National Building Society of Cayman v Angie Natasha Cranston - Judgment

¶ Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 1 of 16 IN THE GRAND COURT OF THE CAYMAN ISLANDS 1 HOLDEN AT GEORGE TOWN 2 Cause No: G437/2010 3 4 5 IN THE MATTER OF THE REGISTERED LAND LAW (2004 REVISION) 6 7 BETWEEN: 8 NATIONAL BUILDING SOCIETY OF 9 CAYMAN 10 11 PLAINTIFF 12 13 AND: 14 ANGIE NATASHA CRANSTON 15 16 DEFENDANT 17 18 19 Appearances: Mr. Ross McDonough and Ms. Christina 20 McTaggart of Campbells for the Plaintiff 21 22 23 Ms. Angie Natasha Cranston, Defendant 24 25 Before: The Hon. Mr. Justice Charles Quin 26 Heard: 24th February and 3rd March 2011 27 28 JUDGMENT 29 30 31

¶ [1] The Plaintiff, namely National Building Society of Cayman, issued an Originating 32 Summons against the Defendant, Angie Natasha Cranston (“Ms. Cranston”) for the 33 following relief: 34 “1. This Honourable Court do sanction and permit the sale by 35 private treaty of all that property registered in the Cayman 36 Islands Land Register with absolute title and being particularly 37 known as Registration Section Prospect, Block 43A, Parcel 210 38 (“the Property”) by the Plaintiff as Chargee with a power of 39 sale over the Property. 40 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 2 of 16

¶ [2] The Defendant and any other person occupying the Property 1 do, within 28 days of this Order, vacate the Property and take 2 all appropriate steps to give the Plaintiff vacant possession of 3 the Property. 4

¶ [3] The Plaintiff do have leave to issue a Writ of Possession in 5 relation to the Property at the expiry of the 28 days referred to 6 in paragraph 2 above. 7

¶ [4] Such further or other relief as this Honourable Court may 8 deem appropriate.” 9 10

¶ [2] The Plaintiff’s application is grounded by the affidavit of the General Manager of 11 the Plaintiff, namely Mr. Dunbar McFarlane (“Mr. McFarlane”). 12 The Facts 13

¶ [3] The Defendant purchased the property in 2003 and was first registered a proprietor 14 with title absolute on the 14th October 2003, subject to a charge in the sum of 15 CI$40,336.36. 16

¶ [4] On the 28th November 2006 a charge in favour of CICSA Cooperative Credit Union 17 was transferred to the Plaintiff to secure the payment of the sum of CI$47,065.63, at 18 that time owed by the Defendant to the Plaintiff. 19

¶ [5] On the 17th November 2006 the Defendant entered into a variation of charge with 20 the Plaintiff. On the 28th November 2006, in consideration of the principal sum 21 being reduced by repayment made by the Defendant, from CI$49,618.18 to 22 CI$47,065.63, and increased by CI$152,934.37, to a total of CI$200,000, a 23 variation of the charge was registered over the property. 24 25 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 3 of 16

¶ [6] Clause 2(a) of the Schedule attached to the aforesaid variation agreed by the 1 Plaintiff and the Defendant reads: 2 “The Chargor shall repay to the Chargee on demand the Principal 3 Sum, or such portion thereof as shall have been advanced to the 4 Chargor, and remains due and owing, together with interest thereon at 5 the rate aforementioned.” 6

¶ [7] Clause 2(b) of the Schedule reads: 7 “The Chargor further hereby covenants with the Chargee that the 8 Chargor will, on demand, pay or discharge to the Chargee, all monies 9 and liabilities which shall for the time being (and whether on, or at any 10 time after such demand) be due owing or incurred to the Chargee by 11 the Chargor.” 12

¶ [8] Clause 3(a) of the Schedule reads: 13 “The mortgage facility will be granted as a construction loan initially 14 … During the construction period the Chargor will be required to 15 repay interest only. On completion of construction and pending such 16 demand for repayment as aforesaid, by the Chargee, the Chargor shall 17 pay to the Chargee principal and interest in monthly instalments in the 18 sum of CI$1,950.00 on the first day of each month, commencing the 19 month immediately following disbursement, and will extend over a 20 period of THIRTY (30) years.” 21

