Brian Morgan v Kirk Holgate
| Jurisdiction | Jamaica |
| Judge | Brooks P,Foster-Pusey JA,G Fraser JA |
| Judgment Date | 04 February 2022 |
| Neutral Citation | JM 2022 CA 15 |
| Docket Number | SUPREME COURT CIVIL APPEAL NO COA2021CV00057 |
| Court | Court of Appeal (Jamaica) |
[2022] JMCA Civ 5
IN THE COURT OF APPEAL
THE HON Mr Justice Brooks P
THE HON Mrs Justice Foster-Pusey JA
THE HON Mrs Justice G Fraser JA (AG)
SUPREME COURT CIVIL APPEAL NO COA2021CV00057
(Executor of the Estate of Rose I Barrett)
Neco Pagon and Ms Samoi Campbell instructed by Peter Champagnie QC for the appellant
Mrs Tamara Francis Riley-Dunn instructed by Nelson-Brown Guy and Francis for the respondent
The dispute between Dr Brian Morgan (the executor of the estate of Rose Barrett) and Mr Kirk Holgate concerns an option to purchase contained in a lease agreement that they made in 2018. Dr Morgan leased premises to Mr Holgate for three years. The lease was to have expired on 28 February 2021 (a Sunday), and the litigation centres on whether or not Mr Holgate satisfied the conditions of the option.
Mr Holgate contends that he properly exercised the option, but that Dr Morgan improperly sought to renege on the agreement. He sued Dr Morgan for specific performance of the agreement, and a judge of the Supreme Court granted his application for an injunction to prevent Dr Morgan from selling or treating with the premises, or removing Mr Holgate from them until the trial of the claim.
Dr Morgan has appealed from the learned judge's decision. He contends that the learned judge has, among other things, misconstrued the clause in the agreement which granted the option to purchase (‘the option clause’).
According to Dr Morgan, the option clause imposed a condition that time would be of the essence, in terms of Mr Holgate's completion of the purchase, but Mr Holgate did not meet that deadline and therefore the option had lapsed. Moreover, Dr Morgan argues that, in addition to the purchase price, there were cash fees, transfer costs and other sums (‘associated costs’) that Mr Holgate should have paid, prior to the expiration of the lease, but did not. Mr Holgate's failure to pay these sums within the duration of the lease, Dr Morgan asserts, also indicates Mr Holgate's failure to exercise the option.
Mr Holgate contends that he complied with the terms of the option clause. He argues that, but for late and incorrect banking information having been provided by Dr Morgan's attorneys-at-law, the payment of the purchase price would have been made before the expiry of the lease. He further asserts that the payment having been made on 1 March 2021, the learned judge was correct in finding that there was a triable issue. Accordingly, he argues, an injunction was the correct order in the circumstances.
The resolution of the dispute will largely turn on the construction of the option clause.
The lease agreement is dated 1 March 2018. The option clause, which will be quoted later in this judgment, required Mr Holgate to exercise the option before the expiry of the lease.
Mr Holgate entered into possession of the premises after the execution of the lease agreement. On 20 January 2021, his, then attorney-at-law, wrote to Dr Morgan's, then attorney-at-law, indicating his wish to exercise the option to purchase and requested “the draft agreement for Sale so that the terms can be finalised for signing”. The letter further indicated that Mr Holgate required “120 days for completion”.
On 1 February 2021, Dr Morgan's attorney-at-law sent a draft agreement for sale by email to Mr Holgate's attorney-at-law. The draft agreement emphasised the option clause in two respects. Firstly, the provision for completion referred to it, thus:
“COMPLETION: As per Instrument of Lease made on the 1 st day of March, 2018 in particular Clause 4 e of same and subject to Clause 2 of Special Conditions herein.
The Vendor shall not be obliged to register the name of the Purchaser on the duplicate Certificate of Title unless and until the full sale price and cash fees and costs of Transfer and such other amounts payable by the Purchaser hereunder have been paid, or the Purchaser have delivered to the Vendors' Attorney-at-Law an acceptable undertaking for payment of the same.”
Secondly, special condition 2 of the draft agreement repeated the option clause. The special condition stated:
“It is understood and agreed that ‘Time is of the Essence’ of this Agreement and in keeping with Clause 4 (e) of Lease Agreement made on the 1 st day of March 2018 and which expires on the 28 th day of February 2021 – ‘[repeats the option clause]’.”
