Couttes Ltd v Barclays Bank Plc

• Jurisdiction: Jamaica
• Judge: G.G. JAMES, J.
• Judgment Date: 07 October 2002
• Judgment citation (vLex): [2002] 10 JJC 0701
• Date: 07 October 2002
• Court: Supreme Court (Jamaica)

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN EQUITY

BBETWEEN

COUTTES LIMITED

APPLICANT

AND

BARCLAYS BANK plc.

RESPONDENT

Dennis Morrison Q.C., for Applicant.

Michael Hylton Q.C., for Respondent

CONTRACT - Option agreement - Declaration sought that agreement frustrated - Whether there was a failure of consideration - Financial Institutions (Amendment) Act 1997

G.G. JAMES, J

1 By an amended Originating Summons dated November 8, 1999 the applicant sought the Declarations following, namely, that an Option Agreement ("the Agreement") dated October 11, 1995 made between the Applicant and the Respondent has been frustrated and that the applicant is consequently entitled to a refund of the sum of U.S.$150,000.00 paid to the Respondent pursuant to that Agreement.

2 The facts are not in dispute.

3 The Applicant and the Respondent signed an Option agreement dated October 11, 1995 by which the Applicant acquired an option to purchase all the shares of Saffery Limited ("Saffery"), a company which owned the shares in Barclays Finance Corporation of Jamaica Limited (Barfincorp).

4 Barfincorp then held a licence under the Financial Institutions Act 1992 ("the Act").

5 The option was exercisable within 45 days of the signing of the agreement and for this the Applicant paid the Respondent U.S.$3,000.00. The option was exercisable at a price of U.S.$147,000.00.

6 A term of the said option agreement was that within the period, after the said agreement was signed and before the option was exercised, the Applicant was required to apply to the Minister for approval of the purchase agreement, in accordance with Section 21(1) of the Act.

7 That section reads:

21(1) "Where any person enters into any arrangement in relation to any licensee by virtue of which, if the arrangement is carried out, obtain control of the licensee, the arrangement shall be subject to the approval of the Minister."

8 Consequently on November 3, 1995 the Applicant made its application under the Act to the Minister of Finance for approval of the said arrangement. By letter dated November 13, 1995 the Minister acknowledged receipt of the application, advising therein that he was considering the matter.

9 On November 27, 1995, three (3) days after the expiry of the "twenty-one days" stipulated for the minister to give his approval, the applicant exercised its option to acquire the shares in Saffery and paid to the Respondent the sum of U.S.$147,000.00, the balance of the option price.

10 Section 21(2) of the Act provides as follows:

21(2) "Where an application is made to the Minister for approval of an arrangement referred to in subsection (1), the Minister shall, subject to subsection (3) give his decision within twenty-one days of the receipt by him of the application, so, however that —

• (a) the Minister shall not give approval unless he is satisfied that —

  • (i) the applicant is a fit and proper person as described in subsection (3) of section 4; and

  • (ii) the interests of the licensee's depositors would not be prejudiced if the applicant obtained control of that licensee.

• (b) the Minister may give approval subject to such terms and conditions as he considers necessary in the public interest but where the Minister refuses to give approval he shall notify the applicant and shall give him an opportunity to make written representations;

• (c) if the Minister fails to respond within the twenty-one days as aforesaid he shall be deemed to have waived the requirement for approval."

11 Dennis Morgan in his affidavit dated November 8, 1999 on behalf of the Applicant, at paragraph 9 said:

"9. The period of 21 days as of the date on which the application was made to the Minister expired on the 24th November, 1995. Accordingly, acting under the terms of the Option Agreement and pursuant to Section 21 of the Act, twenty-one days having elapsed since the application was delivered to the office of the Minister of Finance and Planning, the Applicant proceeded to exercise the option........ and paid Myers, Fletcher and Gordon U.S.$147,000 on the 1 ^st December, 1995................................."

12 The applicant was clearly acting in reliance on the deeming provisions of Section 21(2)(c) of the Act.

13 The parties had expressly agreed in the Option Agreement at paragraph 11:

"It shall be a condition to the exercise of the option that the Minister shall have approved or shall be deemed to have approved the application...