Paul Rey v Hugo Rey

• Jurisdiction: Anguilla
• Judge: Sandcroft, M.
• Judgment Date: 31 March 2020
• Neutral Citation: AI 2020 HC 9
• Court: High Court (Saint Christopher, Nevis And Anguilla)
• Docket Number: Claim Number: AXAHCV2019/0049
• Date: 31 March 2020

EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

(CIVIL)

Claim Number: AXAHCV2019/0049

Between:

Paul Rey

Claimant/Respondent

and

Hugo Rey

Defendant/Applicant

Appearances:

Mrs. Jacinth Jeffers of Counsel for the Claimant/Respondent

Ms. Tara Carter of Counsel for the Defendant/Applicant

Introduction

1 Sandcroft, M. [Ag.]: This is an application by Mr. Hugo Rey, the Defendant/Applicant for summary judgment to be granted in favour of the defendant or in the alternative, for the claim to be dismissed as having disclosed no cause of action. The application was strenuously resisted by, Mr. Paul Rey the Claimant/Respondent.

2 The novel concept of saving expense, conserving resources and achieving expedition is an appealing one, even more so today when trial dates are far away and the cost of going to trial can be significant. In striving to achieve this concept many litigants apply for summary judgment in instances where it appears that the other party has no reasonable prospect of success.

3 The dicta of Lord Wolfe in Swain v Hillman [2001] 1 All ER 91 provides guidance on how a judge should exercise his discretion in deciding whether or not to grant summary judgment. In assessing the provisions of Part 24 of the Civil Procedure Rules of the United Kingdom which are similar to Part 15 of the Civil Procedure Rules of the Eastern Caribbean States, Lord Wolfe MR enunciated at paragraph 7 of that decision:

“It enables the court to dispose summarily of both claims and defences which have no real prospect of being successful. The words ‘no real prospect of succeeding’ do not need any amplification, they speak for themselves. The word ‘real’ distinguishes fanciful prospects of success … they direct the court to the need to see whether there is a ‘realistic’ as opposed to a ‘fanciful’ prospect of success.”

At paragraph 14 he continued:

“It is important that a judge in appropriate cases should make use of the powers contained in Part 24. In so doing he or she gives effect to the overriding objectives contained in Part 1. It saves expenses; it achieves expedition; it avoids the court's resources being used up on cases where this serves no purpose and I would add, generally that it is in the interest of justice.”

Background/Chronology

4 The claimant/respondent commenced proceedings claiming breach of contract by the defendant/applicant. The defendant/applicant is the brother of the claimant/respondent. The claimant/respondent alleges that he borrowed the sum of USDS79,800.00 for the defendant's/applicant's son at the defendant's/applicant's request and on the oral promise that the defendant/applicant would repay the monthly payments. In response the defendant/Applicant filed an Application for Summary Judgment and/or to Strike out the Claim as having disclosed no cause of action and an Affidavit in Support. The latter was followed by written submissions in support filed by the defendant/applicant specifically asserting that there was no consideration provided and no intention to create a binding relationship between the defendant/applicant and the claimant/respondent.

5 The claimant/respondent secured a loan of USDS79,800.00 to assist his nephew, Marvin Rey at a time when he was in the midst of a foreclosure. The defendant/applicant, his brother signed as a guarantor to the claimant's/respondent's loan and would make the monthly payments but there was no written agreement or contract for the defendant/applicant to repay the said loan.

6 The claimant/respondent stated that he obtained the said loan to pay off the arrears of the defendant/applicant son's loan at the request of the defendant/applicant who orally promised to make the monthly payments. For the most part, the defendant/applicant made payments to the bank himself except for the periods as stated in the statement of claim when the defendant/applicant failed to do so and the monies were taken from the Claimant's/Respondent's Term Deposit in order to pay the aforesaid loan.

Defendant's/Applicant's Submissions

7 Counsel for the defendant/applicant, Ms. Tara Carter argued that:

• i. The claimant/respondent had no real prospect of succeeding on the claim and that the claim did not disclose any reasonable cause of action.

• ii. The matter in dispute is a matter of law. The claimant could only succeed on the claim if there was a legally binding contract between the claimant and the defendant. The claimant was seeking to rely on a breach of contract as the underlying cause of action.

