IN THE HIGH COURT OF JUSTICE BETWEEN AND

Transcription

1 TRINIDAD AND TOBAGO IN THE HIGH COURT OF JUSTICE Cv BETWEEN VISHNU CHATLANI 1 st Claimant PREETI CHATLANI 2 nd Claimant AND LA FORTRESSE COMPANY LIMITED 1 st Defendant D.T.L. PROPERTY DEVELOPERS COMPANY LIMITED 2 nd Defendant BEFORE THE HONOURABLE MADAME JUSTICE DEAN-ARMORER Ms. Nalini Sharma, Attorney-at-law for the Claimants Ms. Donna Prowell-Raphael, Attorney-at-law for the Defendants REASONS Introduction 1. On the 14 th March, 2014, I delivered an oral judgment in favour of the claimants. My reasons for so doing are set out below. Page 1 of 13

2 2. By their claim form dated the 2 nd July, 2010, as amended on the 12 th September, 2010, the claimants sought damages for breach of contract of an Agreement for sale 1 of a property described as No.36 La Fortresse Development situate in Long Circular Road, St. James. 3. The claimants also filed an accompanying statement of case. By their claim form they sought the following items of relief: 1) The sum of two hundred and forty thousand dollars ($240,000.00) being the refund of a deposit paid under an agreement for sale 2) The sum of four hundred and eighty thousand dollars ($480,000.00) being the refund of further sum paid under the agreement for sale 3) Interest on an overdraft facility in the sum of thirty eight thousand and eleven dollars and fifty cents ($38,011.50) 4) Interest on the deposit and the further sum being the sum of seven hundred and twenty thousand dollars ($720,000.00) at the rate of three percent (3%) per annum 5) Damages for breach of contract of the agreement for sale 6) Costs 7) Interest 8) Further and /or other reliefs 4. The defendants filed their defence on the 27 th October, 2010 and an amended defence on the 30 th December In their amended defence, the defendants disputed the claimants claim on the ground that the defendants were not in breach of the agreement for sale and as such the claimants were not entitled to the relief sought. 1 The Agreement Page 2 of 13

3 5. The Court heard the evidence of Vishnu Chatlani, Preeti Chatlani and Kameel Khan for the claimant and Lucien Delpesh of the defendant. Facts 6. The claimants were, at all material times, directors of a limited liability company, Target Discount Centre Limited. The first defendant was a limited liability company incorporated under the Companies Act, 1995 with registered office at 89 Abercromby Street, Port of Spain. The second defendant was a limited liability company incorporated under the Companies Act, 1995 with registered office at 42 Dundonald Street, Port of Spain. 7. The parties entered into the Agreement on the 23 rd January, 2007 between Trustees of Public Services Association of Trinidad and Tobago (as Lessee), the first defendant, La Fortresse (as Sub-lessor), the second defendant, D.T.L Property Developers Company Limited (as Developer) and the claimants (as Sub-lessee). The Agreement was annexed to the claimants bundle of documents and marked as A. 8. By the Agreement, the first defendant, La Fortresse agreed to sell and the claimants agreed to purchase the leasehold interest in a three bedroom two level duplex unit comprising two thousand one hundred and eighty-eight square feet (2,188 sq. ft.). The unit was yet to be constructed. The parties agreed that the unit was to be sold for the sum of two million four hundred thousand dollars ($2,400,000.00). 9. Upon signing the Agreement, the claimants paid a deposit of the purchase price in the sum of two hundred and forty thousand dollars ($240,000.00). This sum was paid by the claimants to the second defendant, DLT Property Developers Limited. It was also agreed that the balance of the purchase price would be paid at different stages of construction. Thus, the sum of four hundred and eighty thousand dollars ($480,000.00) would be paid to Page 3 of 13