¶ [9] Clause 11 of the Schedule reads: 22 “Section 72 and Sub-section (vi) of s. 73 of the above[Registered Land] 23 Law shall be varied in respect of this Charge, and if any instrument of 24 variation executed pursuant to this Charge, so as to entitle the Chargee 25 immediately upon default by the Chargor in payment of the principal 26 sum, or of any interest payable hereunder, or in the performance or 27 observance of any agreement express or implied herein, to serve on the 28 Chargor notice in writing to pay the money owing or to perform and 29 observe the agreement as the case may be, and further so as to provide 30 that if the Chargor does not comply within one month of the date of 31 service of such notice, the Chargee may thereupon without further 32 notice, either … (a) …. ; (b) sell the property, the subject of this 33 security, by private treaty as well as by public auction; or (c) foreclose 34 or enter into possession of the charged property; or (d) …; (e)…” 35 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 4 of 16

¶ [10] Copies of the aforesaid transfer of charge, the variation of charge and the schedule 1 to the variation of charge were exhibited to Mr. McFarlane’s affidavit. 2

¶ [11] The Defendant fell into arrears of monthly payments due under the charge. On the 3 10th November 2010 the Plaintiff, through its attorneys, issued a demand for 4 payment of the outstanding sum due and owing under the terms of the variation of 5 charge and for payment of the arrears of monthly installments. This letter of 6 demand was served on the Defendant at the property on the 22nd November 2010. 7

¶ [12] The last payment received from the Defendant by the Plaintiff was in the sum of 8 CI$1000, paid on the 19th August 2010. 9

¶ [13] On the 29th November 2010 the Plaintiff issued the Originating Summons against 10 the Defendant. 11

¶ [14] Accordingly, the Plaintiff claims, pursuant to the variation of charge, that as of the 12 18th January 2011, the Defendant owes: 13 i. The principal amount in the sum of CI$219,685.23 14 ii. Interest accruing at 6.75% per annum (being the Building Society’s 15 base rate plus 3.50) at a per diem rate of CI$40.63 16 iii. Total arrears in the sum of CI$10,991.84 17

¶ [15] On the 8th January 2011 the Plaintiff instructed chartered surveyors, namely 18 Charterland Ltd. to provide a valuation of the property. 19

¶ [16] Charterland placed the market value of the property at CI$265,000.00. In addition, 20 Charterland provided a market value with the special assumption that the sale of the 21 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 5 of 16 property can be completed within 90 days, formerly known as a “forced sale value”, 1 at CI$212,000.00. 2

¶ [17] On the 20th January 2011 Mr. McFarlane swore and filed his affidavit which 3 supports the Plaintiff’s Originating Summons. 4

¶ [18] On the 20th January 2011 the aforesaid Originating Summons, and Mr. McFarlane’s 5 affidavit, together with an Acknowledgment of Service, were all served on the 6 Defendant at the property in question. 7

¶ [19] In light of the foregoing facts, the Plaintiff seeks to sell the property by private 8 treaty and therefore seeks Orders in the terms of the Originating Summons dated 9 the 29th November 2010. 10 Defendant’s Position 11

¶ [20] At the first hearing on the 24th February 2011 the Defendant represented herself and 12 confirmed that she did not challenge the facts as presented in Mr. McFarlane’s 13 affidavit. 14

¶ [21] The Defendant, to her credit, has kept in communication with the Plaintiff’s 15 representatives with respect to her circumstances. The Defendant worked for a local 16 insurance company, and due to the economic recession, was made redundant in 17 October 2010. The Defendant has three children – girls aged 16, 15 and 10 – to 18 raise. Since being made redundant, the Defendant has made 30 separate job 19 applications but to date has received no offers of employment. 20

¶ [22] The Defendant produced a letter dated the 17th January 2011 that she had written to 21 the Plaintiff. In her letter the Defendant thanked the Plaintiff for trying to assist her 22 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 6 of 16 with the variations of the mortgage. Furthermore the Defendant informed the 1 Plaintiff in an honest and straightforward manner that as a result of her present 2 unemployment, she cannot make ends meet and therefore is unable to maintain the 3 required payments due and owing to the Plaintiff. 4

¶ [23] At the second hearing on the 3rd March 2011 the Defendant informed the Court that 5 as of the 21st February 2011 she was in gainful employment and, accordingly, asked 6 for time to pay off the arrears and bring the payments owed to the Plaintiff up to 7 date. 8 The Law 9

