IN THE SUPREME COURT OF BELIZE, A.D. 2011 CLAIM NO. 440 of 2007 PATRICIA STURMAN CLAIMANT AND DEBORAH DEAN RAE KILBY 1 st DEFENDANT 2 nd DEFENDANT Hearings 2011 6 th July 12 th August 18 th August 25 th October Mrs. Melissa Balderamos Mahler for the claimant. Mrs. Naima Badillo Barrow for the defendants. LEGALL J. JUDGMENT 1. The claimant and first defendant met around 1990 in Germany, and they became lovers and started living together in a relationship. The claimant worked in the hotel industry and also as a sales person in electronics equipment. The said defendant was an officer in the US army stationed in Germany. On the defendant s retirement from the 1
US army around 1996, both parties came to Belize to invest in the hotel business and to start a new life together in Belize. They chose to live and invest at Hopkins Village, Stann Creek District in the north of Belize. 2. On the 26 th November, 1997, the claimant and defendant purchased jointly a parcel of land being lot No. 5 (lot 5) situate at Hopkins Village for the price of BZ$25,000, and a deed of conveyance of the same date was issued to them jointly to hold the said lot 5 in fee simple absolute in possession. Behind lot 5, there is a parcel of land, namely lot 48, in the said Hopkins Village; and on 16 th August, 2001 lot 48 was bought for BZ$24,000, and an indenture of same date was issued in the names of the claimant and defendant as joint owners with all buildings and erection thereon in fee simple absolute. Located on lot 5 was a building which housed a business known as Tipple Tree Beya, which is a guest house with about three rooms and a cabana. They both resided at the guest house and carried on the business registered under the Business Names Act Chapter 204 of the Laws of Belize, and a certificate of registration for Tipple Tree Beya was issued on 3 rd April 1998 in both of their names. Both the claimant and the defendant had applied on 1 st April, 1998 to register the business. In the same year 1998 they were granted the status as residents of Belize. 3. On 15 th January, 2003, the first defendant and the claimant applied to have the business registration transferred solely in the name of the claimant. On 22 nd January, 2003 a certificate was issued stating that 2
the business Tipple Tree Beya was transferred in the name of the claimant. The 1 st defendant alleged that the claimant forged her signature to effect the transfer. 4. Things progressed fairly well with the couple up to around the year 2000 when problems emerged in the relationship resulting in frequent fights, abuse and quarrels. After one of the many heated quarrels and fights, the 1 st defendant left the premises in which they lived, and their relationship ended around July 2001. The couple, since they could not live together had to decide how to share lot 48 and lot 5 including the Tipple Tree Bay business. They came up with a solution. They called it a land sale agreement and it was dated 21 st November 2001, and signed by both parties, and witnessed before a justice of the peace. 5. The land sale agreement is central to this case, and it is given in the appendix to this judgment. Briefly, the agreement provides that the first defendant shall sell her interest in lots 5 and 48 to the claimant. The agreed price of the first defendant s share was $25,000 for lot 48 and $46,000 plus interest for lot 5. This claim by the claimant is only in relation to lot 5, as lot 48 was conveyed solely in the name of the claimant by deed dated 25 th March 2002. This claim is also only against the No. 1 defendant, as proceedings against the second defendant were resolved by virtue of court order dated 9 th May, 2008. The agreement states in what manner the purchase price for lot 5, which is described as Property B in the agreement, is to be paid. The agreement states at clause 2 as follows: 3
2. The purchaser shall pay the vendor the total purchase price of $46,000.00 in consideration for the vendor s interest in property B. The purchase price shall be paid in the following manner: (a) The purchaser shall pay the vendor $8,000.00 upon the execution of this agreement (the receipt whereof the vendor hereby acknowledge) and; (b) The purchase price balance of $38,000.00 shall be paid by the purchaser to the vendor in monthly installments of $611.00 commencing on the 1 st of November 2006 or after the completion of the purchase by the purchaser from the vendor of Property A whichever is sooner. The purchaser shall pay the vendor 5% interest on the decreasing balance of the purchase price. 6. The defendant claims that though the ownership documents for lot 5 have the names of the claimant as joint owner, the facts are that monies to purchase this lot were supplied solely by the defendant; and that the claimant s name was inserted in the documents out of their friendship and to assist her with her application for residence. The claimant admitted that most of the monies put in the relationship came from the defendant. Moreover, states the defendant, the claimant defaulted in paying the installments of the purchase price for lot 5 as stipulated in clause 2 above of the land sale agreement. Paragraphs 10 and 12 of the said agreement suggest a cancellation of the agreement 4
