Dojap Investments Ltd v Workers Trust & Merchant Bank Ltd

• Jurisdiction: Jamaica
• Judge: Rowe, P.,Downer, J.A.
• Judgment Date: 11 February 1991
• Neutral Citation: JM 1991 CA 3
• Docket Number: Supreme Court Civil Appeal No. 22 of 1990
• Court: Court of Appeal (Jamaica)
• Date: 11 February 1991

Court of Appeal

Rowe, P., Forte, J.A.; Downer, J.A.

Supreme Court Civil Appeal No. 22 of 1990

Dojap Investments Limited

and

Workers Trust & Merchant Bank Limited

Appearances:

Richard Mahfood Q.C. & Miss Jacqueline Hall instructed by Clough, Long & Co. for Appellant

R.N.A. Henriques Q.C. & David Batts instructed by Livingston, Alexander & Levy for Respondents

Real property - Contract for the sale and purchase of land — Clause in agreement stipulated payment of 25% deposit and remainder plus half the cost of transfer to be paid within 14 days from date of sale — Deposit paid — Further 24 hours granted to comply with stipulation — Payment not made — Contract rescinded and deposit forfeited — Offer of payment of balance of purchase money plus cost and interest rejected — Stipulation that time is of essence of contract — Whether granting of 24 hours meant time no longer of essence — Whether it amounted to a postponement of completion of contract — Whether the 25% of deposit was a true deposit or was in the nature of a penalty — Whether forfeiture would unjustly enrich the vendor.

Rowe, P.

1 Premises known as, 57–59 Half-Way-Tree road and 19 Carlton Crescent, St. Andrew comprised of six parcels of land, each under the Registration of Titles Act were put up for sale by public auction by the respondent, on October 5 ^th, 1989. Raymond Clough, attorney-at-law attended at the auction and bid in his own name the sum, of $11,500,00.00 for these parcels which bid having exceeded the reserve price of $11,200,000.00 was accepted. Clough later nominated the appellant as the party into whose name the properties should be transferred.

2 In compliance with clause 4 of the Conditions of Sale, on October 5 ^th, 1989; Clough paid the sum of $2,875,000.00 being 25% of the purchase price, as a deposit, and agreed to pay the remainder of the purchase price and half the costs of transfer within fourteen days from the date of the sale. By letter dated October 23 ^rd, 1989 the respondent rescinded the agreement for sale and forfeited the deposit, on the basis that the appellant had neither paid the balance of the purchase price nor provided an unconditional acceptable banker's undertakings in lieu, by October 20 ^th, 1989. An offer of a manage's cheque from Jamaica Citizens Bank the sum of $9,012,579.82 representing the balance of the purchase money, costs, and interest at 12% from October 20 ^th–26th on October 26 ^th, to complete the purchase was rejected by the respondent on October 27 ^th and the cheque was returned. Litigation followed.

3 Dispute centered around the interpretation of clauses 4, 5, 6, 7, 8, 13, 15 of the Conditions of Sale. These I set out below:

• “…………………………

  4. Immediately after the sale the purchaser shall pay to the Auctioneer at his Auction Rooms a deposit of twenty-five percent of the amount of the purchase money of the property and sign the agreement endorsed hereon for the completion of the purchase according to these conditions. The purchaser shall pay the remainder of the purchase money together with the amount payable by the purchaser under paragraph 6 hereof within fourteen (14) days from the date of the sale to the vendor's attorney-at-law Shirley-Ann Eaton of No. 153155 East Street, Kingston. Immediately upon such payment the vendor pursuant to the provisions of section 106 of the Registration of Titles Act will execute a transfer to the purchaser and lodge same for registration.

• 5. If from any cause whatsoever other than the wilful default of the vendor the purchase shall not be complete an or before the expiration of thirty (30) days from the date of the auction the purchaser shall pay interest at the rate of Twelve Dollars per centum per annum on the unpaid amount of the purchase money from the time hereby fixed for the payment of the same until the same shall be actually paid. This condition is without prejudice to any tight or remedy reserved to the vendor by any other of these conditions.

• 6. The property is under the operation of the Registration of Titles Act and the title is as disclosed by the certificate of title issued in respect hereof. The vendor is a selling as the and a draft transfer which shall be prepared by the vendor's attorney-at-law shall be submitted to the purchaser or his attorney(s)-at-law for perusal and approval and the costs of the same shall be in accordance with the scale of charge of the Jamaica Bar Association and such costs together with stamp duty and registration fee shall be borne by the vendor and the purchaser equally.