¶ [24] Counsel for the Plaintiff, Mr. McDonough, drew my attention to the recent decision 10 of the learned Chief Justice dated the 10th February 2011 in Butterfield Bank 11 (Cayman) Ltd. v. Jervis & Jackson Cause Number 468 of 2010. 12

¶ [25] In Butterfield Bank v. Jervis & Jackson the Plaintiff Bank sought liberty to sell the 13 property, the subject of the mortgage, by way of private treaty (or by public 14 auction). As the Chief Justice noted, Court sanction is required for a sale by private 15 treaty. The Chief Justice then went on to state at paragraph 7 in his Reasons for 16 Ruling that: 17 “It is the long settled practice of this Court that the variation of the 18 Law by way of the grant of leave to sell by private treaty instead of by 19 public auction will not be given until after a fair attempt by the chargee 20 to sell by public auction.” 21 The learned Chief Justice continued: 22 “The reason for this is obvious and important … s. 75 imposes a duty 23 upon the chargee to act in good faith when exercising the right to sell 24 by public auction” 25 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 7 of 16

¶ [26] At paragraph 9 of his Reasons for Ruling the learned Chief Justice stated: 1 “Until that attempt to sell by public auction has been taken, the Court 2 can have no way of knowing whether some other lower price to be fixed 3 as the reserved price for sale by private treaty is a reasonable price. 4 Yet, the imprimatur of the Court is what is ultimately sought by the 5 chargee to absolve it of its duty to obtain the best price when the Court 6 sanctions a sale at a price less than that which the market with 7 persistent effort over time, might yield.” 8 The Chief Justice continued at paragraph 10 that: 9 “It follows, secondarily, that an application to the Court for which 10 costs will be incurred which the chargee will seek to be passed to the 11 chargor, should not be brought until after the section 75 powers have 12 been exercised, and the appropriateness thus shown, for variation of 13 the law, to allow sale by private treaty.” 14 The Chief Justice noted in paragraph 11: 15 “In this case no attempt has been made by the Plaintiff to obtain the 16 market price by way of sale by public auction. It required no leave of 17 the Court to attempt to do so. Section 75 makes that plain.” 18 19

¶ [27] The learned Chief Justice refused to grant the chargee Bank’s application, in order 20 to allow for the sale by public auction to take place before the chargee Bank could 21 restore its application to sell by private treaty. 22

¶ [28] In refusing Butterfield’s application in Cause Number 468 of 2010 the learned 23 Chief Justice also ruled that his reasons were to apply in Cause Number 459 of 24 2010, namely National Building Society of Cayman v. Wellington in which he 25 refused a similar application on the 10th February 2011. 26

¶ [29] The Plaintiff’s counsel submits that the factor which caused the learned Chief 27 Justice to refuse the application was the Plaintiff’s failure to follow what the Chief 28 Justice described as the long settled practice of the Court that the leave of the Court 29 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 8 of 16 to sell by private treaty instead of by public auction will not be given until after a 1 fair attempt has been made by the chargee Bank to sell by public auction. 2

¶ [30] Counsel for the Plaintiff submits it is open to doubt that it is a long-settled practice 3 and submits that Orders have been obtained in the past without applicants for the 4 Order being required to demonstrate that applications have been preceded by an 5 attempt to sell at public auction. 6

¶ [31] The Plaintiff submits that the “mischief” which the learned Chief Justice appears to 7 have been concerned with was the Bank’s seeking leave to fix the reserve price at a 8 “forced sale” price. The Plaintiff’s counsel respectfully submitted that the Chief 9 Justice’s concern seemed to have brought about by a misapprehension that if the 10 Court was asked to fix a reserve price lower than the open-market valuation, then 11 this would absolve the Bank of its duty to obtain the best price reasonably 12 obtainable for the property, or, as the learned Chief Justice stated: 13 “The imprimatur of the Court is what is ultimately sought by the 14 chargee to absolve it of its duty to obtain the best price when the Court 15 sanctions the sale at a price less than that which the market, with 16 persistent effort over time, might yield.” 17 18