for breach of any of its terms. Paragraphs 10 and 12 of the agreement state: 10. The vendor shall convey to the purchaser a marketable title free and clear of any encumbrances. Upon cancellation of the contract by either of the parties for breach of any of the terms herein by either of the parties, the aggrieved party may seek remedy in contract in the Supreme Court of Belize. 12. In the event the vendor shall not receive a payment required hereunder, she shall send to the purchaser written notice (by registered mail to the purchaser s address) of such and the purchaser shall have sixty (60) days after the receipt of such notice to determine the reason for the lack of payment and to cure the same. The purchaser shall not be deemed to be in default under this agreement unless and until the expiration of the foregoing notice and cure period. If the purchaser fails to cure the default within the 60 day period as described above, this agreement will be deemed to have ended. If the purchaser defaults and cures the default within the prescribed period of time, the vendor shall waive any right she may have to sue the purchaser for breach of contract. 5
7. The defendant alleged in a letter dated 22 nd October, 2004 to the claimant that the claimant was in breach of clauses two of the land sale agreement by not paying the installments as agreed and was indebted to her in excess of $100,000. The defendant in the letter said that if the claimant refused to pay the debt, legal action would be considered. More than two years later, on 13 th February, 2007, the defendant by a document entitled severance of joint tenancy, sworn before a justice of the peace, purported to sever the joint ownership of lot 5 on the basis of such non payment. 8. On 19 th February, 2007 the first defendant, on the basis that the tenancy or ownership was severed, sold to the second defendant the said lot 5 for $100,000, and a deed of indenture for the lot was issued in his name. The second defendant therefore sent a handwritten notice in April 2007 to the claimant, who was in occupation of the said lot 5, of his intention to evict her from the said property. This was followed by a letter from the second defendant s lawyer dated May 2007 to the claimant demanding vacant possession of lot 5. The court in a default judgment dated 9 th May, 2008 declared that the second defendant s deed of indenture was void. The claimant states that as a consequence of the said order, no further proceedings are taken against the second defendant who has not participated further in this matter. 9. On 21 st September, 2007 the claimant filed a claim against both defendants. But the remaining claim is against the first defendant only, and is for the following: 6
The claim is against the First Defendant: 1. Specific performance of Land Sale Agreement dated November 21, 2001; 2. Damages in lieu of or in addition to specific performance. 3. An injunction restraining the first defendant, her agents, servants or assigns from selling, transferring, leasing, charging, mortgaging, dealing with or otherwise deposing of Lot No. 5 (800.00 square yards) situate in Hopkins village, Stann Creek District as shown on Plan No. 629 of 1997 attached to Minister s Fiat (Grant) No. 629 of 1997. 4. Damages for detinue and conversion of the claimant s title deeds, personal correspondence, bank documents, business documents and receipts. 5. Delivery up of the said documents and receipts. 6. Costs. 7. Such further or other relief as the court deems just. 10. The court (Arana J) on 18 th October, 2007, granted an injunction that restrained the defendants until hearing and determination of the claim from dealing, selling, transferring or creating an encumbrance on lot 5 together with the buildings and erection thereon. On 10 th June, 2008, the court (Hafiz J) granted an injunction restraining the defendants from in any way dealing with the Tipple Tree Beya business. 11. The main questions for the court are whether the claimant breached clause two of the land sale agreement by not paying the installments and interests in accordance with that clause; and if there was such a 7
breach, whether the defendant was entitled to terminate the agreement because of that breach. The claimant swore that she paid the full purchase price and interest for lot 5, as well as the full price for lot 48, and that she always made the payments on time. The claimant disclosed a schedule of payments and a document called loan amortization tables, as well as cheques payable to the defendant, to establish that she paid the full purchase price for lot 5 with interest. The defendant has accepted that the payments mentioned in the schedule of payments were made by the claimant, except payments listed as numbers 11, 21, 25, 27, 33, 34, 35, 37, 51 in the said schedule of payments 12. There is therefore a dispute between the parties concerning payments for lot 5 in relation to the numbers listed above, and also the payment of interest. Those alleged outstanding payments in relation to the numbers above of the schedule amount to a total of $8,198.00. The claimant has admitted in her evidence that on 2 nd January, 2009 she made a final payment for Lot 5 by Scotia Bank cheque for $10,403.83 to the defendant, but this cheque was returned to her. In effect, the claimant admits that the defendant did not receive this final payment, which is more than the total amounts corresponding to the numbers above, which the defendant alleged as unpaid. 