Caricom Investments Ltd v National Commercial Bank Jamaica Ltd

• Jurisdiction: Jamaica
• Judge: Laing J
• Judgment Date: 07 October 2022
• Court: Supreme Court (Jamaica)
• Docket Number: CLAIM NO. SU2019 CD00231 (formerly C.L. 2005HCV1884)

[2022] JMCC COMM. 3

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

COMMERCIAL DIVISION

CLAIM NO. SU2019 CD00231 (formerly C.L. 2005HCV1884)

Between

Caricom Investments Limited

Claimant

and

Caricom Hotels Limited

2 ^nd Claimant

and

Caricom Properties Limited

3 ^rd Claimant

and

National Commercial Bank Jamaica Limited

1 ^st Defendant

and

RIO. Blanco Development Limited

(in Receivership)

2 ^nd Defendant

and

Estate of Karl Aird (deceased) (Receiver of Rio Blanco Development Limited)

3 ^rd Defendant

Mr Ransford Braham QC, Mrs. Caroline Hay QC, Ms Melissa McLeod and Mrs Tereese Campbell instructed by Braham Legal, Attorneys-at-Law for the Claimants,

Mr Charles E Piper QC, Ms Carlene Larmond QC and Mr D'Angelo Foster instructed by Charles E Piper & Associates, Attorneys-at-Law for the Defendants

Misrepresentation-Whether there were false assertions by the receiver and/or the mortgagee appointing him that, inter alia, the duplicate certificates of titles for lots were lost or misplaced

Agency — Whether the receiver is the agent of mortgagee

Credibility — Assessment — absence of contemporaneous documents — effect

Breach of Contract — Whether breach of contract in, inter alia, not providing duplicate certificates of title

Damages — Quantum — Whether negotiating damages appropriate — Basis of award of damages where Court finds that damages were not proved but the claimant did not receive what was contracted for

IN OPEN COURT

Laing J

Contents

Topic	Paragraphs
Background	1 – 10
The Preliminary Issues	11 – 35
The Claim	36 – 42
The Defence	43 – 50
Mr Lake's evidence of the involvement of NCB in the sale of the Lots	51 – 53
Mr Lake's evidence on the chronology of events	54 – 59
The Special conditions 3, 4, 5 and 15	60
Completion	61 – 64
What did Mr Aird know about the duplicate certificates of titles for the Disputed Lots?	65 – 69
What did NCB know about the duplicate certificates of titles for the Disputed Lots?	70 – 73
The Law on Misrepresentation
Fraudulent Misrepresentation	74 – 76
Negligent Misrepresentation	77 – 79
Was there a representation that the duplicate certificates of title for the Disputed Lots were lost or misplaced?
The Court's analysis of the evidence of misrepresentation	80 – 95
The importance of the Disputed Lots	96
The lost title approach	97 – 112
The evidence of partial non-disclosure	113 – 116
Was there a representation that there were no incumbrances?	117–123
Is the restrictive covenant an incumbrance?	124–130
Was there a representation that the Receiver had the right to sell the Disputed Lots?	131 – 137
Was there a representation in the Agreement for sale as to “Hotel Property” and or a representation in the advertisement that the Rio Blanco properties were suitable for resort development?
(a) The agreement for Sale – Hotel Property	138 – 139
(b) The Advertisement	140 – 146
Was the receiver the agent of NCB?
Mr Braham's submissions on agency	147 – 151
The Court's analysis of the issue of whether Mr Aird is the agent of NCB	152 – 162
The Court's conclusion that Mr Aird was the agent of NCB	163
Against whom is relief for misrepresentation available?	164–165
The possibility of liability of NCB for misrepresentation	166
Was NCB Rio Blanco's agent for the purposes of conducting negotiations or concluding the Agreement for Sale or contract?	167
Was NCB Rio Blanco's agent for the purpose of passing on the misrepresentation to Caricom Investments?	168–169
The possibility of liability of Mr Aird and Rio Blanco for misrepresentation	170 – 171
The inducement	172
Did the claimants suffer any losses as a result of the false representations?	173
The Reason for the losses – Mr Lakes complaints about the titles.	174 – 185
Inability to develop	186
Timeshares	187 – 192
Caveat on Volume 1229 Folio 161	193
The Court's analysis and conclusion on the evidence as to whether there is proof of any losses by reason of the false representations	194 – 203
The Court's conclusion on whether the Claimants received good title	204 – 219
Breach of Contract	220
Whether the Defendants, jointly or severally, breached the Agreement for Sale by failing to deliver duplicate Certificates of Title for the Disputed Lots.
Whether the Defendants breached an implied warranty that the Claimants would receive good and marketable titles for all the properties.	221 – 224
Breach of Special Condition 15	225 – 230
Impossibility of Performance	231 – 237
Was there a waiver by Mr Donovan Jackson?	238
The evidence of Mr Donovan Jackson	239 – 252
The Court's conclusion on Mr Jackson's evidence	253 – 256
Whether the Defendants jointly or severally, breached special conditions 4, 5, 12 and 15 of the Agreement for Sale.
Special conditions 4 and 5	257 – 260
Breach of special conditions 12	261 – 263
The court's conclusion as to whether there has been a breach of contract	264
Mitigation	265 – 268
Damages—	269 – 281
The quantum of compensation on the basis of Ruxley	282–291
Costs	292–299
Summary of main findings	300
Disposition	301

The Background

1 The Claimants are companies duly registered in Jamaica. Mr Richard Lake is a shareholder and director of the Claimants.

