American Jewellery Company Ltd and Others v Commercial Corporation Jamaica Ltd and Others

• Jurisdiction: Jamaica
• Judge: Morrison JA,Dukharan JA,Brooks JA
• Judgment Date: 20 June 2014
• Neutral Citation: JM 2014 CA 64
• Docket Number: CIVIL APPEAL NO 6/2007 APPLICATION NO 100/2013
• Court: Court of Appeal (Jamaica)
• Date: 20 June 2014

Between

American Jewellery Company Limited

1st Applicant

and

Indru Khemlani

2nd Applicant

and

Roshan Khemlani

3rd Applicant

and

Sham Khemlani

4th Applicant

and

Raj Khemlani

5th Applicant

and

Commercial Corporation Jamaica Limited

1st Respondent

and

Tewani Limited

2nd Respondent

and

Gordon Tewani

3rd Respondent

and

Jennifer Messado

4th Respondent

[2014] JMCA App 16

Before:

The Hon Mr Justice Morrison JA

The Hon Mr Justice Dukharan JA

The Hon Mr Justice Brooks JA

CIVIL APPEAL NO 6/2007

APPLICATION NO 100/2013

JAMAICA

IN THE COURT OF APPEAL SUPREME COURT

CIVIL PROCEDURE - Judgment - Application for correction of judgment delivered by the Court - Civil Procedure Rules 2002, Rule 42.10(1) - Court may correct clerical mistake in a judgment

Mrs Denise Kitson QC and Mrs Suzanne Risden-Foster instructed by Grant, Stewart, Phillips & Co for the applicants

Miss Carol Davis and Miss Nicole-Anne Fullerton for the 1 ^st , 2 ^nd and 3 ^rd respondents

Nigel Jones instructed by Nigel Jones & Co for the 4 ^th respondent

Morrison JA

1 By notice of application for court orders filed on 10 September 2013, the applicants (“American Jewellery”) seek an order that this court ‘clarify and/or correct the error arising in its Judgment of 1 ^st October 2010’. The ground of this application is that there is an inconsistency between the judgments delivered by the members of the court and its orders as drawn.

2 Rule 42.10(1) of the Civil Procedure Rules 2002 (“the CPR”) provides that ‘[t]he court may at any time (without an appeal) correct a clerical mistake in a judgment or order, or an error arising in a judgment or order from any accidental slip or omission’. This is the well-known “slip rule”, which has been a feature of the rules of civil procedure for many years. While this is not one of the rules of the CPR which has been explicitly incorporated into the rules of this court by rule 1.1(10) of the Court of Appeal Rules 2002, it is common ground between the parties that this court may, by virtue of its inherent jurisdiction to control its process, ‘correct a clerical error, or an error arising from an accidental slip or omission…in its judgment or order’ (per Harris JA, in Brown v Chambers [2011] JMCA Civ 16, para. [11]).

3 The 1 ^st , 2 ^nd and 3 ^rd respondents (“Commercial”) have offered no objection to this application. However, the 4 ^th respondent (“Mrs Messado”) has challenged the very assumption upon which it is based, contending that, on a true reading of the judgments and orders in question, there is in fact no error or inconsistency. The single issue that therefore arises on this application is which of the parties is correct on this question. At the heart of the matter is the order by this court that Mrs Messado, as damages for breach of a professional undertaking, should pay interest on the sum of $575,000.00, no order having been made for payment of the principal by her, or indeed, by anyone else.

4 But it is first necessary to say something of the history of the litigation, which is long and complicated. Beswick J (as she then was) conducted the trial of five consolidated actions, which lasted 27 days, spread over 20 months and her judgment was delivered on 4 December 2006. This was followed by a five day hearing in this court (Cooke, Harrison and Dukharan JJA), after which judgment was delivered on 1 October 2010. And finally (or so it appeared), after the hearing of a further appeal to the Privy Council, the judgment of the Board was given on 7 February 2013. For the purposes of this application, it is happily unnecessary to attempt more than an outline of this history, so as to give an understanding of the very narrow issue which now remains open for consideration. I have gratefully adapted this outline from the judgment of the Board, which was delivered by Lord Wilson.

5 By an agreement comprised in two related contracts entered into on 16 August 1999, American Jewellery contracted to sell property known as 3 Tropical Plaza, Constant Spring Road (“the property”) to Commercial. The total price was $20,000,000.00 and, as agreed, Commercial paid a deposit of $4,000,000.00. The property comprised of two retail shops, one of which was at the date of the agreement occupied by American Jewellery for the purposes of its business. Under the terms of the agreement, it was agreed that, upon completion of the sale, which was scheduled for 30 September 1999, this shop would be leased back to American Jewellery for a period of three years. American Jewellery and Commercial were represented in the transaction by Mr Raymond Clough and Mrs Messado respectively, both experienced conveyancing attorneys-at-law. Mr Clough had carriage of sale.