¶ [32] However, the Plaintiff’s counsel in this matter argues with some force that the 19 Chief Justice’s concern could, perhaps, have been misplaced because merely 20 making an Order that the property not be sold below a certain reserve price does not 21 necessarily have that effect. Furthermore, the Plaintiff argues that the chargee Bank 22 remains under an obligation to use reasonable efforts to obtain the best price 23 reasonably obtainable for the property, and this obligation remains on the Bank at 24 all stages until the best possible price is obtained. 25 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 9 of 16

¶ [33] Counsel for the Plaintiff has discovered from counsel for Butterfield Bank in Cause 1 Number 468 of 2010 that a number of authorities were not cited to assist the Court. 2 In particular at the hearing on the 8th February 2011 I understand that the learned 3 Chief Justice was not referred to Bank of Nova Scotia Trust Co. (Cayman) Ltd. v. 4 Bodden 1952-79 CILR Note 8 (“BNS v. Bodden”). 5

¶ [34] Directing a chargee to instruct and pay attorneys to fix an auction, to draft terms 6 and conditions of sale, and to advertise and hold an auction, will involve 7 considerable professional fees and significant time. This could well act to the 8 detriment of the chargee Bank, but more importantly will inevitably act to the 9 detriment of the chargor, who will be saddled with the professionals’ costs for the 10 public auction, and further disadvantaged by delay and interest which will keep 11 accruing. 12

¶ [35] The Plaintiff’s counsel submits that the mischief which is of concern to the Chief 13 Justice can be avoided by the Court not fixing a reserve price. The Plaintiff’s 14 counsel submits that this does not create a license to the Bank to sell at any price 15 because, as counsel for the Plaintiff properly submits, the Plaintiff will always 16 remain under a duty to use all reasonable endeavours to get the best price for the 17 property. Furthermore, should the Bank fail in its duty to get the best price for the 18 property, the chargor will have a remedy against it. 19

¶ [36] Henderson J. in Scotia Bank (Cayman Islands) Limited v. Rankine 2004-2005 20 CILR Note 26 set out the correct approach for ascertaining the true value of a 21 property when he stated: 22 23 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 10 of 16 “The best evidence of the true value of real estate is the reaction of 1 potential purchasers and offers made by them, assuming that the 2 property has been listed on the Multiple Listing Service with accurate 3 particulars and advertised in a reasonable and competent fashion” 4 Accordingly, Banks in the position of chargees understand that the most appropriate 5 manner for them to demonstrate that they have fulfilled their duty to the chargor to 6 obtain the best price reasonably obtainable for the property is by listing it in the 7 Multiple Listing System and advertising it for a reasonable period of time. 8 9

¶ [37] Section 77 of the Registered Land Law (2004 Revision) (“the Law”) reads: 10 “The provisions of s. 70(2) and (3), 72, 73, 74 and 75, may, in their 11 application to a charge, be varied or added to in the charge: Provided 12 that any such variation or addition shall not be acted upon unless the 13 Court, having regard to the proceedings and conduct of the parties and 14 to the circumstances of the case, so orders.” 15 16

¶ [38] This gives the Court a very wide discretion. I agree with counsel for the Plaintiff 17 when he submits that what s. 77 does not state is that a variation can only be acted 18 upon if there had been a prior unsuccessful public auction. 19

¶ [39] I further agree with counsel for the Plaintiff when he states that the Judgment of the 20 learned Chief Justice in Butterfield Bank v. Jervis & Jackson could unnecessarily 21 restrict the Court’s discretion and it is not what the legislation intended. It appears 22 from the Chief Justice’s Reasons for Ruling that, unlike the case before me, the 23 Defendants in Butterfield Bank v. Jervis & Jackson were neither represented, nor 24 did they appear. It was open to the learned Chief Justice to exercise his discretion, 25 having regard to “the proceedings and conduct of the parties” and to “the 26 circumstances of the case.” Accordingly, the learned Chief Justice, in the absence 27 of the Defendants at the hearing, may well have considered their interests would be 28 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 11 of 16 better protected if a public auction were held before the chargee Bank could restore 1 its application for leave to sell the property by private treaty. In this case, the 2 Defendant has appeared and, to her credit, has told the Court, that she understands 3 the Plaintiff’s position and its duty to obtain the best price reasonably obtainable for 4 the property. 5