13. There is also clear evidence that the claimant failed to pay to the defendant the full amount of the individual installments agreed to in the land sale agreement, and also failed to pay the installments on time. In other words, on several occasions installments paid by the 8
claimant were less than the individual installments agreed to in the said agreement; and on several occasions the payments were late. The question is whether the short and late payments entitled the defendant to terminate the agreement or contract. The claimant in addressing the short payments, which she accepted occurred, claimed that the first defendant had agreed to the short payments, and that the short payments came about because bills that were payable by the said defendant, were paid by the claimant; and therefore were deducted by the claimant from the installments. The defendant denied this claim by the claimant. I do not accept, on a balance of probabilities, this explanation by the claimant for the short payments, because the evidence shows deep animosity between the parties, which is not consistent with the claim that the defendant, in those circumstances, agreed to the short payments and such deductions. 14. Even though the defendant purported to terminate the contract by letter dated 22 nd October, 2004, which stated that the land sale agreement was null and void, it must be noted that the letter did not expressly use the words that the contract was terminated by the defendant. But by the severance of the joint tenancy by the defendant on 15 th February, 2007, the defendant by so doing purported to terminate the land sale agreement. Yet the defendant continued to receive installments from the claimant under the said agreement as payment for lot 5, at least up to December, 2009. There is clear evidence that payments made by the claimant by cheque to the defendant was cleared by the defendant and debited from the claimant s account after the purported severance of the joint tenancy. 9
Moreover, as we saw above, the defendant admitted that payments listed in the schedule of payments were made by the claimant, except the numbers mentioned above, the last of such payment is dated December 2008, more than a year after the purported severance of the joint tenancy and about four years after the purported termination of the land sale agreement. 15. Accepting that the claimant breached the contract by not making the full individual installments as agreed and by late payments, when the defendant accepted payments from the claimant after the said breach, the defendant may be considered as having waived her right to treat the land sale agreement as terminated. The late payments of installments which were sometimes less than the installments agreed to, ought not to be considered, in the circumstances of this case, as such a breach, that went to the core or root of the agreement as to bring the contract to an end, especially in a situation where the defendant continued after the alleged breach, to receive payments under the contract. The defendant may have, by her conduct, led the claimant, who was in default in paying the installments, to believe that she will not exercise the right to terminate the contract. 16. Where a party leads the other to suppose that the strict rights arising under a contract will not be enforced, or will be left in suspense, or held in abeyance, the person who otherwise could have enforced those rights, will not be allowed to enforce them where it would be inequitable to do so, having regard to the dealings which have thus taken place between the parties. This doctrine is often referred to as 10
waiver by estoppel : see Hughes v. Metropolitan RY 1877 2 AC 439 at page 448. The basis of the doctrine may be the need for the convenience of consistency in commercial conduct. One should not be allowed to approbate and reprobate, blow hot and cold especially in commercial transactions: see Panclaud Frieres SA v. Establishments General Grain Company 1970 1 Lloyd s Rep. 53 at p. 59 per Winn LJ. 17. The defendant has admitted the payments by the claimant specified in the schedule of payments, except the numbers in the schedule referred to above. According to that schedule the defendant received numerous payments from the claimant at least up to December 2008. If the true intention of the defendant was to terminate the contract, why did she continue to accept the admitted installments mentioned in the schedule after the purported termination of the agreement. It must have been that she wanted to receive and benefit from the installments under the said land sale agreement. By doing so she led, in my view, the claimant to believe, that the said agreement was still in force. It is true that in February 2007 she prepared a severance document mentioned above and three days later purported to sell lot 5 to the second defendant. But the first defendant by these actions, having taken the benefit of the agreement after October 2004, appears to want also to benefit financially from the severance and sale to the second defendant of the lot 5. 18. In my view, the purported termination and severance of the agreement cannot stand because of the aforementioned waiver of the contract by 11
