In 1980 the Appellant bought a small fruit farm in St. Catherine. In September 1989 she borrowed $50,000.00 from the Respondent Bank and executed a mortgage instrument in favour of the Bank over the said fruit farm. In October 1989 the Appellant paid a monthly installment under the said mortgage but paid no more installments thereafter. In a letter dated February 14th, 1990 the Bank informed the Appellant that she was in arrears with her payments and that unless she paid within 10 days the Bank would exercise its power of sale. The Appellant never received this letter and the Bank sold the farm by auction to a Mr. and Mrs. Taylor. On June 5th, 1990 the Bank executed a transfer to the Taylor's and their title was registered on August 23rd, 1990 but the Appellant refused to yield possession of the farm to them. The issue for determination by the Privy Council was whether it was necessary for the Bank to have given the Appellant notice that she was in default.
DECISION: The Privy Council was of the view that Section 105 and 106 of the Registration of Titles Act of Jamaica explicitly provided that notice shall be given to the mortgagor by the mortgagee that the mortgagor is in default. However, the Privy Council found that Clause 10 of the mortgage agreement dispensed with the notice requirements of Sections 105 and 106 and that default for 30 days by the mortgagor meant the Respondent Bank may properly exercise its power of sale. As a result, the Privy Council were of the view that Clause 10 of the mortgage agreement modified the statutory power under Section 105 and 106 and as such the power of sale was properly exercised by the Respondent Bank.
