Liberia: Landlord, Lebanese Lessee Head to Supreme Court over Property Ownership


MONROVIA – The case involving a Liberian landlord and the Lebanese lessee could headed to the full bench of the Supreme Court of Liberia.  This stems from a Writ of Ceteriori filed by the lawyers representing Mr. Mohammed Kafel asking the Justice in Chambers His Honor Yamie Gbeisay to overturn the ruling of the 6th Judicial circuit, Civil law court “A” assigned judge Scheaplor R. Dubar to disallow Mr Kafel’s request to dismiss a motion seeking summary proceedings to recover possession of real property filed by Mr. Morley Paul Kamara.

 By: Henry Karmo, [email protected]

The motion to dismiss was filed by lawyers representing Mr. Mohammed Kafel.  Mr. Kafel’s motion to dismiss grows out of an action of summary proceedings to recover possession of a real Property instituted by the respondent /petitioner against Movant/respondent on January 5,2023. The movant /respondent filed his return along with a 6-count motion to dismiss the petitioner’s action. 

Whilst the case has been ongoing for a while, lawyers believe the rulings could have significant implication for the banking sector and the larger economy and also shows how Lebanese lessees take advantage of the laws of the land to the detriment of Liberians. 

At the heart of the case is whether a lease agreement entered into after a mortgage is superior to the mortgage.

Case background

According to court records, in July 2021, Mr. Morley Paul Kamara purchased a real property through foreclosure involving International Bank Liberia Limited (IBLL).  After purchasing the property, the new owners met the lessee with the view of continuing the leasehold but were shocked to learn that the lease was for $20,000 a year and for a period up to 2041.  First, the lease was executed after the mortgage agreement with IBLL.  Secondly, the property which is located on the beach side of 17th street has 10 apartments, with residents paying minimum $24,000 per year per apartment.

In furtherance to what appears to be a complicating matter, the current lessee (Kafel) participated in the initial auction process through a proxy and even personally met the CEO of IBLL on the matter.  During all this period he did not disclose a lease agreement.  In today’s market, the property with over 10 apartments located on 17th street rents for over $100,000.  Many believe that Mr. John Gbedze, a once wealthy and astute businessman, now deceased would never sign such a lease.  The educated guess is that the deed was fraudulently done after his death and backdated.

Upon learning of the “questionable” agreement, the buyer (Mr. Kamara) requested the bank’s (Who sold the property) lawyers to ask the Commercial Court to evict the occupants.  When the writ of eviction was filed.  The leaseholder Mr. Mohammed Kafel’s lawyers filed a Petition for Adverse Claim suit with the Commercial Court. 

The Commercial Court ruling states: “Section 44.46 of Civil Procedure Law, Liberian Code of Law Revised, Title 1, also prescribed when an adverse claim may be filed: “Prior to the application of property by a sheriff or receiver to the satisfaction of a judgment, any interested person institute a special proceeding against a judgment creditor to determine the rights of adverse claimants to the property by serving a notice of petition upon the sheriff or receiver and upon the judgment creditor in the same manner as a summons”. 

Based on the cited law, the court declared that “there can be no doubt that the adverse claim was not filed in time when this Court still had jurisdiction.  Even if it was filed in time and/or when the Court had jurisdiction, this Court would still not have authority or power to grant the relief prayed for because it has no jurisdiction to adjudicate title to real estate or priority of interest in real property whether through regular hearing or determination of an adverse claim.” 

According to court records, In the Commercial Court, the buyer’s title was recognized by the lessee and Judge Mappy acknowledged and affirmed when she wrote: “Certainly, the sale to the second respondent not being contested by the Petitioner the second respondent’s title to the previously mortgaged property is affirmed and the said second respondent may through the appropriate proceedings before a court of competent jurisdiction, enforce its title to the property, subject to any and all valid encumbrances and lien in accordance with the applicable law on the creation, validity and priority of interests in realty.”

In the Motion to Dismiss filed in the Civil Law Court, Mr. Kafel’s lawyers contend that the buyer is obliged to honor the lease.  Mr. Kamara’s lawyers counter that there were two lease agreements. 

One was entered into prior to the mortgage agreement between Mr. John Gbedze and IBLL and that lease expired in May 2022.  Because that lease was entered into prior to the mortgage, the buyer was obliged and has honored it.  But the buyer contends that he will not honor any lease agreement done after the mortgage agreement because in foreclosure liens follow the “first in time, first in right” rule and therefore the Bank’s lien is superior to the leaseholder.  This is like a landowner selling a property to two persons.  The person with the oldest registered deed takes ownership.

However, Justice Advocates and Partners headed by Cllr G Moses Paegar argue that the lease entered into after the mortgage grants his clients possessory title and therefore the matter should be handled through ejectment action.  Cllr J Johnny Momoh, lawyer for the buyer, disagrees and argues that the lease is not even valid.

 A Liberian businessman who also prefer anonymity because he too has a land case before the courts added: “this shows how the Lebanese are manipulating the land issue.  Why did Kafel try to buy the property?  For a property worth close to a million dollar, and it would lease for $20k a year!  That is an insult and it explains why the Lebanese get richer and their landlords get poorer”

According to a senior Liberian banker, “if Kafel prevails, the economy will crumble.  Nearly all bank loans are secured by mortgages.  I think Kafel should hold the Gbezee estate for any problems or losses and not the bank or the buyer.

 “I do not even know why the Supreme Court will entertain any debate on this matter.  Already, some rulings affecting some banks have caused serious jitters in the sector.  If they say you can mortgage predating a lease is inferior to the lease, we should call the US Ambassador.  Because the economy will die and Liberia will be the only country with such a law in the world.

FPA attempt to speak to the buyer proved futile.  We were told he’s currently out of the country on a protracted business trip.  A lady who claimed to be his wife Ms. Shinola Brown replied to our email stating that “my husband is visiting his logging operations in Sierra Leone and not reachable by phone or email.  I am aware of the case.  He does not like publicity about his business activities. 

But as an American with over 20 years practicing law in the USA, these are fairly simple matters and are dealt with at state level and would never reach even the state Supreme Court.  Yes, a mortgage doesn’t stop you from leasing your property but that is on the presumption that you are complying with the terms of the mortgage.  Once you default, it is a different ball game.  Bankruptcies are like that as well.  Why the courts would honor the older land deed but not a mortgage agreement that is older than a lease?  And if the lease was reflective of market price, why would the Lebanese offer to increase by 50 percent to $30,000?  This is some serious cognitive dissonance.”