by Ashley Bernadine
Approximately ten (10%) percent of the practicing Lawyers make over seventy-five percent (75%) of the earnings in the legal profession. Glamour and showmanship rarely bring in large fees. The money is in Real Estate, Conveyancing, Mortgages, representing the Large Firms, Insurance Companies, the Credit Unions and most importantly the ‘Banks’.
We as an ‘Independent Nation,’ by and large do not own, control, nor monitor assiduously these ‘Banks’. Economic growth and development depends on the money supply in the economy which in turn is functionally related to the rate of interest.
In Economic jargon, what the Economist refers to as the ‘Marginal Efficiency of Capital’ in layman’s term the going rate of interest. Money is a commodity and its usefulness by and large depends on its earning capacity. The higher the rate of interest the more people are willing to invest.
However, in Grenada these rates do not operate according to market forces. The rate of interest hardly varies, on Mortgages and other Loans but the rate of interest on Savings varies precipitously and in most cases it appears to be an arbitrary decision by the Banks.
In Grenada there are about five (5) to seven (7) Law firms that control the legal business of the Banks and other large financial entities. They are Lewis & Renwick, Renwick & Payne, Henry, Henry and Bristol, Grant, Joseph and Co., Wilkinson and Wilkinson and to a lesser extent Henry, Hudson Phillip. They do approximately eighty percent (80%) of the Mortgage Business which is where the money lies.
‘Cartel’ is an Economic Term, which refers to corporations who silently and informally get together to fix prices, by controlling the supply of goods and services. It is an artificial control of the market to prevent other firms from entering or remaining. They act informally, obstructively and are illegal in most ‘Develop Countries.’
I took a bit of theatrical or poetic, license, to refer to these law firms as a ‘Cartel’. They have an almost unimpeded, tandemic control of the ‘Mortgage Market’, to the detriment of the profession. There are almost a hundred practicing lawyers in Grenada, every year an average of five to six new lawyers enter the market. In a population of just over one hundred thousand (100,000), over sixty (60%) percent are under eighteen years of age with little or no economic currency. This makes a small market. the profession needs to open up and do the right thing.
Lawyers ‘ought’, not to represent both ‘Vendor and Purchaser’, in a Real Estate transaction. It is against the Code of Ethics. Yet it happens all the time, particularly with these ‘Cartel’ law firms in a Real Estate transaction emanating from the Banks or other similar lending institutions.
These law firms invariably represent, Vendor, Purchaser, the Mortgagee (which are the Banks and other financial institutions). In many of these instances, they also do ‘the Re-conveyance and the Deed’. The law firms invariably collect four
(4) different fees in matters of this nature from one transaction.
This is wrong, it is ‘unethical’, yet we do nothing about it. Those of us on the outside are powerless to act and those who are in do not want to change the ‘Status Quo’. It will affect their earnings.
Why should a client have to pay a Re-conveyance fee? Why should they be penalised for paying off their Mortgage? This practice is not fair or right and should be stopped. This practice does not happen in Canada, England and most States in the United States of America (U.S.A).
A mortgage is a loan for the purchase of Real Estate. It derives from an old ‘Anglo-Saxon’ term. Under the common law, legal title passes to the lending institution until the payment of the debt. Today the common-law no longer applies. There is an Act, the Mortgage Act. This Statutory provision supersedes the common law. Simply put, a Mortgage is pledge or security of a particular property for the payment of a debt or the performance of some other obligation, whatever form the transaction may take, but is not now regarded as a Conveyance. It may be cast in the form of a Conveyance, but it is not a conveyance.
The deed is in your name, not the Bank’s name. it should be regarded as a debt to be paid off – the Banks or other (Mortgagee) will have an ‘Equitable’ interest in your property. What the lawyers call ‘The Equity of Redemption’.
When the debt is paid off, the Bank’s interest ceases. They should then ‘issue’ a certificate by way of letter to the ‘Registrar’ who puts a stamp in the Ledger book, to show that the Mortgage is paid off.
The making and payment of a ‘Re-Conveyance’ Deed is unnecessary and expensive to the (Mortgagor) the client. The Deed after it is prepared by the lending institution’s Lawyer is kept by the institution (The Banks). That document is in your name. however, in the Mortgage document, there will be a clause inserted stating that you have transferred Legal Ownership to the lending institution (The Banks) until the Loan is paid off.
Again I say that is wrong and the same Banks who do this in Grenada, cannot do it in Canada, they cannot assume the legal ownership of your Property. It happens because no one challenges it and they have the protection of their lawyers.
The question you may ask is why such a minority as ‘The Lawyers Cartel’, control such a disproportionate amount of the legal earnings. Most of them hardly go to Court, they do not have to. They do not or are not activists at the Bar. They hardly attend meetings and invariably are not too concerned about the general welfare of the profession. To use the proverbial ‘their bread is buttered’. The question is how did this phenomena develop.
Historically, the profession was dichotomized between Barristers and Solicitors. The Barristers were the advocates, they went to court, they did all the Civil and Criminal Litigation. They are the ones who traditionally became ‘Q.C’s’, which was bestowed by the profession’s recognition for excellent Advocacy. You must be an Advocate for a minimum of twelve (12) years.
