Andrew Harbour v Palmyra Resorts & Spa Ltd and Another
| Jurisdiction | Jamaica |
| Judge | Daye, J |
| Judgment Date | 23 January 2012 |
| Neutral Citation | [2012] JMSC Civ 44 |
| Court | Supreme Court (Jamaica) |
| Docket Number | CLAIM NO. 2009 HCV 05095 CLAIM NO. 2009 HCV 03815 |
| Date | 23 January 2012 |
[2012] JMSC Civ. 44
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
CLAIM NO. 2009 HCV 05095
CLAIM NO. 2009 HCV 03815
and
and
AGREEMENT OF SALE — VENDOR — PURCHASER — BUILDER — IMPLIED TERM FOR COMPLETION OF SALE WITHIN REASONABLE TIME — BREACH OF FUNDAMENTAL TERM — REMEDY — RIGHT TO REFUND OF DEPOSIT — RESCISSION OR REPUDIATION OF CONTRACT OF SALE — INTERPRETATION OF EXCEPTION OF LIABILITY CLAUSE FOR DELAY IN COMPLETION — DISCHARGE OF OBLIGATION OF PARTIES TO SALE AGREEMENT DUE TO FRUSTRATION OF CONTRACT
Palmyra Resorts and Spa at Rose Hall, St. James was introduced to the tourist market in February 2005 by its developers as the first phase development of a luxury five star beach front condominium hotel.
This development was located on 16 acres of prime land adjacent to the Ritz Carlton Hotel, at Rose Hall, Montego Bay. It was opposite to the Rose Hall Great House, Rose Hall Golf Course, the Montego Bay Convention Centre and off the North Coast section of High Way 2000.
The development was planned to have one — two — and three bedrooms apartments in two condominiums, otherwise called strata towers — Sabal Palm and Silver Palm. Each of these towers were to be built at 12 storey high. The development was also projected to have eleven (11) villas, a club house, spa and fitness centre, two pools and two gourmet restaurants. Owners of apartments and their guest would have access to a private enclosed beach, the Rose Hall Golf Course and other amenities such as shopping in a gated complex.
The development was marketed in Travel and Hotel publications, on the internet and in newsletters posted on a website of the developers. The expected development phases and timetable for their completion were described in a Property Report which was sent to prospective purchasers of units, in the U.S.A. Both towers were scheduled to be completed in the first phase of the development.
The 1 st Claimant, Mr. Andrew Harbour of Georgia, U.S.A. who was a Certified Financial Planner received a copy of the Property Report dated December 2005 from the developers in early 2006. This was after he contacted them on seeing an internet travel publication about the development. He believed it would be a good investment to purchase an apartment in this development. He deponed that the time for completion of this development was important to him. He further deponed that the Property Report he received had a detailed timetable for the completion of the construction of the apartments in the towers, infrastructure and specific facilities and amenities which was set for December 2007 (see paragraph 5 of Affidavit dated 24 th September 2009). Based on these assurances he signed a Construction Agreement which stipulated that the construction of the apartment he intended to purchase would be completed by the 4 th Quarter of 2007. All the time schedules were estimated date of completion set by the developers.
In fact Mr. Andrew Harbour signed two Agreements for the purchase of an apartment in this development or subdivision. The first is Strata Lot Agreement for Sale dated May 2006 with vendors Palmyra Resorts and Spa Ltd. for the purchase of strata lot Number A58 Unit 506 on the 5 level of the Sabal Palm Towers. He paid a deposit of $US 15,345.07, the equivalent of thirty (30) per cent of the purchase price of US $46,500.00.
Then he signed a second Agreement for the construction of the condominium unit, dated the same May 2006 with builders, Palmyra Properties Ltd., an affiliate company of Palmyra Resorts and Spa Ltd., the first defendant. Under this Agreement he paid what represented a deposit of US $194,550.00. This sum was thirty (30) per cent of the purchase price of US $684,500.00. Thus, the total deposit he paid under both Agreements was US $209,855.00.
Another prospective purchaser Mr. Viido Einer a businessman of Estonia who was visiting Jamaica in February 2008 saw the Palmyra Resorts and Spa development advertised. He was alerted by a representation that the Resort was set to be completed and opened for Autumn 2008. He obtained a brochure fromthe sales office in Jamaica. He was impressed with the description of the development and the reviews international industry players gave it.
