Supreme Court
Action Nos. 74 & 75 of 1982
22nd July, 1982
Alcantara, J.

Mr. Dean Lindo for the Plaintiffs
Mr. Glenn Godfrey for the Defendants

Declaration - Mortgage - Exercise of Power of Sale by Mortgagee - Execution of Deed by Plaintiff - Plaintiff estopped by deed from denying Status of Defendant.

J U D G M E N T

At the request and with the consent of counsel both the above actions were heard together on the 12th July, 1982. I dismissed the plaintiffs' case and gave judgment for the respective defendants on their Counterclaims. I informed the parties that I would be giving my reasons for decision at a later date. This I now proceed to do.

Although the facts in both cases are practically similar and the legal arguments more or less identical I prefer to deal with one case first and then apply the result of that one to the other.

I will deal first with Action 75 of 1982, Belize Orange Hotel Ltd. v Harry Jolkower and Edward Nabil Musa Sr. Counsel for the plaintiff did not adduce any evidence but relied entirely on a number of documents which were admitted by the Defence. The Defence did call witnesses and adduce further documents both to challenge the plaintiff and to support their Counterclaim.

If I set out the relevant documents first in chronological order the issue will become clearer.

The first document (hereinafter called Document A) is a Deed of Mortgage dated the 9th May, 1973 "Between Suncit Ltd. a company duly incorporated in British Honduras whose registered office is situate at Cemetery Road, San Ignacio in the Cayo District (hereinafter called the Mortgagor) of the One Part and Melvin J. Haber of 119 East Flagler Street, Miami Florida on the United States of America Trustee (hereinafter called the Mortgagee) of the Other Part."

Nothing arises out of this mortgage which was in proper form, except for the word 'Trustee' in describing the mortgagee.

The second document (hereinafter called Document B) is a Deed dated 31st May, 1978 "Between Harry Jolkower of 107 N.E. 25th Street, Miami, Florida one of the United States of America (hereinafter called the Trustee) of the first part, Melvin J. Haber of 119 East Flagler Street, Miami, Florida, aforesaid (hereinafter called the Mortgagee) of the second part and Suncit Limited a private company duly incorporated in Belize and having its registered office at Golden Orange Hotel, San Ignacio in the Cayo District of Belize (hereinafter called the Mortgagor) of the third part."

This document which was duly executed and registered purported to change the terms of the original mortgage (Document A). Nothing arises out of that, but the third recital reads as follows:

"(iii) The Mortgagee has been replaced as Trustee of the said Mortgage by the Trustee under and by virtue of an order made on the 23rd February, 1978 in the Circuit Court of the 11th Judicial Circuit of Florida (Case ….)".

The third document (hereinafter called Document C) is a Deed of Conveyance dated 30th November, 1978 between Suncit Ltd. and the plaintiff whereby the property mortgaged was transferred to the plaintiff. In paragraphs (i) and (iii) of the recital of this conveyance Documents A and B are referred to. There is no doubt that the plaintiff bought with notice.

The fourth document (hereinafter called Document D) is a Deed dated 14th March, 1981 "Between Harry Jolkower as Trustee of 1830 Embassy Drive, Apt. 409, West Palm Beach, Florida 33401, one the United States of America (hereinafter called "the Mortgagee") of the one part and Golden Orange Hotels Limited a private company incorporated in Grand Cayman, Cayman Islands and having its registered office at P.O. Box 237, Grand Cayman, Cayman Islands (hereinafter called "the Mortgagor") of the other part." In the Recitals Document A is referred to in paragraph (i). Recital (iii) of Document B is repeated in paragraph (iii) and Document C is referred to in paragraph (iv).

The fifth document (hereinafter called Document G) is an Agreement for the Sale of the property referred to in the Schedule to Document A. It is dated 26th February, 1982 and it is entered "Between Harry Jolkower as Trustee of 1830 Embassy Drive, Apt. 409, West Palm Beach, Florida 33401, one of the United States of America (hereinafter called "the Vendor") of the one part and Edward Nabil Musa of Belize City, Director (hereinafter called "the Purchaser") of the other part."

Nothing arises out of this exercise of the power of sale by the mortgagee. The plaintiff agrees that the mortgagee was entitled to exercise his power of sale of the property to the 2nd defendant provided and provided always that Harry Jolkower was entitled by law so to do.

It is admitted by the plaintiff that if Harry Jolkower, the first defendant was a properly constituted mortgagee he was entitled to sell and that consequently the second defendant is entitled to possession of the property.

The plaintiff is claiming a declaration that the purported sale was contrary to law and null and void and that it should be set aside and an injunction restraining the defendants from completion.

The plaintiff's case is made clearer in his Statement of Claim where he is asking the Court for -

"(1) A declaration that the first-named defendant is not a proper mortgagee and therefore not entitled to exercise the power of sale contained in the said mortgage."

There is little merit in the plaintiff's case. He is not seeking to prove that the sale was contrary to Section 81 of the Law of Property Ordinance or that he has paid the money owing on the mortgage or even tendered it. Neither is he seeking any relief such as equitable redemption. He is just seeking to set the agreement for sale aside on purely legal grounds. I can only assume that his strategy is to gain time. If he can take advantage of a technicality I would not deny him his legal rights.

The plaintiff's argument is simplicity itself. What he is saying is that as there has not been a proper assignment of the mortgage from Haber to Jolkower how can Jolkower become mortgagee and exercise the power of sale contained in the mortgage. At first sight his argument appear unanswerable, but in Document D Jolkower appears as the Mortgagee. Is not the plaintiff estopped also from denying the status of Jolkower when the plaintiff executed that document which also recited the replacement of Haber for Jolkower as trustee?