the first defendant, which resulted in the full payment of the purchase price for lot 5 by the claimant, except the final payment on 2 nd January, 2009 for lot 5 of $10,403.83 which the claimant accepted was returned to her by the said defendant. 19. But the first defendant states that the payments made by the claimant after the purported termination of the agreement were rent occupational rent to which the defendant was lawfully entitled. There was therefore according to the defendant, no waiver. These payments were, according to the submission, separate and distinct from the provisions of the land sale agreement. The defendant in support of this submission relied on Maxwell Frances v. Timothy DeGarve CA No. 26 of 2003 (Court of Appeal Belize unreported) where Barrow JA says that there is no reason in principle why a vendor should be refused occupation rent.... occupation rent is recoverable from a purchaser in possession. But these pronouncements have to be considered in the context in which they were made. 20. In Maxwell it was accepted that the defendant was in breach of a contract to purchase land, which contract was terminated because of the breach; but the defendant remained in possession of the land. In that scenario, the contract for a time existed, and subsequently was brought to an end; and the court decided that in that scenario occupation rent arose. Occupation rent comes into the picture when the contract is recognized to have existed and subsequently to have been brought to an end. The contract, in this matter before me, as I 12
held, was not lawfully terminated or brought to an end, due to the fact that the claimant paid, and the first defendant received, almost the full purchase price for lot 5, which amounted to a waiver of the agreement, except the amount of the final cheque which was returned to the claimant. Occupation rent, in my view, does not apply in a situation where the contract to purchase land has not been lawfully terminated or brought to an end. I therefore hold that the first defendant has waived the breaches of the agreement by the claimant and is bound by the land sale agreement. 21. The first defendant further states that the claimant failed to pay the interest agreed to in the land sale agreement with respect to lot 5. The outstanding interest, according to the defendant, amounts to $158,000; but there is no calculation or explanation from the defendant showing how this figure was arrived at. The claimant states that she paid all the interest in relation to lot 5, which interest was included in each installment she paid. She had disclosed, as we saw above, amortization tables showing installments and interest. The claimant gave evidence that the price for lot 5 was $46,000. She made a down payment of $8,000, the balance to be paid by installments and had to pay 5% interest on the reduced balance. This is accepted by the defendant. Another dispute arises as to whether the 5% interest on the reduced balance was paid. The claimant said that she paid interest in the sum of $6,630. In other words, according to the claimant, she paid $46,000. plus $6,630 as interest for lot. 5. It is worth mentioning that in the defendant s counterclaim no claim is made for such interest. I accept the claimant s evidence, and on the evidence as a 13
whole, I am satisfied, on a balance of probabilities, that the claimant has proven that she paid the interest in accordance with the agreement for lot 5. 22. In relation to the claims for damages for detinue and conversion of documents belonging to the claimant, there is insufficient evidence of the damage or loss suffered by the claimant as a result of being deprived of the use of these documents which are listed at paragraph 74 of the claimant s witness statement. Moreover, when these documents went missing, other persons in addition to the defendant, were in the claimant home at lot 5; and I am not satisfied, on a balance of probabilities, that the defendant had taken and is in possession of all the documents stated by the claimant as missing. 23. The defendant counterclaimed against the claimant. The counterclaim filed on 31 st October, 2007, contains numerous reliefs, about 20 in number not drafted in the form and structure as would be recommended for process in the Supreme Court, but which was subsequently amended on 16 th July, 2008 to counterclaim as follows: (1) An account of all sums due from the claimant to the first defendant in respect of the receipts from the operation of the business known as The Tipple Tree Beya Resort by the claimant; (2) An account of all sums due from the claimant to the first defendant in respect of the Tropic Air agency; 14