As a result Mr. Viido Einer paid an earnest deposit of US $5,000.00 on behalf of his company Strata Invest OU. Then on the 13 th June 2008 he signed two Agreements for the purchase of one of the apartment units in Palmyra Resort and Spa. The developers sent these Agreements to him in Estonia by post when he returned home. The Agreements are as follows: Strata Lot Agreement for Sale by Vendor Palmyra Resorts and Spa Ltd. of Strata Lot A93 Number 808 on the 8 level of Sabal Palm Towers for US $1,400,000.00. He paid a deposit of US $7,798.00 under this Agreement. The second Agreement was for the construction of the apartment. This was Agreement for Construction of Condominium unit made with the 2 nd Defendant, Palmyra Properties Ltd. The estimated time for completion under this Agreement was the 3 rd Quarter of 2008. He paid a deposit of US $199,335.00. The total payment under these Agreements was US $217,123.00.
Both these claimants each demanded the full refund of their respective deposits from the 1 st and 2 nd Defendant. They base their claim on the ground that the respective Agreements with the defendant companies were terminated because each defendant failed to complete the building of the units within the stipulated time of completion. In other words, they contend the companies committed serious breaches of their Agreements with them which went to the root of their obligation. Therefore they contend the Agreements came to an end and they were not under any further obligation to fulfill any term and were entitled to the refund of their deposits. They also contended they were discharged of any further obligation under the Agreement because they were frustrated and consequently they were also entitled to a refund of their deposits.
The 1 st and 2 nd Defendant companies refused to refund any of the deposits made by these Purchasers. They deny they committed any breach or breaches of any of the Agreements. They accept there were delays meeting the projected completion dates but such delays did not amount to any breach and or breaches that terminate the Agreements. They assert the Agreements were still on foot and subsisted. They rely on the fact that Certificates of Practical Completion were issued for the apartments on 15 th January 2010. Further they say the Architects Certificate of Delay dated December 3, 2009 under the Agreement protected them from any liability.
The issues which arise from these claims are as follows:-
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(a) Did the Developer/Vendor and/or contracted builder breach any of their Agreements with these Purchasers?
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(b) In the absence of a specific date for the Vendor/Builder to complete the Agreements for Sale should there be an implied term that the Vendor/Builder will complete the Agreements for Sale within a reasonable time?
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(c) If there is an implied term that the Agreement for Sale to each Purchaser should be completed in a reasonable time of signing, did the Developer/Vendor and/or Builder breach this term?
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(d) If this implied term was breached was this a fundamental breach?
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(e) Were the Purchasers entitled at law to terminate the Agreements for Sale and claim the refund of their deposits?
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(f) Were the Developers/Vendor and/or Builder protected by any term in the Agreements for the delay or failure to complete the Agreements for Sale within a reasonable time?
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(g) In the alternative were the Agreements for Sale terminated or frustrated due to the impossibility of the Developers/Vendor and/or Builder to perform their obligation to complete the Agreements for Sale.
Mr. Michael Hylton Q.C. submitted in his written Submissions on behalf of each claimant Andrew Harbour and Strata Invest OU as follows:-
‘… there is only one issue in this case, and that is whether it was a term of the Agreements that the Apartments would be completed by the 4 th Quarter 2007 or within a reasonable time thereafter? If this was a term of the Agreements (an important term), … the claimant must succeed.’
On the other hand, Counsel Mrs. Nicole Foster-Pusey submitted on behalf of the defendants in her written submission that:-
‘2 the central issue for determination…
(a) Whether the Defendants have breached the Agreements and further if yes, whether the breach or breaches entitled the Claimant to treat the contract as having been discharged; alternatively ,
(b) whether the Agreements have been terminated by reason of the operation of the doctrine of frustration .
‘3 the claimants is not entitled to succeed on either of the bases being pursued.’
The respective submissions of counsel for the parties cumulatively identified the issues as well as those formulated by the court.
The Agreements for Sale between the parties are commercial contracts made between business persons. The claimants were business men who entered the Agreements for Sale to purchase the apartment Units because they considered them to be good investment. The Developers/Vendor are companies engaged in the business of developing brand name, luxury international properties in the hotel and resorts industry.
InGoblin Hill Hotel Ltd. v John Thompson SCCA 57/2007, delivered December 19, 2008 Morrison, J.A. at p. 21 adopted the modern approach on the interpretation of documents enunciated by Lord Hoffman in the...
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...29th edition Volume 1, paragraph 13–003).” 51 Daye J in Andrew Harbour v Palmyra Resorts & Spa Limited and Palmyra Properties Ltd [2012] JMSC Civ. 44 accepted at paragraph 21 that “…the modern law or test for implication of terms in a contract was formulated in the ex tem pare judgment of B......