Joaquin v Abbott and Burgess 1993 Civil Jur. No. 302

• Jurisdiction: Bermuda
• Judgment Date: 10 May 1994
• Date: 10 May 1994
• Docket Number: Civil Jurisdiction 1993 No. 302
• Court: Supreme Court (Bermuda)

In the Supreme Court of Bermuda

Ground, J

Civil Jurisdiction 1993 No. 302

Arnold Leslie Joaquin

Plaintiff

-and-

Alexander Dean Abbott

1st Defendant

-and-

Anthony Charles Burgess

2nd Defendant

Mr. Lord for the Plaintiff

Ms. Harvey for the 2nd Defendant

Cook v FowlerELR (1874) LR 7 HL 27

EMI Records Ltd v WallaceELR [1983] Ch 59

DeGroote v MacMillan 1991 Civil Jur. No.48

Bills of Exchange Act 1934, s. 56

Promissory note — Maturity date — Indemnity costs

JUDGMENT

(extempore)

This is an action on a promissory note. Originally the action was against the 1st Defendant on one note and against the 2nd Defendant on a second note.

The background is that the 2nd Defendant took over the debt of the 1st Defendant. The first note was for two years, maturing on the 12th April 1992. It carried interest. The interest was to be paid in two annual instalments of $19,950.00 each. The 1st Defendant paid the first installment, but he only paid part of the second, leaving arrears of $10,017.71 and that figure, as I understand it is agreed.

Before the maturity date of the first note, the 2nd Defendant, Mr. Burgess, entered into negotiations with the plaintiff with a view to taking over the 1st Defendant's liability under the first note. I should say as an aside here that it appears that that liability related to the purchase of a house. It is not necessary to know that for the purpose of this action, but it perhaps helps to explain the way these things came about.

It was eventually agreed between the plaintiff and 2nd Defendant that he would take over the liability of the 1st Defendant, but according to the attorney, Mr. Francis Morris, the 2nd Defendant was slow in coming into his office to sign the promissory note, and indeed the second note was not signed until the 30th November 1992. Under that note the 2nd Defendant assumed the principle of $285,000 which had been due under the first note and the balance of interest due in respect of the first note. Now there is a dispute as to the amount of that interest: I simply note it at this stage, and will return to it later.

In those circumstances, as I have outlined them briefly by way of introduction, the plaintiff wisely discontinued against the 1st Defendant, so that this action proceeded before me against the 2nd Defendant alone, on the second promissory note, that of the 30th November 1992. That second note is not disputed. A copy of it is in the agreed bundle at pages 9 and 10. There are now only two items of dispute, as follows:-

1) The computation of interest due in respect of the first note is disputed. This is set out in the second note as a liquidated sum. The 2nd Defendant now says that that liquidated sum is mistaken and seeks rectification. The claim for rectification was only pleaded by amendment very late in this action. Indeed it was first raised by tentative amendment on the 6th May, which is the Friday before this action began on the Monday. When the matter came before me on Monday, a further amended document was put before me, which included a counterclaim for rectification. I allowed that amendment and we proceeded on that basis. I should also say that the 2nd Defendant tendered a lesser sum representing his computation of the money due in respect of interest, and in respect of the first promissory note, just before the trial. That was refused.

2) The due date for the principal under the second note is disputed. The 2nd Defendant says it is not due until the 30th November 1996, four years from the date of the note. The plaintiff says the principle became due on demand, or at least it became due on demand when default was made in the payment of interest.

I will deal with each of those points of issues separately. The first is the computation of interest in respect of the first note. In the second note there are two elements, included in the sum expressed as the principal sum. That sum is $307,652.70. It is comprised of the carried forward principal from the first note—being $285,000—plus (according to the terms of the second note) accumulated arrears of interest of $22,652.70, described in the second note as ‘now due and owing as at the date hereof’. That second sum was to be reduced under the terms of the second note by monthly payments of $1000.

The 2nd Defendant says that the sum $22,652.70 is mistaken, and that the agreement between the parties was that the sum which would be carried forward into the second note in respect of the accumulated interest, would be limited to interest due on the note as at its expiry date. That would be the balance of the second annual instalment, being $1017.71. The remainder of the $22,652.00 appears to be attributable to the seven or so months after the expiry of the first note and before the 30th November 1992. The second defendant, through his counsel, argues that at law the interest that might have accumulated during that period is not properly to be regarded as interest under the first note at all but is...