Chase Manhattan Bank N.A. v Kaffka et Al

• Jurisdiction: Anguilla
• Judge: Robotham, J.A.
• Judgment Date: 10 July 1984
• Neutral Citation: AI 1984 CA 1
• Docket Number: Civil Appeal No. 1 of 1980
• Date: 10 July 1984
• Court: Court of Appeal (Anguilla)

Court of Appeal

Peterkin, C.J., Robotham and Berridge, JJ.A.

Civil Appeal No. 1 of 1980

Chase Manhattan Bank N.A.

and

Kaffka et al

F. Kelsick for The Chase Manhattan Bank N.A.

Dr. W. V. Herbert for David C. Berglund

F. Field for Johannes H. Kaffka

Statute - Interpretation — Aliens Land Holding Act. Regulations Act, Cap 102, ss. 3 and 4 — Registered Land Ordinance, 1974 s.4(1)

Real property - Mortgage — Priority.

Facts: This was an appeal from a decision of the trial judge that the defendant creditor Kaffka be paid in priority to two other creditors, The Chase Manhattan Bank and Berglund. On appeal the issue was whether mortgage of Kaffka was enforceable notwithstanding the fact that there was no valid licence enabling him to hold the mortgage as required by the Aliens Land Holding Regulations Act, Cap. 102.

Facts: This was an appeal from a decision of the trial judge that the defendant creditor Kaffka be paid in priority to two other creditors, the Chase Manhattan Bank and Berglund (B). On appeal the issue was whether the trial judge erred in law in holding that the mortgage of Kaffka was enforceable notwithstanding the fact that there was no valid licence enabling him to hold the mortgage as required by the Aliens and Land Holding Regulations Act, Cap 102

Held: The legal effects of sections 3 and 4 of the Act was that Kaffka, by failing to register the licence, remained an unlicenced alien and could not pray in aid section 4(1) of the Registered Land Ordinance, 1974 to assist him in holding or enforcing the mortgage. Further it was held that Kaffka'ssecurity was unenforceable and consequently both the Bank and Berglund would in that order rank in priority over him for the settlement of their claims. The appeals were allowed and an order made that the claims of the Bank would rank in priority to that of any other claimants and that Berglunds’ claim be paid after that of the bank.

Held: The legal effect of sections 3 and 4 of the Act was that Kaffka by failing to register the licence, remained an unlicenced alien and could not pray in aid section 4 (10) of the Registered Land Ordinance 1974 to assist him in holding or enforcing the mortgage. Further it was held that K'sSecurity was unenforceable and consequently both the Bank and B would in that order rand in priority over him for the settlement of their claims. The appeals were allowed and an order made that the claims of the Bank would rank in priority to that of any other claimant and that Berglunds's claim be paid after the Bank's.

Robotham, J.A.

1 Paul Randall and his wife Vera (both deceased) were the owners of a parcel of land consisting of approximately six acres with a building thereon situate at Maundy'sBay, Anguilla. This land was acquired by the Government of Anguilla on November 10, 1978 under the provision of the Land Acquisition Ordinance, Cap. 273, and the compensation payable was on July 21, 1979, assessed at $340,000.00 E.C. (Three hundred and forty thousand dollars Eastern Caribbean currency).

2 On February 26, 1980, a Judge in Chambers heard together three applications brought by the Chase Manhattan Bank, N.A. Johannes Kaffka, and David Berglund, each of whom respectively were creditors of the Randalls with a view to determining their priorities for payment out of the sum of $340,000.00 E.C. (three hundred and forty thousand dollars Eastern Caribbean currency). This sum was inadequate to satisfy the claims of all three creditors, hence the applications.

3 On March 5, 1980, the learned judge ordered that the creditors should rank as follows:

• (1) That the applicant Johannes Helmut Kaffka should receive payment paramount to the other creditors and be paid the equivalent in Eastern Caribbean currency of $48,000.00 U.S. (forty-eight thousand dollars United States currency) plus simple interest at 9% (nine and one half per cent) per annum from May 23, 1972 to November 10, 1978 and thereafter interest at 4% (four per cent) until the date of payment.

• (2) That the Chase Manhattan Bank N.A. should be paid, after Kaffka'sclaim had been satisfied the equivalent in Eastern Caribbean currency of $24,602.78 U.S. (twenty-four thousand six hundred and two dollars and seventy-eight cents United States currency) and $62.00 (sixty-two dollars) cost plus interest at 5% (five per cent) per annum from March 19, 1974 to November 10, 1978 and thereafter at 4% (four per cent) until the date of payment.

• (3) That in respect of the appellant Berglund, his claim should be satisfied after payments had been made to Kaffka and the Bank respectively. His claim was for $88,781 U.S. (eighty-eight thousand seven hundred and eighty-one dollars United States currency) plus interest.

4 It is from this order that the Bank and Berglund have appealed to this court, but before dealing with the crux of the appeal the circumstances which gave rise to the debtor/creditor relationship in each case ought to be examined, starting with the Bank.

5 The Chase Manhattan Bank N.A.: On March 19, 1974, the bank obtained a judgement in the High Court of Anguilla in Suit No.4 of 1974 against the Randalls for the sum of $24,602.78 U.S. (twenty-four thousand six hundred and two dollars and seventy-eight cents United States currency) and costs $62.00 (sixty-two dollars). On September 10, 1974 the bank further filed in the High Court an application for the sale of the land of the Randalls at Maundy'sBay under section 4 of the Judgments Act, Cap.37, and a charge upon the land was thereby created under section 3.

6 On September 13, an order for sale was made. Pursuant to the order for sale, on September 1, 1976, the land was sold to one Dr. Norton Brod for the sum of $336,000.00 E.C. (three hundred and thirty-six thousand dollars Eastern Caribbean currency) by the Provost Marshal for Anguilla. This sale proved abortive because the Government of Anguilla refused to grant Dr. Brod an Aliens Land Holding Licence required under the Aliens Land Holding Regulation Act, Cap. 102. Notice of a second sale was given for February 3, 1978. This sale never tools place and the land was thereafter acquired by the Government.

7 Johannes Helmut Kaffka: This claimant is a German National and as such an alien to Anguilla. Before he can hold land in the State, or a mortgage on land, he must first be in possession of a valid licence issued under the provisions of section 4 of the Aliens Land Holding Regulation Act, Cap. 102 (now replaced by the Aliens Land Holding Regulation Ordinance, 1976 — No. 12 of 1976).

8 On May 23, 1972, Kaffka gave on the Randalls' property at Maundy'sBay a mortgage to secure a loan of $48,000.00 U.S. (forty-eight thousand dollars, United Sates currency) with interest at the rate of 9%(nine and one half per cent) Per annum. This was repayable on May 24, 1977.

9 It was registered in the Record Office on May 24, 1972, in Liber D Vol.4 Folio 839 to 852. There does not seem to be any dispute that at the time of this mortgage, Kaffka had been granted an aliens...