However the practice is bastardised. Q.Cs are awarded to lawyers who never Litigate, or have not done so in years. It becomes a matter of ‘pull and influence’. In my view Anslem Clouden is the best criminal Lawyer through preparation, research and Advocacy. He has the best Criminal Law Library. He was not the most brilliant student at high school, I taught him at the Grenada Boys Secondary School (G.B.S.S), his contemporaries were Henry Joseph (Accountant), Chester John (Insurance), Cosmos Joseph (Agriculture), Allan Bierzynski, Cajeton Hood and Francis Alexis.
He was not in their league. He did not get any fortnightly ‘Stars’ but he was assiduous, industrious and most of all had the impetus to achieve. No Q. C. for him. Celia Clyne Edwards Q.C, and Dr. Francis Alexis Q.C, in my opinion are the best Civil Litigation Lawyers. Yet between these three they do not control a Bank.
The two long established Conveyancing firms are Renwick & Payne and Lewis and Renwick, to a lesser extent Henry, Henry and Bristol. These were the traditionally established firms. They mirrored the social hierarchy of the society. Renwick and Payne is the Lawyer for the Republic Bank formerly N.C.B and the Grenada Development Bank (G.D.B) and others. They do all the Mortgage work for these institutions.
Lewis and Renwick represents the Caribbean International Bank of Commerce (C.I.B.C), the old Barclays, Grenada Co-operative Bank and the Building and Loan Association. They did all the Mortgage work for these institutions. At one time St. Bernard was the chairman of the Board of both Grenada Co-operative Bank and Grenada Building and Loan Association. Lawyer and Chairman, all the work went to Lewis & Renwick.
With the pending demise of the Building and Loan, he was forced to resign these Chairmanships. Additionally with the emergence of Derek Steele of ‘Steele Auto’, as the Chairman, some of the Mortgage work for the Co-operative Bank is being directed to Michelle Steele of ‘Vitas Chambers’. Michelle is Minister Nicki Steele’s wife and the daughter-in-law of Derek Steele.
St. Bernard had brought in Wilkinson to be a Director of the Building and Loan Association, between both of them they controlled over sixty percent (60%) of the shares. Due to over investment in CLICO and British American which had the blessing of the Chairman and Vice-Chairman Wilkinson, they invested too heavy in these organisations, resulting in the Building and Loan being placed in the hands of the Judicial Manger, Rupert Augustine. Over the last three to four (3-4) years its future is still in limbo.
Henry, Henry and Bristol controls the Mortgages for the Bank of Nova Scotia, Grant Joseph gets some of the Scotia business and some of C.I.B.C.
The Grenada Development Bank business is shared between Renwick & Payne, and Henry Hudson. Grant Joseph control most of the business from the large Hotels and many of the foreign clients.
A Mortgage is a written instrument (document) to record a Loan. It is usually an interest in land created by a written instrument providing security for the completion of a payment of a debt.
It does not give these institutions the un-crystallised right to be the legal owner of your property until you pay off the Mortgage loan. Usually one goes to a lending institution, traditionally a Bank, to negotiate a loan to purchase land or a house or both.
If successfully negotiated, the Bank official invariably tells the customer, that we shall send the documents to our ‘Lawyers’, to prepare the Deed and the Mortgage document. He does not ask the customer if he has a lawyer or that he should seek independent legal advice on the preparation of the relevant legal documents.
He does not tell him that the lawyer he is forwarding the documents to are the Bank’s lawyer and is seeking the interest of the Bank, not his. For if there is any dispute or a conflict their client is the Bank not his. So from the outset, this should be made clear to the client.
The Banks and the law firms they represent are in league. The client is told it would be easier and cheaper for the documents to be prepared by their lawyers. They will do everything. Usually there is the Vendor and the Purchaser. The Banks lawyers end up acting for Vendor and Purchaser, Mortgagee (the Bank) and then they do the re-conveyance. Four different fees in one transaction.
The profession must be opened up. The Bank’s lawyer ought not and should not represent all parties. There is always talk to correct this situation, but no action, for there is a further conflict, some of the lawyers who have to institute the change of policy sit on the Executive of the Bar Association. There is no anxiety to do the right thing. They must not represent both parties.
The client must be told that he should seek independent legal advice, simply put he/she should have someone other than the bank’s lawyer to represent his/her interest. The Banks are only interested in the bottom line. They have no loyalty to the state nor the little man. They do not adjust Mortgage rates to relate to difficult economic times.
Instead they become more unremitting and hound the customers to make their payments. They are managed by non-Grenadians, their decision making policy is made outside the state. The Managers in Grenada have no discretionary power, they must reference decisions outside the state.
Are we really independent? Do we have any control over our economy? For one must not try to suppress opinions which you do not agree with; for it is much less profitable to oppose or suppress these ideas than to tolerate them. As a people we must learn to curb our self-indulgence and ostentation which may lead to growing vulgarity in the society.
We must as a people face the arduous days that lie before us in the warm courage of National Unity, with the clear consciousness of seeking old and precious moral values with the unequivocal purpose that emerges from the disciplined performance of duty by old and young alike.
As a ‘Post- Script’ I would say that we must “Make Peace with our past so that it would not mess up our present. Life is short, break the rules, forgive quickly. Kiss slowly, love truly and never regret anything that makes you smile”.