Commercial Law Index

The parties concluded a loan agreement to facilitate the appellant’s purchase of immoveable property. The appellant provided 30% of the fee while the rest was covered by the loan amount. Upon purchase, the property was assigned to the respondent. When the appellant defaulted on payment, the respondent purported to sell the property in execution of the debt. 

The appellant contested the legality of this recourse, arguing that the relationship between the parties was such that the respondent held the property in a trust, for her benefit as part-owner, and would do so until which time she had paid back the amount owing. The appellate court concurred with the trial judge that the parties’ transaction clearly amounted to an equitable mortgage – rather than an implied trust – and that the respondent could dispose of the property in execution of the debt without the appellant’s consent.

The trial court’s decision to non-suit the plaintiff/respondent was also upheld by the appellate bench, who considered the well-established criteria for such an award. As the plaintiff had not failed in toto to prove its case, the defendant was not in any event entitled to the court’s judgment and no injustice would be caused thereto by the order, the relevant factors were deemed satisfied.

The appeal was dismissed.