. The Plaintiff further alleges that the First Defendant completed an authorization for salary deductions form with her employer, the now Second Defendant in or about February 2014. Yet, no payment was made toward the mortgage loan on behalf of the First Defendant via salary deduction.
Notice of the default of the mortgage was provided to the First Defendant by TSWCUU via letters dated 12, 14, 16 June 2017 in which the entire amount of the mortgage was demanded. The amount of the mortgage outstanding was $388,215.93 and was demanded to be paid within a specified timeframe, otherwise, foreclosure proceedings would be commenced. An agent of the TSWCCU, InfoPort Global Ltd. prepared a notice to the Plaintiff via letter dated 18 October 2018, in which it demanded the payment of $407,975.24 of the mortgage arrears plus interest to be paid in full. On 11 March 2019, the TSWCCU wrote to the Second Defendant advising of its breach of the salary deduction agreement.
The Plaintiff commenced this action via Writ of Summons filed 19 November 2019. Initially, the TSWCCU was joined to the action as the Second Defendant but has since been removed as a Defendant in the matter. The Plaintiff asserts negligence, breach of contract, and breach of fiduciary duty against the Second Defendant and by extension, the Third Defendant under the Crown Proceedings Act. The Plaintiff alleges that the First Defendant breached the contract between herself, the Plaintiff and TSWCCU to repay her portion of the mortgage loan. The Plaintiff further alleges that the Second Defendant breached its fiduciary duty and negligently failed to make the salary deduction payments on behalf of the First Defendant to the TSWCCU, and failed to notify the TSWCCU promptly that no payments were being made on behalf of the First Defendant. The Plaintiff claims general damages as a result of injury to his creditworthiness and special damages comprising of funds from his credit account with TSWCCU which were applied to the mortgage loan in the amount of $24,364.08, investment made by him in the mortgaged property of $150,000.00, and funds paid on the mortgage loan in the amount of $83,339.20.
The Second and Third Defendants filed a Defence on 12 April 2021. In the Defence, the Defendants stated that the Plaintiff and First Defendant are jointly and severally liable for the repayment of the mortgage loan and had the duty to ensure that the payments were made to the TSWCCU. The Third Defendant does not deny the receipt of the salary deduction authorization form. However, they posit that a process must be completed before the salary deduction is made. The Second and Third Defendants asserted that the loss which the Plaintiff suffered was a result of his own failure to pay the mortgage and to do all that was possible to ensure that it was paid and/or remedy the default after receipt of the demand letter. The Second and Third Defendant deny every allegation and claim contained in the Writ of Summons.
The Summons before me was filed by the Second and Third Defendants' Summons on 16 December 2021 to strike out the Plaintiff's Writ of Summons, on the ground that it discloses no reasonable cause of action pursuant to Order 18 Rule 19(a) Rules of the Supreme Court (“RSC”). There lies a Summons by the Plaintiff filed 3 December 2021 to amend the Writ pursuant to Order 20 Rule 5 RSC. As indicated at the 10 March 2022 hearing, the adjudication of the Plaintiff's Summons is contingent on the success of the Second and Third Defendants' Summons, which I will now turn to consider.
The Second and Third Defendants assert that the Plaintiff's Writ discloses no reasonable cause of action against them and thus there is no chance of success. They rely on B.E Holdings Ltd v Piao Lianji 2014/CLE/gen/01472 and Cartwright v Just Dance Ltd. 2016/CLE/gen/00698 in support of this application. It is their position that there was no agreement between the Plaintiff and the Second and Third Defendant, and therefore, they have no duty to the Plaintiff that was breached. They contend that the Plaintiff and First Defendant entered into an agreement with the TSWCCU, to which they were beholden jointly and severally to make payments pursuant to the agreement. The Second and Third Defendants deny any involvement or knowingly assisting the First Defendant in committing fraudulent actions. The Second and Third Defendants cited Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378, who stated that “dishonesty is a necessary ingredient of accessory liability”. The Second and Third Defendants submit that the Plaintiff must show that as a third party, they acted dishonestly, which they deny doing, and of which they say there is no evidence.
The Second and Third Defendant submitted:
“19. The 3 rd and 4 th Defendants (now 2 nd and 3 rd Defendants) submit that they did not act in dishonest assistance with the 1 st Defendant and did not commit any fraud. The Plaintiffs' claim is misconceived as the contract for payment of the mortgage was the Plaintiff, the 1 st Defendant and the TSWCCU. The Plaintiff and the 1 st Defendant were jointly responsible in ensuring that their mortgage payments were made monthly. The Plaintiff and the 1 st Defendant had every right to act with due diligence in requesting a confirmation or proof of payment from the 2 nd Defendant (now TSWCCU) at all times. TSWCCU also had every right to act with due diligence to request information from the RBPF and they did not do so promptly, some 5 years and one month after. The 1 st Defendant brought a Salary Deduction form to the payroll section of the RBPF in March 2014 and TSWCCU sent their first letter notifying the RBPF on 11 April 2019. The deductions were subject to other considerations.
20. At all times, the 3 rd and 4 th Defendants (now 2 nd and 3 rd Defendants) acted honestly in that the 1 st Defendant's full salary was paid to her, evidenced on pay slips, and no money was kept or received by the 3 rd or 4 th Defendants. It was for the 1 st Defendant and the Plaintiff who were jointly responsible for the agreement, to adhere to the performance of the agreement.
….
26. The Plaintiff alleges that the 3 rd and 4 th Defendants (now 2 nd and 3 rd Defendants) breached their fiduciary duty in not carrying out the salary deduction of which they were authorized to do. The Defendants submit that the Plaintiff's claim in this regard is misconceived and in no way would the authorization form completed by the 1 st Defendant incite a contractual agreement between them. Further, the authorization form is a consent provided by the employee to the employer and not one where the Plaintiff is entitled to the reliefs sought.”
The Second and Third Defendants contend that for these reasons the Plaintiff's Writ discloses no reasonable cause of action against them and has no chance of success. Thus, the portion of the Writ with claims against the Second and Third Defendant should be struck out and they be removed as parties to the proceedings.
As it relates to the Plaintiff's application for leave to amend the Writ of Summons, it is the Second and Third Defendants' position that the Plaintiff's draft amended Writ, raises no other cause of action against the Second and Third Defendants. They reiterate that they held no funds or property on behalf of the First Defendant and therefore could not be liable for a breach of constructive trust, neither did they knowingly assist in any fraudulent activity on behalf of the First Defendant and could not be held liable. As such, the Second and Third Defendants assert that the Plaintiff's claim discloses no reasonable grounds and it would be a waste of the Court's time to allow such amendment as against the Second and Third Defendants.
The Plaintiff relies on the draft amended Writ of Summons contained in the Affidavit in Support of the Summons filed 3 December 2021, to amend the initial Writ. In the proposed amendments, the Plaintiff claims that the Second Defendant was a constructive trustee over the portions of the First Defendant's salary pledged to satisfy the mortgage pursuant to the salary deduction agreement. In failing to make the deductions, the Plaintiff claims that the Second Defendant knowingly assisted the First Defendant in committing fraud against the Plaintiff and breached the constructive trust. The Plaintiff credits his loss to the Second Defendant and by extension the Third Defendant under the Crown Proceedings Act. The Plaintiff relies on Agip (Africa) Ltd. v Jackson (1989) 3 WLR 1367 in which the Court clarified that a stranger to a trust will be liable to account as a constructive trustee if he knowingly assists in the furtherance of a fraudulent and dishonest breach of the trust. The Plaintiff asserts that the Second Defendant was fixed with knowledge of the First Defendant's...
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