The National Commercial Bank of Grenada Ltd (Not a Party to the Appeal) Claimant v [1] Ian Francis [2] Juliana Francis Appellants/Defendants v [1] Renwick & Payne, a Firm [2] Margaret Blackburn [3] Michelle Emmanuel-Steele [4] Nigel Stewart Respondents/Ancillary Defendants [ECSC]

• Jurisdiction: Caribbean States
• Judge: EDWARDS, J.A.,Justice of Appeal
• Judgment Date: 05 February 2009
• Judgment citation (vLex): [2009] ECSC J0205-2
• Docket Number: HCVAP 2008/003
• Court: Eastern Caribbean Supreme Court
• Date: 05 February 2009

[2009] ECSC J0205-2

IN THE COURT OF APPEAL

Before:

The Hon. Mde Ola-Mae Edwards Justice of Appeal

HCVAP 2008/003

In the Matter of the Application of

Between:

The National Commercial Bank of Grenada Limited (Not a Party to the Appeal)

Claimant

and

[1] Ian Francis

[2] Juliana Francis

Appellants/Defendants

and

[1] Renwick & Payne, a Firm

[2] Margaret Blackburn

[3] Michelle Emmanuel-Steele

[4] Nigel Stewart

Respondents/Ancillary Defendants

On Written Submissions of

Mr. Dwight D. Horsford for the Appellants/Defendants

Mr. Gregory Delzin instructed by Renwick & Payne for the Respondents/Ancillary Defendants

Civil Appeal — Restrictive covenants — whether due diligence should have been exercised when giving legal advice —counterclaim — tort of negligence — limitation period — when a statement of case should be struck out — when is actual damage sustained — when does time run in tort —

This is an appeal against the decision to strike out the appellants' counterclaim against the claimant and the respondents on the grounds that the limitation period in which to bring an action in negligence had expired and that it did not disclose any reasonable grounds for bringing the claim. The appellants purchased a plot of land encumbered by restrictive covenants which prevented them from building a dwelling house on the property. The property was purchased with loan funds from the claimant bank. The first deed of conveyance was prepared and registered by the first respondent and the appellants were not aware of the restrictive covenants. Two other loans were subsequently obtained from the claimant bank to construct and complete a dwelling house on the property by the appellants. Further charges were prepared and registered by the first respondent for those additional loans taken in 1999 and 2002 respectively. The appellants alleged that upon their request for the loan in 1999 the claimant imposed a condition that the claimant's disbursement of funds would depend on the first respondent being instructed by the appellants to prepare a certificate of clear and unencumbered title to the land. In 2000 in another suit the court restrained the first appellant from further construction until trial whereupon the appellants ceased to pay their mortgage debt. The appellants' counterclaimed that the solicitors were under a duty to bring to their attention that the restrictive covenants would affect their right to build on the property and that they were negligent in the performance of that duty. The respondents' case is that the first appellant was aware since he was informed when the documents were read and executed at their offices when purchasing the property and they deny that they were negligent in any way in the discharge of their duty. Further they argue that the appellants are statute barred from bringing this claim.

Held: allowing the appeal, setting aside the decision to strike out the counterclaim and awarding costs and costs of the appeal to the appellants:

• 1. That the trial judge gave little or no weight to the date when the damage was sustained on the pleaded facts, and did not apply the correct principles in striking out the appellants' counterclaim.

• 2. That in a claim against a solicitor for negligent advice, actual damage is suffered when the advice is acted upon, such as by executing a document.

  Forster v Outred and Co . [1982] 1 WLR 86 cited

EDWARDS, J.A.

1 The appellants/defendants appealed against the decision of the learned judge made on 23^rd February 2007, to strike out the appellants' counterclaim against the claimant and the respondents dated 9^th June 2005, on the grounds that the limitation period within which to institute the appellant's cause of action for negligence had expired before the filing of the counterclaim; and the counterclaim discloses no reasonable grounds for bringing the claim. The judge's decision was made in keeping with the application of the respondents dated 23^rd September 2006.

2 The stated ground in the application was that the time for bringing an action for negligence has expired and the appellants are barred from bringing the counterclaim. The learned judge awarded costs in the sum of $1500.00 to the respondents.

3 The appellants argued in the court below that this issue of limitation is one of mixed fact and law requiring the production of evidence; and is therefore a triable issue not to be disposed of summarily on the respondents' application to strike out the counterclaim. They argued further on the authority ofRonnex Properties v Liang [1982] 3 All ER 9611 that the claim cannot be struck out on the ground of the expiration of the limitation period because this is a procedural defence which does not prevent the existence of a cause of action.

The Basis of the Counterclaim

4 The counterclaim was brought because the appellants had ceased paying their mortgage debts to the claimant bank, owing to court orders in 2 suits which they understood prohibited them from occupying the house they had built upon a plot of land owned by the first appellant which was subject to a mortgage in favour of the claimant bank.

5 These court orders were made because of existing restrictive covenants encumbering the plot. The restrictive covenants did not permit the appellants who are spouses to construct a dwelling house on their plot. The first appellant's plot was part of a larger parcel of land known as Lot 5 at Corinth Estate in the parish of St. David which was purchased by Mr. Simeon Francis from Mr. Elisha Baptiste under a registered conveyance in August 1992. Mr. Simeon Francis' deed of conveyance included restrictive covenants binding on him and his successors in title. One of these covenants stipulated that only one principal dwelling house of a specified size and value could be built on Lot 5. Mr. Simeon Francis subdivided Lot 5 and sold approximately one half of Lot 5 to Ms. Hyacinth Hypolite who had built a dwelling house on her portion. Thereafter, Mr. Simeon Francis sold the remaining portion of Lot 5 to the first appellant who bought his plot with loan funds from the

claimant bank in July 1997.

6 The first respondent is the firm of solicitors for the claimant bank while the other respondents are joined as partners in the said law firm. It is undisputed that the first respondent had received instructions from the first appellant for his purchase of the plot with the loan funds from the claimant. The first respondent had prepared and registered the first appellant's deed of conveyance dated 4^th July 1997 and the mortgage instrument.

7 The restrictive covenants which were binding on Mr. Simeon Francis and his successors were not disclosed in the Deed of Conveyance dated 4^th July 1997. The first appellant's deed merely referred to them as follows:

"TO HOLD the same UNTO and TO THE USE of the Purchaser in fee simple SUBJECT to the Covenants Restrictions and Stipulations contained in the said Conveyance so far as the same are still subsisting and capable of taking effect and affect the said hereditaments and the Purchaser with the object and intention of affording the Vendor a full and sufficient indemnity in respect of the said Covenants Restrictions and Stipulations and at all times indemnify the Vendor his heirs executors and administrators against all actions claims and demands whatsoever in respect of the said Covenants Restrictions and Stipulations or any of them so far as the same still exist and affect the said hereditaments hereby assured."

8 In 1999 the appellants obtained a second loan from the claimant to commence the construction of their dwelling house on their plot. In 2002 the appellants obtained another loan from the claimant bank to complete the construction of their house. The first respondent prepared and registered the further charges made on 19^th July 1999 and 26^th April 2002 for these additional loans.

9 Paragraph B7 of the appellants' statement of case alleges that in or about the month of July 1999, they requested from and were given a further loan by the...