4 the second defendant upon confirmation that foundation works had been completed 2 and a further four hundred and eighty thousand dollars ($480,000.00) on the completion of the superstructure. 3 Two (2) dates had been identified for completion: 31 st December, 2007 and 29 th April, In or around August 2007, the claimants were informed by the second defendant via that the foundation of the works for the duplex unit was completed. The claimants were also shown a video clip of the foundation. As a result, the claimants paid the first instalment of four hundred and eighty thousand dollars ($480,000.00). This sum was received by the second defendant who later signed a receipt and handed it to the claimants. 11. In or around April, 2008, the claimants were invited to make a site visit with one, Mrs. Alyson Edwards. At the site visit, they were allowed to see what was taking place in relation to their duplex unit. It was also at this visit that the claimants noticed that there were outstanding works left to be carried out. 12. Thereafter, the parties engaged in an exchange of written correspondence, as to the completion of the unit: Reference is made to these letters below: 4 th March, the second defendant submitted an update on the progress of construction of the units 27 th June, the second defendant invited the prospective home owners to view finishes options 14 th April, the second defendant wrote to the claimants pointing out that ninety (90) days has passed since the latter were notified of the completion of superstructure works. 2 See Clause 5 (iii) of the Agreement 3 See Clause 5 (iii) of the Agreement 4 See the witness statement of Lucien Delpesh for the second Defendant Page 4 of 13

5 The second defendant quoted clause 10 of the Agreement, which gave the developer the right to forfeit the deposit if the sub-lessee failed to complete the purchase on the date of completion. 29 th April, Messrs. Ashmeed Ali & Co wrote to the second Defendant contending that clause 10 was irrelevant and pointing out that the defendant had failed to complete on both the completion date and on the extended deadline. 25 th November, the second defendant contended that the claimants had reaffirmed their commitment to the Agreement by participating in the selection of finishes on 4 th July, Nonetheless, up to the date of the trial, the unit remained unfinished. Submissions 14. In her written submission, attorney-at-law for the defendants contended that the claimants by their actions have waived their rights to strict performance of the contract. In addition, counsel argued that the claimants are required to give the defendants a reasonable time within which to complete the contract. If time was at large, it fell to the court to determine whether the time given is a reasonable time. 15. To support these submissions, counsel relied on the cases of Charles Rickards Ltd v. Oppenhaim 5, Taylor v. Brown 6 and Stickney v. Keeble In response to the defendants submissions, attorney at law for the claimants filed written submissions on the 29 th May, In their submissions, the claimants relied on the case 5 [1950] 1 KB [1839] 48 E.R [1915] A.C.386 Page 5 of 13

6 of Ramdass Bidaisse v. Dorinda Yusidai Sampath 8.In that case, the court considered what was reasonable notice in the circumstances of that case. 17. The claimants also relied on the following authorities: a. Charles Rickards Ltd v. Oppenheim [1950] 1 K.B. 616 b. Knight v. Warren (2010) 77 WIR 203, c. Taylor v. Brown (1839) 48 E.R d. Stickney v. Keeble (1915) A.C. 386 e. Wadsworth v. Lydell (1981) 2 All ER 401 Law 18. Where in a contract for the sale of land, the time fixed for completion is not made of the essence of the contract, but the vendor has been guilty of unnecessary delay, the purchaser may serve upon the vendor a notice limiting a time at the expiration of which he will treat the contract as at an end In determining the reasonableness of the time so limited, the Court will consider not merely what remains to be done at the date of the notice, but all the circumstances of the case, including the previous delay of the vendor and the attitude of the purchaser in relation thereto: Stickney v. Keeble In Stickney v. Keeble 11 [HL] the plaintiff, a farmer, agreed to purchase agricultural land from the defendant. The land was to be used as a farm. The plaintiff paid a deposit on the purchase-money. The date fixed for completion was October 11 th. At the date of the contract, the defendants had no legal title to the land. The defendants delayed completion 8 PCA #33 of Stickney v Keeble (1915) A.C Ibid at Ibid Page 6 of 13