2 The 1 ^st Defendant, National Commercial Bank Jamaica Limited, (referred to herein as “NCB” or “the Bank”) is a commercial bank operating in the island of Jamaica. It was at all material times the holder of a debenture over the assets of Rio Blanco Development Company Limited dated 7 ^th August 1989 (“the Debenture”) and was the mortgagee in respect of certain properties registered in the name of that company.

3 Pursuant to the Debenture, NCB appointed one of its employees, Mr Karl Aird (“Mr Aird”) as Receiver/ Manager of Rio Blanco Development Company Limited (“Rio Blanco”). Mr Aird is deceased and his estate is the 3 ^rd Defendant. Accordingly, wherever there are references to the conduct of the 3 ^rd Defendant, these are to be understood to be references to the acts and actions of Mr Aird. Mr Aird's witness statement and his oral evidence including his cross examination have been admitted as his evidence for purposes of this trial.

4 On or about the 3 ^rd May 1993, Mr Aird acting as the Receiver of Rio Blanco executed two agreements with the 1 ^st Claimant, Caricom Investments Limited (“Caricom Investments”). These were:

• 1. An Agreement for Sale of Land dated the 3 ^rd May 1993 (“the Agreement for Sale”); and

• 2. An Agreement for the Sale of Chattels and Property.

5 Caricom Investments took delivery of the chattels and was put into early possession of the lands which were comprised in the Agreement for Sale (“the Lots”). Prior to entering into the Agreement for Sale, Mr Aird had been advised by Messrs Robinson, Philips & Whitehorne, Attorneys-at-Law then acting for Rio Blanco that some of the Lots were not part of the security given to NCB. The lots which are the subject of this case are the following:

• (i) Lot 41 registered at Volume 1230 Folio 801 of the Register Book of titles (“Lot 41”);

• (ii) Lot 1 registered at Volume 1220 Folio 921 of the Register Book of Titles (“Lot 1”);

• (iii) Lot 51 registered at Volume 1230 Folio 811 of the Register Book of Titles (“Lot 51”); and

• (iv) Lot 52 registered at Volume 1230 Folio 812 of the Register Book of Titles (“Lot 52”).

(These four lots will together be referred to herein as “the Disputed Lots”).

6 The essence of this claim is that the purchaser Caricom Investments did not get the duplicate Certificates of Title for the Disputed Lots as it had contracted for pursuant to the Agreement for Sale. The Claimants have accordingly claimed specific performance of the Agreements for sale and damages for breach of contract.

7 It is not of significance save for the purpose of avoiding confusion, but it should be noted that the Agreement for Sale provided for the Disputed Lots to be transferred to the nominee of the vendor Caricom Investments Limited and as a consequence Caricom Hotels Limited was endorsed as transferee on the Original Certificates of Title held by the Registrar of Titles (“The Registrar”).

8 At the heart of this case is the distinction between the Original Certificate of Title and a duplicate Certificate of Title. It is helpful to appreciate the difference between the two from the outset. The Original Certificate of Title is the Certificate of Title held by the Registrar. The Registrar creates a duplicate of the Original Certificate of Title and this duplicate Certificate of Title is what is kept by the owner of the relevant property. In the event of a sale of the property, in the usual course, the duplicate Certificate of Title is surrendered to the Registrar who will note the transfer on the Original Certificate of Title and on the duplicate Certificate of Title. The new owner will be provided with the Duplicate Certificate bearing his name as transferee and proprietor of the relevant interest which he acquired. There is also the authority of the Registrar to dispense with the notation of a transaction on the duplicate Certificate of Title and this power is relevant and will be explored as this judgment develops.

9 Subsequent to the execution to the Agreement for Sale, Rio Blanco filed Claim number CLR021/1994 Rio Blanco Development Company Limited v National Commercial Bank (Jamaica) Limited and Karl Aird. By a judgment delivered on 25 ^th January 2006, the Honourable Mr Justice James found that the Disputed Lots did not form a part of the security given to NCB (“the James J Rio Blanco Judgment”). The Claimants subsequently filed the claim herein.

10 There was a trial of the claim (“the First Trial”) which...