A law firm and consultant lawyer are to pay for the valuation of a piece of land after a woman was unable to build her home due to the property being without the relevant approvals.
Nerisa Garrette filed action against Scotiabank Trinidad Ltd, attorney Tiffany Oliver, and law firm Fitzwilliam, Stone, Furness-Smith and Morgan, for which Oliver was a consultant, and fourth defendant Dickey Seepersad.
The matter was before Justice Frank Seepersad, who gave his decision last week.
Garrette made arrangements with the bank for the purchase of a parcel of land in Longdenville, Chaguanas, and was directed to the law firm which was on the bank’s panel.
She attended the law firm’s office, signed instructions to act, paid fees for legal services and on September 30, 2015, she executed the deed of conveyance and deed of mortgage which were prepared by Oliver.
She spent $5,000 for the preparation of a house/building plan for the construction of her home and submitted this to the Couva/Tabaquite/Talparo Regional Corporation for review and approval.
However, on May 11, 2016, the corporation informed that the approval was withheld because the land was part of a larger parcel which did not have the requisite approval for sub-division.
The bank said it never acted as the woman’s adviser regarding the purchase of the land and denied that its recommendation of the law firm amounted to a representation as to the suitability of the parcel of land or to there being the required approvals.
Oliver and the law firm denied the existence of any retainer contract between them and Garrette and said that at all times they discharged their professional duties in accordance with the instructions provided.
Dickey Seepersad confirmed that the woman contacted him and they made a site visit and an agreement for sale was prepared.
He denied he told her he had all approvals for the land but informed her that there was outline approval, approved for residential use. He gave her a status letter dated March 18, 2014.
He said he did not make an application to the regional corporation for approval and denied that he was negligent or made fraudulent misrepresentations.
Oliver testified during the matter and the court found she was a witness of truth.
She said she acted for both the bank and Garrette but the bank was her primary responsibility.
She stated she had a duty to Garrette to ensure the land had all approvals and accepted that before September 30, 2015, she did not seek information from the regional corporation as to whether this was so.
This was due to the March 2014 status letter which, in her opinion, and based on advice from seniors at the law firm, led her to believe the property had all the required approvals.
Alarm bells in mind of customers
Justice Seepersad found the law firm’s position that Garrette was not its or Oliver’s client was disappointing.
“Attorneys-at-law who are on the panel of financial institutions enjoy lucrative positions of privilege. They often get significant work to prepare both the conveyance and the mortgage when customers elect to buy property.
“The election to use an attorney on the institution’s panel is often more convenient and very often discounts are offered on the mortgage fees if one of the panel attorneys does both the conveyance and the mortgage,” said Seepersad.
“The position outlined by the third defendant (the law firm) should cause alarm bells to ring in the minds of those bank customers who elect to use their services to prepare their conveyances when their acquisition is to be secured by way of a mortgage, given that the third defendant seemingly holds the view that in such a circumstances, they act primarily on behalf of the bank,” he added.
The judge also said that based on the law firm’s position, the phrase “buyer beware” should resonate in the minds of those who have elected to use its services.
“By self-proclamation they shockingly see their duty as being primarily towards the bank. The position adopted by the third defendant poignantly highlights the conflict of interest which frequently arises when the attorneys on the bank’s panels deal with both the conveyance and the mortgage as it appears that, with complete disregard for the provisions of the Legal Profession Act Chap 90:03, it is more convenient to sacrifice the individual purchaser so as to preserve the lucrative relations with the financial institutions,” Seepersad said.
He found the lawyer and the law firm had a duty of care to Garrette and the bank to ensure all the necessary statutory approvals were in place to facilitate the construction of a residential home and that the marketability of the land was not adversely affected by the absence of statutory approvals.
Garrette is no longer interested in possession of the land and the court noted there is a possibility that it may be worth less than the initial valuation, as that was based on the assumption that the land had all the relevant approvals.
Garrette’s claim against the bank was dismissed.
The claim against Dickey Seepersad was also dismissed, and so too Garrette’s claim for rescission of the sale.
The court ordered the law firm and the lawyer are to bear all the cost associated with obtaining the required approvals.
Garrette is to provide the court with a list of proposed valuators within 14 days of the judgment and the court will appoint a valuator.
Oliver and the law firm are also to bear the cost of the report and, once the valuation is obtained, should there be a difference between the price paid by Garrette and the current value of the land, this must be paid by Oliver and the law firm to Garrette within 28 days.
Garrette was represented by attorneys Cedric Neptune, Auldric Neptune and Rishawn Eccles.
Attorney Farees Hosein and Tonya Rowley represented Scotiabank.
Oliver was unrepresented and attorneys Christopher Sieuchand and Sonnel David-Longe represented the law firm.
Attorney F Mohammed represented Dickey Seepersad.