6 The transaction was beset by many problems. American Jewellery was unable to complete on the agreed completion date and, by agreements negotiated between Mr Clough and Mrs Messado on behalf of their respective clients, various strategies were adopted to move the sale along. These included Commercial advancing $6,397,313.00 on American Jewellery's behalf to discharge an existing mortgage on the property in December 1999 and making a further part payment on the purchase price of $4,000,000.00 early in 2000.

7 So it was that, by letter dated 15 March 2000, Mrs Messado came to give on American Jewellery's behalf the professional undertaking with which the current phase of the proceedings is concerned. This was an irrevocable undertaking to Mr Clough in respect of (as the Board put it at para. 11 of their judgment) ‘what then appeared to be the balance of the price, namely $6,120,898.00’. The condition of the undertaking was that this amount was to be paid ‘in exchange for duplicate Certificate of Title…duly endorsed in the name of [Commercial] duly free and clear of all encumbrances’.

8 On 16 June 2000, Commercial was duly registered as proprietor of the property, though it appears that there continued to be a dispute as to the terms of the lease-back of the shop which American Jewellery had continued to occupy. I cannot improve on Lord Wilson's summary (at paras 15–17) of how the matter (the conveyancing aspect of it, at any rate) was finally brought to a conclusion:

‘15. On 23 June 2000 Mrs Messado sent to Mr Clough a statement of the balance of the price allegedly payable to American Jewellery. The present appeal requires attention only to one entry on it, namely a proposed deduction from the price of $575k, inclusive of GCT, by way of rent allegedly payable by American Jewellery from 1 March to 30 June 2000 referable to the shop.

16. On 18 July 2000 Mrs Messado sent to Mr Clough a cheque for $2m on account of the balance payable but she expressed it to be in consideration of agreement by American Jewellery that it would suffer not only the deduction, already proposed, of $575k by way of rent from March to June 2000 but also a deduction of $862,500 in respect of the rent due for the six months from July to December 2000. The cheque was made payable to Mr Clough's firm; and he cashed it. Three days later Mrs Messado sent to Mr Clough a statement of the balance payable, revised so as to allow for the further payment and for the further deduction: the balance was $388,402.

17. Under cover of a letter dated 29 August 2000, Mrs Messado duly sent to Mr Clough a cheque for $388,402. She requested him to sign, and to return to her, a copy of the letter “in acknowledgment of receipt and in discharge of our client's obligations herein”. He did so.’

9 On 7 June 2001, American Jewellery filed action against Commercial and Mrs Messado was subsequently added as a defendant. As against Commercial, it was alleged that the purchase price had not been fully paid and a balance in the region of $1,656,825.57 was claimed (this amount included both the deductions of $575,000.00 and $862,500.00 which had been referred to by Mrs Messado in her letter to Mr Clough dated 18 July 2000). And, as against Mrs Messado, American Jewellery claimed ‘damages for breach of her professional undertaking given in respect of the sale of 3 Tropical Plaza’.

10 As regards the claim against Commercial, Beswick J's general conclusion was that, as the agent of American Jewellery, Mr Clough had had the authority to agree to the deductions stipulated by Mrs Messado and that he had done so by encashing the cheque sent on 18 July 2000 and by signing and returning to Mrs Messado a copy of her letter dated 29 August 2000 enclosing the cheque for $388,402.18 as payment of the balance of the purchase price. However, the learned judge considered that the deduction of $575,000.00 was improperly made. The basis of this view was that American Jewellery could not be liable to pay rent for the shop, which it continued to occupy, to Commercial during a period prior to the registration of Commercial's interest on 16 June 2000, when it (American Jewellery) was still the registered owner of the property. Commercial was therefore ordered to pay the $575,000.00 (see paragraph (2) of the judge's summary of her orders at para. 208 of her judgment).

11 As regards the claim for breach of undertaking, the learned judge found that Mrs Messado had breached her undertaking by not paying the agreed balance of the purchase money and costs within a reasonable time of the registration of her client's name on the title. Treating a reasonable time as seven days from 16 June 2000, the judge accordingly ordered that Mrs Messado should pay interest on the amount of $388,402.18 for the period 23 June 2000 to 29 August 2000 (when the balance was paid to Mr Clough), at a commercial rate to be determined either by agreement or by the Registrar of the Supreme Court (see paragraph (5) of the judge's summary of her orders at para. 208 of the judgment).

12 On appeal, this court upheld Beswick J's general conclusion as to Mr...