The answer is yes on the principle of Estoppel by Deed. The matter is dealt with clearly in Halsbury's Laws of England 3rd Edition Vol. 15 at pages 214 and 215:

"Estoppel by deed is based on the principle that when a person has entered into a solemn engagement by deed under his hand and seal as to certain facts, he shall not be permitted to deny any matter which he has so asserted. It is a rule of evidence according to which certain evidence is taken to be of so high and conclusive a nature as to admit of no contradictory proof. The averment relied upon to work an estoppel must be "certain to every intent" without any ambiguity, but may be contained in the recital or in any part of the deed.

A person is bound by the recitals in a deed to which he is a party whenever they refer to specific facts, and are certain, precise and unambiguous."

and further at p. 217 Halsbury has this to say:

"When a recital is intended to be a statement which all the parties to a deed have mutually agreed to admit as true, it is estoppel upon all, but when it is intended to be the statement of one party only, the estoppel is confined to that party. The intention is a question of construction in each case."

Counsel for the defendants has referred me to Cross on Evidence 4th Edition at p. 400 and to Bowman v. Taylor (1834) L.J.K.B. 58 for the proposition that the principle of estoppel by deed applies to recitals in a deed. The rule has been further re-affirmed by Lord Maugham in the case of Green v. Kettle (1938) A.C. 156 AT P. 171:

"Estoppel by deed is a rule of evidence founded on the principle that a solemn and unambiguous statement or engagement in a deed must be taken as binding between parties and privies and therefore as not admitting any contradictory proof."

The plaintiff's argument is that the recital in Document B is not clear or unambiguous. Counsel has referred me to District Bank Ltd. v. Webb & Others (1958) I W.L.R. 148, but with due respect that case has no applicability to the present one.

On the construction of the documents I find the following facts:

1. In Document A Melvin J. Haber was the Mortgagee, but his description as Trustee makes it obvious that he is holding the legal estate beneficially on behalf of another or others. There is not ambiguity there.

2. Neither is there any ambiguity in the statement in Document B that Melvin J. Haber has been replaced by Harry Jolkower as Trustee and consequently as mortgagee.

3. In Document C Harry Jolkower is described as Mortgagee. No ambiguity there.

I therefore find that the plaintiffs are bound to accept not only that Harry Jolkower was the mortgagee at the relevant date but that he had the powers of the mortgagee. He was entitled to sell the property and give possession to the second defendant.

That could well be the end of the case had not the Defence taken a very simplistic approach which I cannot leave unanswered. The Defence admits that there was no assignment of the mortgage, but merely a replacement of the Trustee. As far as I am aware there are only two ways in which Harry Jolkower could have replaced Melvin J. Haber. Either by a Deed of Assignment of the mortgage or by a Vesting Order under the Laws of Trusts replacing one Trustee for the other. It is not clear whether the order made on the 23rd February, 1978 in the Circuit Court of the 11th Judicial Circuit of Florida amounted to a Vesting Order. Neither is it clear whether, if it was, it has any validity in Belize under the rules of Private International Law. The matter was not argued so I am not really called upon to give my views. In any case it does not help the plaintiff as he is bound by my finding that he is estopped by Deed. However, the matter is not merely of academic interest as when the time comes for the conveyance of the property to be executed by the 1st defendant to the 2nd defendant the Vesting Order might be a requisite document to perfect the legal title to the land.

I now turn to Action 74 of 1982, Agricultural Industrializations Promotions Limited v. Harry Jolkower and Edward Nabil Musa Sr.

The plaintiff is seeking the same remedy as in the previous action and his submissions are the same.

There was a mortgage dated 9th May, 1973 between Suncit Ltd. as Mortgagor and Melvin J. Haber as Mortgagee, Haber describing himself as Trustee.

Then there was a Deed dated 31st May, 1978 similar in terms to Document B in the previous action reciting the replacement of Trustee.

This was followed by Deed dated 14th March, 1981, similar in terms to Document D in the action, together with a Deed of Conveyance of same date between Suncit Ltd. and the present plaintiff.

There is also an Agreement for Sale between the 1st and 2nd defendant in respect of another property which is described in the Schedule of the Mortgage dated 9th May, 1973.

In this case I also apply the principle of estoppel by deed and dismiss the plaintiff's claim. I find for the defendant on the same grounds as in the previous action.

In their Counterclaim the defendants on both actions are claiming:

Although the plaintiff in both cases has refused to give up possession voluntarily on the strength of the notice they received about the sale it is premature to even consider the question whether an injunction should issue.

On the question of damages I would like to hear further arguments on the matter, particularly on how they should be assessed for two reasons. The plaintiffs have not really argued the issue and the evidence adduced by the defendants is such that the Court would only be able to hazard a guess. This is not desirable. Consequently I have given the defendants liberty to apply, should they feel an application is necessary.

At the hearing I gave judgment for each of the defendants in the following terms:

Plaintiff's claim in both actions dismissed. Judgment for the defendants on their Counterclaim in both actions. Possession within 7 days to the 2nd defendant in both actions of the land described in the Schedule to the Conveyance dated 30th November, 1978 in respect of Action 75 of 1982 and the Schedule to the Conveyance dated 14th March, 1981 in respect of Action 74 of 1982. Liberty to apply for assessment of damages and for an injunction should the need arise. Costs for the defendants in both actions.

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