• iii. To find a legally binding agreement this Honourable Court must find that the elements of contract existed at the material time.

• iv. The claimant sought to establish the contractual terms in paragraph 2 wherein he said that the Applicant requested that he obtained a loan to assist a third party (Marvin Rey) by payment of his arrears. The claimant asserted that he obtained a loan on a promise that the applicant would make the payments. The claimant attached a copy of a Loan Agreement. These allegations are untrue and disputed. There was no such contract and no evidence of such a contract in existence between the parties.

• v. The court should consider the attached Loan Agreement in light of the fact that there was no reference to any interest or benefit to the defendant/applicant thereunder. There was no reference to the defendant/applicant in the contractual terms between Paul Rey and the Bank. The defendant/applicant did not derive any benefit whatsoever from this Loan Agreement.

8 Ms. Carter also submitted that the law was clear as to the distinction between the summary judgment rule and the strike out rule. The summary judgment rule, while not to be a mini-trial, is a determination on the issue before the court. The issue before this Honourable Court was whether the elements of contract existed on the face of the pleadings that would create a reasonable prospect of succeeding if this claim were to proceed.

9 Counsel respectfully submitted that there was no binding or enforceable contract on the pleadings. There had been no pleaded facts in respect of any consideration between the defendant/applicant and claimant/respondent. There was no intention to create a binding relationship between the defendant/applicant and claimant/respondent.

10 Ms. Carter further contended inter alia, that the pleadings before this court were deficient. The particulars of breach in the claim stated that the defendant/applicant had failed to make monthly payments to the claimant's/respondent's loan. Notwithstanding this complaint, there is no privity of contract between the defendant/applicant and the bank. There is no binding contractual duty upon the defendant/applicant that required him to make any payments on behalf of the claimant/respondent. If he did so that was purely a gift and not a legally binding contract. The evidence clearly exhibited a loan agreement executed solely by the claimant/respondent and there was no benefit thereunder to the defendant/applicant.

11 Ms. Carter also posited, that the essence of the claimant's case is that he obtained a loan in reliance on a purported oral promise that his brother would help to repay the loan. The claimant's position was not complex on the law or the facts. The essence of the case is for the court to determine whether this claim rises to the level of creating a reasonable prospect of winning at trial.

12 Ms. Carter further submitted that it would be impossible to make this argument at trial and the overriding objective should be to determine the claim summarily on the basis that—

• • There was no consideration provided for the loan.

• • The Defendant/Applicant derived no benefit from the Claimant/Respondent's agreement with the bank.

• • The Respondent entered into the agreement freely and voluntarily and on his own.

• • The only thing legally that can be done with respect of this claim is for the Defendant/Applicant to be called upon by the bank under the guarantee he executed in favour of the bank.

13 Ms. Carter additionally posited that if the Court was not minded to grant summary judgment on the issue before it, then the court should exercise its discretion to strike out the claim as having disclosed no cause of action. Ms. Carter further argued that the claim was grounded in breach of contract and the only way to sustain that claim was to find that a contract existed. And she further argued that the court would be unable to come to the conclusion of a contract on the facts and pleadings as presented.

Claimant's/Respondent's Submissions

14 Mrs. Jeffers counsel for the claimant, submitted that the claimant/respondent as the promisee has offered consideration by taking the loan at the request of the defendant/applicant (promisor) and the defendant's/applicant's oral promise to pay the monthly payments was to his detriment, loss or responsibility given or suffered as he had undertaken the contractual liability and provided security for obtaining the loan from the bank. The claimant/respondent averred that he obtained the loan in paragraph 4 of his Statement of Claim and as such by obtaining the loan the claimant/respondent accepted the offer and had provided consideration.

15 Mrs. Jeffers also argued that it was settled law that consideration must move from the promisee and as such this was adhered to by the claimant/respondent in the instant case.

16 Mrs. Jeffers also posited inter alia that the Defendant's/Applicant's submission in urging the Court to try the case on an issue of fact could only be determined by a trial Judge where witness statements, cross examinations and other documents would be produced.

17 Mrs. Jeffers further posited that this was a case of mixed fact and law, as it was only in determining the facts that one could conclude whether or not a contract exist. More so as this was an oral agreement and it appeared that the...