(3) An account of all sums due from the claimant to the first defendant in respect of the tour company formerly known as Tripple Tree Tour Company; (4) An order for payment by the claimant to the first defendant of all sums found to be due from the claimant to the first defendant on the taking of the accounts in (1), (2) and (3) above; (5) Damages for breach of contract; (6) Interest pursuant to section 165 of the Supreme Court Act; (7) Costs; and (8) All such further or other relief as may be just including all further necessary or appropriate accounts, injuries and directions. 24. In light of my finding above, that the first defendant by conduct waived the breaches by the claimant and that the business Tipple Bay Tree was part of lot 5 for which the purchase price and interest were fully paid by the claimant except the amount of the cheque for $10,403.83, I decline to make the order claimed at (1) and (5) of the counterclaim. 25. In relation the claims 2 and 3 of the counterclaim, the defendant states that she started companies named Tropic Air Agency and Tipple Tree Tours. She admits that there is nothing in the land sale agreement concerning Tropic Air. There is no evidence from the defendant, on whom the burden of proof lies on the counterclaim, that sums were received by the claimant from these companies. There is no evidence 15
from the defendant as to the extent of the business, if any, and the amount of money that these companies generated. The claimant testified that no monies were made from the tour operations and that there was no tourist package. The claimant testified that in 2001 there were flights. But there is no evidence from the defendant as to how many flights were made and whether there are records of such flights. The claimant states there are no records of flights. The burden is on the defendant to prove the counterclaims at paragraph 2 and 3 on a balance of probabilities. I am not satisfied on a balance of probabilities, that the defendant has proven there are such records or accounts and that sums are due from the claimant to her as claimed in paragraphs 2 and 3 of the counterclaim. As a consequence paragraph 4 of the counterclaim no longer arises. The counterclaims aretherefore dismissed. 26. Conclusion The claimant has proven that she paid in accordance with the provisions of the land sale agreement, the purchase price and interest in relation to the purchase of lot 5, except an amount of $10,403.83 paid by cheque by the claimant to the defendant, which the claimant admitted was returned to her. The claimant breached the agreement by late and short payments of installments for the said lot, but the defendant by her conduct waived the breach, and therefore the land sale agreement was not lawfully terminated and remained in force. The defendant has failed to prove the counterclaim. 27. I therefore make the following orders: 16
(1) The defendant is ordered to convey title for lot 5 situate at Hopkins Village Stann Creek District as shown in a Plan No. 629 of 1997 attached to Minister Fiat No. 629 of 1997 to the claimant on or before 1 st April, 2012, failing which the Registrar of Lands is by this Order directed and authorized to take such action, and to give such directions, as may be legally required for purposes of conveying the said lot 5 to the claimant on the payment by the claimant by such fees or payments, and the filing of such documents, as are requested of the claimant for such conveyance of lot 5 to the said claimant. (2) The claims for detinue, conversion and delivery of documents are refused. (3) The claimant is ordered to pay before 1 st March, 2012 to the first defendant the sum of $10,403.83 as the balance of the purchase price for lot 5, and in the event of refusal of the defendant to accept same, or if such payment cannot be made in any account of the defendant, the claimant is ordered before 1 st April, 2012 to lodge the said sum at the Supreme Court to be held for and on behalf of the said defendant (4) An injunction is granted restraining the first defendant, her agents, servants or assigns from selling, transferring, leasing, charging, mortgaging, dealing with or otherwise deposing to any person, except the claimant, lot 5 situate at Hopkins Village, Stann Creek District as shown on Plan No. 629 of 1997 attached to Minister s Fiat (Grant) No. 629 of 1997. 17
(5) Either party or the Registrar of Lands may apply to the court to extend the dates mentioned in paragraphs 1 or 3 or both, of this order. (6) The claims in the counterclaim are refused. (7) Each party to bear her own costs. Oswell Legall JUDGE OF THE SUPREME COURT 25 th October, 2011 APPENDIX LAND SALE AGREEMENT Paragraph 5 P.T.O. 18
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