7 of the plaintiff's contract in order to complete their title and to procure the simultaneous execution of the conveyances to the sub-purchasers. On January 30 th, 1912, the plaintiff, who had repeatedly pressed for completion, gave notice to the defendants, requiring them to complete in a fortnight, and, on their failure to complete within the time, brought an action for the return of his deposit. The court came to the conclusion that there had been unnecessary delay in completion for which the defendants were responsible, and that in the circumstances the time limited by the notice was sufficient. 21. Stickney v. Keeble was applied by the Court of Appeal in Charles Rickards Ltd v. Oppenhaim 12 in which the court found that the reasonableness of the a period of notice of four (4) weeks had to be judged at the time at which it was given, and that it could not be held to be bad because there were unanticipated difficulties in making delivery after notice had been given. 22. In considering whether the time so limited is a reasonable time the Court will consider all the circumstances of the case. 13 Relevant circumstances include, but are not limited to, (1) the fact that the purchaser has continually been pressing for completion, (2) the fact that the purchaser has before given similar notices which he has waived, (3) the fact that it is specially important to him (purchaser) to obtain early completion. 14 The Claim for Loss of Rental Income 23. The principle to be applied in relation to the claimant s claim for loss of rental income on the property was re-stated in Knight v Warren (2010) 77 WIR 203 in which the Court of 12 [1950] 1 K.B Ibid at Ibid per Lord Parker Page 7 of 13

8 Appeal of Bermuda affirmed the trial judge s application of the legal test and accepted that the question one ought to ask is whether the loss was a type of loss for which the defendant can reasonably be assumed to have assumed responsibility? In that case, the trial judge found that since the defendant (appellant) admitted that he knew the claimants (respondents) were proposing to rent the upper unit, the defendant (appellant) might reasonably be assumed to have accepted responsibility for any loss of rental income suffered by virtue of his breach of contract by failing to complete the house within a reasonable time The Court of Appeal found that there was no reason to doubt the judge s conclusion, since this was made on the basis of the appellant s (defendant) admission. 17 Reasoning and Decision 26. The facts which are relevant to these proceedings are undisputed and the Courts decision depends on a finding of law. 27. As stated supra, on the 23 rd January, 2007 the parties entered into the Agreement for the sale of a three (3) bedroom two-level duplex unit at No. 36, La Fortresse Development Long Circular Road, St. James. 28. The salient terms of the Agreement are summarised below: At Clause 4 of the agreement, the parties agreed on a purchase price of two million, four hundred thousand dollars ($2,400,000.00). 15 Knight v Warren (2010) 77 WIR 203 at para Para 3 of the Headnote at p Ibid at para 58 Page 8 of 13

9 It was agreed at Clause 4 that a deposit of two hundred and forty thousand dollars ($240,000.00) would be payable on execution of the agreement. It is not in dispute that this sum was in fact paid as agreed. Clause 5 sets out the agreed schedule for payment of the remaining purchase price. It was agreed that four hundred and eighty thousand dollars ($480,000.00) would be paid when it was confirmed that the foundation works were completed. It is not disputed that this sum was paid. Another payment would be made on completion of the superstructure. The remaining balance would be paid upon delivery of the certificate of completion. Clause 5 (iii) identified a date of completion as being December 31 st, Paragraph 9 of the agreement provided for an extension of one hundred and twenty (120) days if the Sub-Lessor failed to complete. Clause 10 of the agreement provided for the Sub-Lessors failure to complete in this way: Should the sub-lessee fail to complete...the Sub-Lessor...shall be entitled to determine this agreement and forfeit ten percent (10%)... Clause 12 provided for failure on the part of the Sub-Lessor to complete: Should the Sub-Lessor fail to complete...on the date of completion...the Sub-Lessor shall refund all monies paid by the Sub-Lessee...with interest at the rate of three percent (3%) per annum... Clause 19 required that a waiver be in writing in this way: Page 9 of 13

10 ...no modification amendment alteration...or waiver of this agreement or any of its provisions shall binding upon the parties unless made in writing and duly signed by the party or parties to be bound. 29. It is not disputed that by the extended date of completion on the 29 th April, 2008, the Sub- Lessor had not completed. Two (2) months thereafter on the 4 th July, 2008 the claimants selected the finish for the duplex. 30. What followed was a series of correspondence passing between the parties, whereby the claimants were seeking permission to sell the duplex and the second defendant was insisting that the claimants had waived their right to insist on the date of completion. Of significance is the letter of the 25 th November, 2009, which was issued by Pepita Narinesingh for the second defendant. By this letter, learned attorney contended that the claimants reaffirmed their commitment to the agreement, by participating in the selection of finishes In 2010, at the instance of the claimant, pre-action protocol letters were sent to each defendant. On May 19 th, 2010, the claimant s attorney-at-law wrote to D.T.L. Property Developers and on the 9 th June, 2010, a letter was sent to La Fortresse. These letters set out the history of the course of dealings between the parties and called for completion within fourteen (14) days. 32. The single issue which arose for my consideration was whether the claimants could properly insist on completion within the fourteen (14) days specified in the pre-action protocol letter or whether, by selecting finishes in July, 2008, they had waived their right to insist on a date of completion. 18 See para 32 - Supra Page 10 of 13

