Levers J
IN CHAMBERS
IN THE GRAND COURT OF THE CAYMAN ISLANDS
CAUSE NO: 566 of 2007
BETWEEN: KENT RANKIN PLAINTIFF
AND: ANTHONY SCOTT FIRST DEFENDANT
EDITH MARTIN SECOND DEFENDANT
LUCY EBANKS THIRD DEFENDANT
Before: The Honourable Madame Justice Levers
Appearance:
Mr. DaCosta and Mr. Young
Mr. Scott Wilson
Heard: 5 June 2008
JUDGMENT
Levers J.
Mr. Kent Rankin the plaintiff in this matter issued a writ which was served on the defendants on the 7th January 2008. On the 18th of January 2008 the defendants requested further and better particulars of the plaintiff's claim.
And on the 22nd February 2008 a formal request for further and better
particulars was served on the plaintiffs’ attorney. Application by the plaintiff for judgment in default was applied for on the 22nd February 2008. That application was not granted by the Registrar and in March 2008 an application for summary judgment was made by the plaintiff. On the 3rd of June 2008 a defence and counter-claim was filed without leave of the court (relying on the text of Miss Deborah Barker). The position taken was that until a summary judgment was entered there is no particular requirement for leave to be granted before filing a defence.
Whilst it is not particularly pertinent at this stage (this being an application for summary judgment) I believe it is important to clarify the issue as to the time within which a defence should be filed. Under Order 18 Rule 2 subsection (1):
"Subject to paragraph (2), a defendant who gives notice of intention to defend an action must, unless the court gives leave to the contrary, serve a defence on the plaintiff before the expiration of 14 days after the time limited for acknowledging service of the writ or after the statement of claim is served on him, whichever is the later.
Subsection 2 reads. If a summons under Order 14 rule 1, or under Order 86 rule 1, is served on a defendant before he serves his defence paragraph (1) shall not have effect in relation to him, unless by the order made on the summons he is given leave to defend the action and, in that case, shall have effect as if it required him to serve his
defence within 14 days after the making of the order or within such other period as may be specified therein”.
In my view I respectfully disagree with the interpretation of the text relied upon by Mr. Scott Wilson as paragraph 2 subsection (1) makes it mandatory to file a defence before the expiration of 14 days when notice to defend has been given. There is nothing in the Grand Court Rules that say that 14 days is subject to a judgment in default being entered.
This court however intends to look at the defence and counterclaim of the first and third defendants filed without leave in order to decide on the merits of the summary judgment application.
Reinforcing my view of the position is the fact that if the application is made for summary judgment after filing an acknowledgment of service but before filing a defence there is no need to file a defence before the hearing. After the hearing the court can give directions which will include providing a date for filing the defence. The defendants will however have to file evidence to show that they have a good defence.
The test for entering summary judgment is that:
(a) the claimant has no real prospect of succeeding in the claim or issue or that the defendant has no real prospect of success in defending the claim or issue and
(b) there is no other compelling reason why the case or issue should not be disposed of at a trial.
The burden of proof on an application for summary judgment, it appears was settled in ED and F Man Liquid Products Ltd. v. Patel, 2003 CPLR: Page 384. It rests on the applicant to prove that the respondent’s case has no real prospect of success.
An application for summary judgment is decided applying the test enunciated above, and having regard to the overriding objective of dealing with the case justly. The question whether there is a real prospect of success is not approached by applying the usual balance of probability standard of proof or whether there is a claim that is arguable.
In Swain v Hillman, 2001 AER 91. Lord Wolfe M.R. said the words “No real prospect of succeeding”, did not need any amplification as they spoke for themselves. The word real directed the court to the need to decide whether there was a realistic as opposed to a fanciful prospect of success. The phrase does not mean “real and substantial prospect of success” nor
does it mean that the summary judgment will not be granted unless the claim or defence is bound to be dismissed at trial. It is not a question of a mini trial being held on the evidence. It is simply summary hearings to dispose of the case where there is no prospect of success. In Swain (supra) The Master of the Rolls went on to say that summary judgment applications have to be kept within their proper role, they are not meant to dispense with the need for a trial where there are issues which should be considered at trial.
The defence on the merits could be for example:
(a) a substantive defence, (frustration illegality etc.) or
(b) a point of law destroying the claimant’s cause of action or
(c) a denial of the facts supporting the claimant’s cause of action or
(d) further facts answering the claimant’s cause of action.
An example of a triable issue is that the defendant was an agent rather than a principle.