¶ [40] It appears that the decision of Moody J. in BNS v. Bodden was not drawn to the 6 Chief Justice’s attention. I am indebted to the Consulting Editor of the Cayman 7 Islands Law Reports, Mr. Ramon Alberga Q.C., for providing the Court with the 8 full written Judgment of Moody J. dated the 19th August 1977. In this case the same 9 argument was put before the Court, namely that “the application for leave to sell by 10 private treaty could only be brought after exhausting the power of sale by public 11 auction.” 12 The argument put forward by the chargor was that the “statute [Registered Land 13 Law] made no provision to bypass the auction and sell by private treaty.” The 14 chargor’s counsel further submitted that “the Plaintiff has no power to ask for sale 15 by private treaty until the sale by auction has gone through” and “that the statute is 16 emphatic as to the first step in sale is by public auction.” 17 However, Moody J. held that the mortgage dated the 30th January 1968 and the 18 amending deed dated the 13th March 1973 gave the right to the Plaintiff to sell 19 “either by public auction or by private contract.” 20

¶ [41] The learned editors of the Cayman Islands Law Reports set out the ratio in 1952-79 21 CILR Note 8 which reads: 22 23 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 12 of 16 “As the power of sale given by the mortgage itself is effectively one to 1 sell either by public auction or private contract, it was not necessary to 2 offer the property for sale by public auction first and the court would 3 order that the mortgagee be at liberty to sell by private contract 4 immediately.” 5 In the original written Judgment Moody J. concluded by stating: 6 “There will be an order that the Plaintiff be at liberty to exercise the 7 power of sale by private contract acting in good faith and having 8 regard to the interest of the chargor.” 9 10

¶ [42] Counsel for the Plaintiff, Mr. McDonough, also drew this Court’s attention to 11 further helpful assistance from the decision of Malone C.J. in CNB v. Smith and 12 Pierson. In CNB v. Smith and Pierson the Plaintiff similarly sought leave to sell a 13 charged property by private treaty. The First Defendant submitted to Malone C.J. 14 that it was irrelevant whether s.75 and s.77 of the Law conferred a discretionary 15 power on the Court to impose conditions on a sale by treaty, as the Court was given 16 a general jurisdiction by s.18 of the Grand Court Law to attach to such orders any 17 conditions, even refusing leave to sell the property by private treaty. 18

¶ [43] Malone C.J. held at page 236 of the first holding: 19 “The proviso to s.77 of the Registered Land Law (Revised) conferred on the 20 court the power to grant to a chargee leave to exercise a right he already had, 21 i.e. the right to vary a charge on property so that he could sell it by private 22 treaty instead of by public auction as permitted by s.75. Although s.77 did not 23 in express terms empower the court to impose conditions when granting such 24 leave, the court was not by this omission confined only to refusing or granting 25 the order sought. By s.18 of the Grand Court Law, it had a general jurisdiction 26 to impose such conditions as were just when making orders and this section 27 applied to the exercise of the specific power conferred by the proviso.” 28 And went on to add at page 237 of the second holding: 29 30 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 13 of 16 “The court would impose such conditions in granting the order for the Plaintiff 1 to proceed with the sale by private treaty as it considered just, having regard, 2 as specified in the proviso, to “the proceedings and conduct of the parties” and 3 “the circumstances of the case.” 4 5

¶ [44] Although BNS v. Bodden was not cited before Malone C.J. in language very 6 similar to Moody J, Malone C.J. held in CNB v. Smith and Pierson at page 237 of 7 the second holding: 8 “It was clear that in so far as the Registered Land Law (Revised), s.75(1) 9 imposed on a chargee exercising a power of sale a duty to act in good faith and 10 have regard to the interests of the chargor, it applied both to a sale by private 11 treaty as well as to one by public auction.” 12 13 In the case before this Court it is clear from both the conduct of the Plaintiff, and 14 from the submissions of its counsel that the Plaintiff, whilst exercising its power of 15 sale, is acutely aware of its duty to act in good faith and have regard to the interests 16 of the Defendant. 17

¶ [45] I find myself in agreement with the decisions and reasons given by Moody J. in 18 BNS v. Bodden and Malone C.J. in CNB v. Smith and Pierson. 19