Despite protestations by Mr Holgate's attorney-at-law, the clauses were not withdrawn. On Thursday, 25 February 2021, after correspondence with a financial institution (‘the bank’), Mr Holgate's attorney-at-law wrote to Dr Morgan's attorney-at-law, by email, stating that the financing had been approved and that she expected to “have the cheque in hand tomorrow and will forward same…along with the signed Agreement for Sale…”.
On the same date, the bank wrote to Dr Morgan's attorney-at-law indicating the approval of loan financing and that the loan proceeds “will be disbursed once clients [sic] signs the documents and all closing conditions have been met”. That indication proved unsatisfactory to Dr Morgan's attorney-at-law, who informed Mr Holgate's attorney-at-law, that it was “totally unacceptable as this is just an indirect way of trying to extend the contract to the benefit of [Mr Holgate] when the Agreement expires on the 28 th February 2021”.
The bank altered its position, and by letter dated 26 February 2021 undertook to “disburse the loan proceeds on or before Wednesday March 3, 2021”. Both Mr Holgate's attorney-at-law and the bank requested Dr Morgan's attorney-at-law's bank account details in order to facilitate the transfer of the purchase price by the Real Time Gross Settlement protocol (‘RTGS’). Mr Holgate's attorney-at-law's email requesting the information is time-stamped 1:01 pm on Friday, 26 February 2021. Mr Holgate's attorney-at-law also sent off, that day, to Dr Morgan's attorney-at-law, a letter containing two copies of the agreement for sale document, duly signed by Mr Holgate.
Dr Morgan's attorney-at-law provided the information by email that is time-stamped 4:22 pm that day. In that email, his attorney-at-law also indicated that Mr Holgate knows that she does not work on Wednesdays and Fridays. The day ended and 28 February 2021 passed without any further communication between the parties.
On 1 March 2021, the bank transmitted the purchase price to the account for which Dr Morgan's attorney-at-law had provided the information. It informed Dr Morgan's attorney-at-law of the transaction, by email that is time-stamped 2:18 pm on that day. The attorney-at-law responded by email at 7:59 pm and indicated that “the funds will have to be returned as transaction [sic] cannot be completed”. Later that evening, the attorney-at-law sent another email to the bank indicating that the funds had not been credited to her account. She said she made further checks and found that she had provided an incorrect account number. She concluded her email by asking the bank to “make arrangements to reverse the transaction to replace the funds from whence it [sic] came”.
Dr Morgan's attorney-at-law then wrote a letter, dated 1 March 2021, to Mr Holgate's attorney-at-law, recounting her exchange of correspondence with the bank, and indicated that Dr Morgan was not prepared to enter into an agreement to sell the property to Mr Holgate. She informed Mr Holgate's attorney-at-law that time was of the essence of the contract and that the option to purchase expired on 28 February 2021.
Despite the indication that the payment was rejected, the bank later sent the funds to Dr Morgan's attorney-at-law's account. On 8 March 2021, Mr Holgate filed his application for an injunction. Dr Morgan's attorney-at-law returned the sum representing the purchase money to Mr Holgate's attorney-at-law on 9 March 2021.
The learned judge did not give written reasons for her decision. The parties have, nonetheless, agreed that she orally indicated that although Mr Holgate had no real prospect of success in his claim against Dr Morgan, there was, however, a serious issue to be tried “on the question of whether the RTGS was perhaps provided with the correct information and on a timely basis then the payments could have been made” (paragraph 2 A of the notice of appeal). The learned judge also commented that the “RTGS information was sent after 4:00 pm on a Friday when the bank could have closed” (paragraph 2 B of the notice of appeal). She found that these were issues for a trial judge to resolve.
The learned judge's orders in respect of the injunction are:
“1. [Dr Morgan] and/or his servants or agents is/are restrained from selling or disposing [the premises] until the trial of the matter.
2. [Dr Morgan] and/or his servants and/or his agents is/are restrained from ejecting [Mr Holgate] from the Premises until the trial of the matter.
3. The Registrar of Titles is restrained from registering any transfer in the Register Book of Titles relating to this [sic] Premises until the trial of the matter is concluded.”
The learned judge, at order 12, as a consequence of granting the injunction, also required Mr Holgate to give the usual undertaking as to damages. Apart from granting the injunction, the learned judge made a number of case management orders.
Dr Morgan filed numerous grounds of appeal, several of which repeated the same issue a number of times. The grounds are set out below:
“A. The exercise of discretion to grant the application for injunctive relief was inconsistent and palpably wrong in light of the learned judge's acceptance of the authorities that an option to purchase must be strictly complied with and her finding that ‘ on the face of it, [Mr Holgate] does not...
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