In this case the first and third defendants have raised a point of law in addition to denying the facts. Whether the defences are fanciful or not is for the court to decide. The second defendant has vacated the premises and is no longer a necessary or relevant party to the proceedings. Where a clear cut issue of law is raised by way of a defence in an application for summary judgment, the court should decide it immediately. But where the point of law raised, is of some complexity and can only be argued relying on the
facts of the case then the court should be careful in entering judgment. It is only in a clear cut simple case that summary judgment should be allowed. In this case the defence relies on section 28 subsection (g) of the Registered Land Law 2004 Revision and The Succession law.
The Facts
The property in question is George Town Central Block 14 CJ parcel 5, which has been owned by Vernal Ebanks Clarke for some 30 years. It is alleged by the plaintiff that she had an absolute interest in the property until approximately 1983, when Phillip Beatman Ebanks was added to the register. The property was charged by Phillip with the consent of Vernal. At the time of Mr. Beatman Ebanks passing there were outstanding charges against the property, and Vernal Ebanks Clarke became responsible for these debts. It was therefore decided that that the property would be sold. The plaintiff became the purchaser of the property.
The plaintiff alleges that the defendants were permitted by licence to remain on the premises. Mrs. Edith Martin the second defendant has now vacated the premises. The defendants through their attorneys have filed several affidavits and draft defences and have made an issue of the fact that Mrs. Ebanks Clarke came into possession of the property by virtue of the Last Will and Testament of Mr. Luther Ebanks Junior, who appointed Mrs. Ebanks Clarke and Mr. Phillip Beatman as trustees of the relevant estate on behalf of the five children, who were the children of the Luther Ebanks Junior. One of those five children is the third defendant Lucy Ebanks.
The question that arises at this stage is, "Was Luther Ebanks Junior in a position to devise the land? Or could he have done so, and was he the legal beneficial owner of the land in order to have the capacity to do so?" Is this a fanciful defence? Or does it have a real prospect of success?
Another question that arises is whether a licence was in fact granted or needed to be granted by Mrs. Ebanks to the defendants. This is of course a question of fact and cannot be decided at this stage. The further question that arises out of the facts is whether in fact the first and third defendants waived their rights by accepting money or agreeing to do so in exchange for their interest? This argument is based on the fact that at the time of that sale Vernal Ebanks gave bank drafts to the various persons on the land and that this was as a result of an agreement and a promise to leave the premises. It is admitted by the third defendant Lucy Ebanks, that she did receive certain sums of money. But in her defence she alleges that she is now willing to give it back. The defendants argue however, that this was a gratuitous gift and that it does not negate the overriding interest that they have on the land.
An overriding interest is derived say from section 28 (g) of the Registered Land Law 2004 revision. It reads: "Unless the contrary is expressed in the register, all registered land should be subject to such of the following overriding interest as for the time being subsists and affect the same without there being noted on the register the rights of the person in actual occupation of land or in receipt of the rents and profits thereof save where enquiry is made of such person and the rights are not disclosed". It goes on, "Provided that the Registrar may direct registration of any of the liabilities, rights and interests hereinbefore defined in such manner as he thinks fit". The
defendants argue that this gives them an overriding interest as Mr. Rankin as the purchaser should have made enquiries of the persons on the land himself and prove that their rights were not disclosed.
There is however another element which must be looked at in this context and that is that Mr. Rankin was working through an agent, who Mr. Rankin alleges, assured him that the persons had agreed to leave on the basis of receipt of these cheques. A Mr. Anthony Scott who is the first defendant, now claims he is in fact willing to leave but that the value of the land is greatly under-rated and that if he receives a greater sum of money he will vacate the premises. The defendants argue that there is an arguable issue as to the veracity and effect of the cheques and these documents.
Mr. Scott Wilson for the defendants’ submission is that there is no reason to doubt the veracity of what the defendants are saying in this matter. That is not with respect, the criteria for summary judgment. The criteria is, “Is there a real defence or is the defence fanciful or is it a complex issue of law”.
I have to be satisfied under Order 14 that there is plainly no defence to the claim not which case I find more credible. I find there is in fact an arguable defence and that there are points of law which need to be argued. I therefore refuse the application for summary judgment.
I disagree with Mr. Wilson’s submission that the plaintiff instigated these proceedings knowing exactly what the first and third defendants’ claims were likely to be.
Therefore on the question of costs, I would normally invite the parties to make their submissions, but in this case in view of the defendants delay even
though they required further and better particulars to file a defence which they now have done without particulars, I make no order for costs. Each party must bear their own costs.
I also direct that the first and third defendants are given leave to file their defences within 14 days of the date hereof.
Dated this 5th day of June 2008
Judge of the Grand Court.