11 33. In my view, the parties are bound by the clear terms of their written agreement which specifies at Clause 19 that any waiver must be in writing. There was no written waiver and in my view the defendants were in breach of the agreement since the 29 th April, 2008 and are bound by Clause 12 of the Agreement to refund the sums paid plus three percent (3%) per annum. 34. In the event however that I was wrong in this finding and assuming that there had been waiver of the completion date, I proceeded to consider whether the claimants could properly call upon the defendants to complete within fourteen (14) days of the pre-action letter. 35. The relevant authorities assert that it is open to the aggrieved party having waived the completion date to make time of the essence your by notifying the defaulting party and specifying a reasonable time within which to complete. What is reasonable depends on all the circumstances of the case see: Stickney v. Keeble. 19 This authority was applied by their Lordships at the Privy Council in Bedaisee v. Sampath 20 where Lord Nicholls of Birkenhead found that a period of six (6) days was not unreasonable because it did not come as a bolt out of the blue Although the facts of this case are not identical to those of Bedaisee v. Sampath, it was my view that the words of Lord Nicholls were applicable to this case. The request for completion in fourteen (14) days was made after the expiration of two (2) years following the date set for completion. It was also made after numerous letters emanating from the claimants seeking to have the defendants dispose of their interest in the unit. In my view, 19 Stickney v. Keeble [1915] AC PCA #33 of Ibid at p 4 Page 11 of 13

12 the stipulated fourteen (14) days were not a bolt out the blue but rather the last indication that the claimants patience had eventually worn out. 37. In my view the period of fourteen (14) days was reasonable. It was implied that the claimants would pay the balance if completion was forthcoming, within that time. In my view, the claimants are entitled to stand on the clear terms of Clause 12 and are entitled to recover all monies paid plus interest at the rate of three percent (3%) per annum. This would be the sum of two hundred and forty thousand dollars ($240,000.00) being the sum paid as the deposit plus four hundred and eighty thousand ($480,000.00) as the sum paid upon completion of the foundation works. Together these sums add up to seven hundred and eighty thousand dollars ($780,000.00). 38. The claimants were also entitled to be compensated for loss of a type that the defendants could reasonably be assumed to have assumed responsibility. 22 It was accepted by Mr. Lucien Delpesh 23 that buyers frequently buy properties for the purpose of renting them out and that they frequently buy with the assistance of a mortgage or overdraft facility. 39. The claimants are therefore entitled to a reimbursement of interest incurred on the overdraft facility of thirty-eight thousand and eleven dollars and fifty cents ($38,011.50). 40. I therefore entered judgment for the claimants and made the following orders: (i) The defendants to reimburse the claimants the sums paid: seven hundred and twenty thousand dollars ($720,000.00) plus interest at the rate of three percent (3%) per annum. 22 See Knight v. Warren (2010) 77 WIR 203 at General Manager of and sole witness for the second defendant Page 12 of 13

13 (ii) The defendants to pay to the claimants, damages for breach of contract in the sum of thirty-eight thousand and eleven dollars and fifty cents ($38,011.50) which represents interest incurred on the overdraft facility. The sum of (i) and (ii) above was one million, two hundred and fifty-five thousand, three hundred and eleven dollars and fifty cents ($1,255,311.50) 41. I also ordered that the defendants pay cost to the claimants of one hundred and twenty-one thousand, seven hundred and sixty-five dollars and fifty-eight cents ($121,765.58) and that there be a stay of execution of twenty-eight (28) days. Dated this 14 th day of April, M. Dean-Armorer Judge Page 13 of 13