Commercial Law Index

The matter involved a dispute over an order of suit property sale as a remedy for breach of a loan agreement granted by the trial court against the appellant.

The first question was whether the responded had paid the whole stipulated loan amount to the appellant. Assessing the evidence in the record from the trial court, the court reasoned that the trial court’s assessment had failed to evaluate crucial evidence that showed doubt in the respondent’s claim that the whole stipulated amount had been paid. The court thus concluded that the evidence indicated that the responded had failed to fully honor its performance obligation. As a result, the responded could not pursue the remedy of obliging the appellant to transfer the property for failure to repay the loan.  

The second issue concerned the right to mesne profits (i.e. profits received by tenant in wrongful possession and which are recoverable by the landlord) by the appellant and the amounts due. The court did not dwell much on the question of entitlement, instead accepting the trial court’s finding of indisputable occupation and rental collection by responded as a basis together with the fact that responded could not justify the occupation.

The court thus concluded that mesne profits were owed but order that they be set-off to the amount of the loan that the appellant still owed. The decision of the trial court was therefore set-aside and appeal allowed.