• 7. All requisitions and objections of (if any) in respect of the title, description of the property or particulars or otherwise arising out of the sale and nor precluded by these conditions shall be delivered in writing to the vendor' s attorney-at-law within seven days from the delivery of the draft transfer for perusal and approval. If no objections or requisitions be made within the period aforesaid the title and the terms and form of the draft transfer shall be deemed to have been accepted and approved.

• 8. If the purchaser shall make any objection requisition respecting the title to the property which the vendor or its attorney-at-law shall on the ground of expense or otherwise be unable of unwilling to answer satisfy or comply with the contract for sale of the property may be rescinded by the vendor (notwithstanding any attempt to remove, or satisfy the same negotiation in respect thereof) unless the purchaser withdraws such objections or requisition within seven days after the delivery of a letter from the vendor's attorney(s)-at-law declining to answer such objection or requisition.

  ………………………….

• “13. If the purchaser shall fail to observe or comply with any of the foregoing stipulation on his part his deposit shall be forfeited to the vendor who shall be at liberty (without tendering any transfer) to resell the property either by public auction or private contract at such time and in such manner and subject to such conditions as the vendor may think fit and any deficiency in price which may result on and all charges costs and expenses attending a re-sale or attempted re-sale, together or rendered useless by such default, shall be made good and paid by the defaulting purchaser at the present sale and be recoverable from him by the vendor as liquidated damages. Any increase of price in a re-sale shall belong to the vendor.

  ………………..

• 15. Whenever under these conditions an act should be performed, or a payment made as or with in a stated period time shall be of essence of the contract.”

4 In his statement of claim the appellant, alleged that the respondent was in breach of its duty to act promptly in carrying out its obligations under the agreement and that it failed to submit the draft transfer and accurate statement of costs within a reasonable time so as to enable the appellant to fulfil his own obligations under clause 4. Consequently the appellant alleged that its own acts between October 13 ^th and 26 ^th were a sufficient performance of the contract and the purported forfeiture was contrary to clause 5 of the conditions of sale. Alternatively it alleged that by charging interest the respondent acted in breach of the conditions of sale. Paragraph 11 of the statement of claim was in these terms:

“Further or in the alternative, the plaintiff avers that the defendant by its conduce failed to carry out its obligations promptly and/or waived the application of conditions 13 and/or 15 to condition 4.

Particulars

• (a) ………………………………..

• (b) the defendant extended the date for payment of the remainder of the purchase monies, and/or

• (c) The defendant acknowledged the existence of the contracts of sales or the 19 ^th day of October 1989 and/or

• (d) The defendant had evidenced a clear intention of proceeding pursuant to condition 5.”

5 The final alternative claim way an averment that in the circumstances the forfeiture was harsh and unconscionable and what the appellant should be relieved therefrom.

6 Specific performance and a return of the amount paid for interest were two of the remedies sought, together with an injunction to prevent the respondent from dealing with the properties in any way pending the properties of the action further remedy sought was that:

• “………………………………

  (5) If the court finds that the plaintiff has been in breach of the said particulars and conditions of sales, relief from the alleged forfeiture on such terms as the court deems fit.”

7 Apart form denials, the defence, as pleaded, said in paragraph 13 that the agreement expressly provided for the payment of a deposit of 25% of the purchase price and the remainder thereof within fourteen days thereafter and that by clause 15 time was of the essence of the contract for any act that should be performed or payment made within a stated period. The defence went on to say that banker's undertakings presented by the appellant was so informed and that correspondence from the respondent clearly stated that it was not waiving any of its rights under the conditions of sale when it extended certain courtesies to the appellant.

8 Zacca C.J. identified eight questions which arose for his determination and disposed of them in this way:

• 1. The appellant could not complain of delay on the part of the respondent in forwarding the draft transfer and accurate statement of accounts because –

  • (b) the appellant contributed to the delay by making proposals to the respondent contrary to his obligations under the contract;

  • (c) that the appellant contributed to the delay by making proposals to the respondent contrary to his obligations under the contract;

  • (d) the appellant was able to provide an undertaking within the critical period of fourteen days, albeit an unacceptable one.

9 The learned chief justice referred to the judgment of Sir Nicholas Browne Wilkinson V.C. in Crane and Another v Debono...