¶ [46] I am fortified in my view by the decision of the Court of Appeal in Paradise Manor 20 Ltd. v. BNS 1985 CILR 437. In Paradise Manor Ltd. v. BNS the parties had 21 agreed for the provisions of s. 72 to be varied as it relates to the registered charges. 22 As Zacca P. stated at page 452 line 10: 23 “The parties agreed to this modification of s.72 in their contractual 24 agreements. It cannot be said that it would be unfair or unreasonable, 25 having regard to all the circumstances, for the learned trial judge to 26 have considered a variation of s.72 under the summons before him. In 27 my view the learned trial judge correctly exercised his discretion in 28 allowing the variation of s. 72 and in dispensing with the notice 29 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 14 of 16 requirement to be given under s.72. In the circumstances I would not 1 interfere with the order made in this regard.” 2 3

¶ [47] At page 465 in Paradise Manor Ltd. v. BNS Kerr J.A. stated at line 10: 4 “Notwithstanding this, the pivotal point is, Was (sic) the exercise of the 5 jurisdiction unfair to the appellants? I am constrained to answer in the 6 negative. The reasons advanced by Hull J. are compelling. The 7 defendants were aware of their default and demand was made for 8 payment of the money due and owing some three years before and 9 thereon no payments were made to date. The agreements were made 10 between parties at arm’s length with legal advice at their beck and call. 11 The applicant was asking for no more than was agreed. It could never 12 be urged with reason and good sense that a party is taken by surprise, 13 when the other party in whose favour stipulations are made, asks that 14 effect be given to such stipulations. Nor have I been directed to any sort 15 of consideration beyond the matters so fully aired at the hearing that 16 could evoke a favourable affirmative response to that question.” 17 18

¶ [48] When I look at the facts of this case, having read the affidavit of Mr. McFarlane, 19 and having heard the Defendant in person, I cannot find any element of unfairness 20 or unreasonableness. Unlike the aforesaid Butterfield Bank v. Jervis & Jackson 21 case, the Defendant appeared before this Court on the 24th February and the 3rd 22 March 2011. The Defendant entered into this agreement with a full understanding 23 of the terms and conditions of the variation of the charge and, most importantly, 24 with an understanding of her financial obligations to the Plaintiff. In fact, in a letter 25 to the Plaintiff the Defendant expressly thanked the Plaintiff for its agreement to 26 vary the mortgage. The Defendant was completely frank with the Court and 27 understood the position in which she has now found herself. She was aware of her 28 default and the Plaintiff’s demand for payment of the moneys due and owing. She 29 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 15 of 16 had no criticism of the Plaintiff or of the manner in which it has conducted these 1 proceedings to date. 2

¶ [49] I find myself in agreement with the Plaintiff’s counsel’s submission and hold that I 3 should follow the Court of Appeal in Paradise Manor Ltd. v. BNS when it laid 4 down the principle that where variations had been agreed between the parties at 5 arm’s length, where they had, or could have had the benefit of legal advice in 6 relation to the proposed variations, there would have to be some element of 7 unfairness or unreasonableness for the Court not to exercise its discretion to allow 8 the agreed variation to be acted upon. As the Court of Appeal concluded, the 9 chargee Bank was asking for no more than what had been agreed between the 10 parties. 11

¶ [50] I do not find in this particular case that the proposed variations to s.72 and s.75 to 12 allow the Plaintiff to exercise its power of sale by private treaty after it had made an 13 appropriate demand which had not been complied with, to be either unfair or 14 unreasonable. In all the circumstances I find that this is a proper case in which to 15 exercise my discretion and to allow the variation agreed between the parties. 16

¶ [51] The Plaintiff’s counsel has assured this Court that the Plaintiff will continue to act 17 in good faith and have regard to the interests of the Defendant. Accordingly, I find 18 that this is an appropriate case to grant the Plaintiff leave to sell the property by 19 way of private treaty and I so order. In addition, I make the consequential orders 20 prayed for in the Plaintiff’s Originating Summons. 21

¶ [52] As costs follow the event I grant the Plaintiff the costs of this application, to be 22 taxed if not agreed. 23 Judgment. Cause No. G437 of 2010. National Building Society v. Angie Cranston. Coram Quin J. Date: 4.3.2011 Page 16 of 16

¶ [53] However in light of the representations made by the Defendant yesterday I order a 1 stay of the execution of my Order for three (3) months, from the date of this 2 Judgment. 3 4 5 Dated this the 4th March 2011 6 7 8 Honourable Mr. Justice Charles Quin 9 Judge of the Grand Court 10