Faulknor (Aubrey) v Pearjohn Investments Ltd and Yvonne Claudius

JurisdictionJamaica
CourtSupreme Court
Judge F.A. SMITH, J.
Judgment Date15 Sep 2000
Judgment citation (vLex)[2000] 9 JJC 1501

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN COMMON LAW

SUIT NO. C.L.1994/F-097
BETWEEN
AUBREY FAULKNOR
PLAINTIFF
AND
PEARJOHN INVESTMENTS LTD.
1 st DEFENDANT
AND
YVONNE CLAUDIUS
2 nd DEFENDANT

REAL PROPERTY - Declaration - Whether transfer of title to first defendant null and void - Specific performance of agreement for sale sought - Damages for breach of contract

F.A. SMITH, J
1

The Plaintiff is and was at all material times in possession of premises at Norman Manley Boulevard in Negril in the parish of Westmoreland being the land registered at Volume 965 Folio 617 of the Register Book of Titles ("the said land").

2

The First Defendant is a company duly incorporated under the Laws of Jamaica with registered office at Negril and is the registered proprietor of the said land.

3

The Second Defendant is the predecessor in title to the First Defendant for the said land, having sold the land to one Mr. Llewellyn Johnson who nominated the First Defendant as transferee.

4

By Writ of Summons dated 13 July, 1994 the Plaintiff seeks a declaration that the transfer of title for the said land in the name of the First Defendant is null and void.

5

Specific performance of an agreement for the sale of the said land and damages for breach of contract in lieu of or in addition to specific performance were sought against the Second Defendant/Vendor. However, Mr. McBean for the Plaintiff told the court that the Second Defendant/Vendor was not served and that the Plaintiff intended to proceed against the First Defendant only.

6

The Plaintiff's Case in Outline

7

The Plaintiff, Mr. Aubrey Faulknor, gave evidence on his own behalf. He called as his supporting witness Mr. Israel Stewart, the husband of the Second Defendant/Vendor, Mrs. Yvonne Claudius-Stewart.

8

The Plaintiff is a businessman and operates a supermarket, bar and restaurant on the Norman Manley Boulevard, Negril, Westmoreland. By an agreement for sale in writing or evidenced in writing and made on the 3 February, 1987 the Plaintiff agreed to purchase from the Second Defend ant/Vendor the said land, which is approximately 0.7 km away from the Plaintiff's business place.

9

The purchase price agreed was $ 220,000.00. The Plaintiff stated that he signed a sale agreement at the offices of Milholland, Ashenheim & Stone, Attorneys-at-law. He further stated that he paid a deposit of $ 56,000.00 to Miss Janet Morgan, Attorney-at-law and associate with the above mentioned firm, who acted for both parties. The agreement was not stamped with the relevant stamp duty.

10

Over a period of time leading up to 1988 the Plaintiff paid to the Second Defendant/Vendor sums of money amounting to $ 135,000.00. These 'installments' were paid in cash and receipts were obtained.

11

After the initial deposit was paid, the Plaintiff was put into possession of the said land; he had the land 'dumped up' at his expense and subsequently built three chattel houses thereon. The Plaintiff did not, however, obtain a registered title for the said land.

12

In January, 1993 the Second Defendant/Vendor agreed to sell the said land to Mr. Llewellyn Johnson who had it transferred to his nominee, the First Defendant.

13

The First Defendant was registered as proprietor and obtained title for the said land.

14

The Plaintiff's contention is that the promoters/directors of the First Defendant, Messrs. Llewellyn Johnson and Mr. Washington Pearce, had knowledge

  • (a) of the Plaintiff's beneficial interest in the said land as purchaser;

  • (b) that the Plaintiff was in possession of the said land as purchaser, and

  • (c) that the Plaintiff had expended considerable sums of money on the land.

15

It is also the Plaintiff's contention that the promoters/directors of the First Defendant not only knew of the Plaintiff's interest in the said land but planned to deprive him of his interest therein by inducing the Second Defendant/Vendor to sell it to Mr. Llewellyn Johnson.

16

The Plaintiff is asking the court to find that these acts amount to fraud within the meaning of S. 71 of the Registration of Titles Act and accordingly declare that the transfer of title for the said land to the First Defendant is null and void.

17

Defence and Counterclaim of the First Defendant

18

Messrs. Llewellyn Johnson and Washington Pearce gave evidence on behalf of the First Defendant. They are the promoters/directors of the First Defendant.

19

According to Mr. Pearce, who operates a bike rental place on Norman Manley Boulevard, Negril, sometime in 1992 Mr. Israel Stewart came to his business place and told him that the adjoining property, the said land, was for sale. Mr. Stewart further told him that the registered owner of the property was Ms. Claudius and a meeting was arranged between Mr. Stewart, Ms. Claudius and Mr. Pearce at his business place. At that meeting Ms. Claudius confirmed that she intended to sell the property and informed Mr. Pearce that there was a tenant on the said land, Mr. Aubrey Faulknor, who was the owner of the movable board houses thereon.

20

On a subsequent occasion Ms. Claudius returned and discussed a purchase price of US$ 67,500.00 for the said land with Mr. Pearce.

21

Mr. Pearce was unable to meet the full asking price and persuaded Mr. Llewellyn Johnson to contribute the balance required for the purchase.

22

An agreement was reached and a date was set for the parties to meet in order to sign a sale agreement. Ms. Claudius informed them that her Attorney-at-law in the sale was Mr. Sinclair of Ripton McPherson & Company, while the Attorney-at-law for Messrs. Johnson and Pearce was Ms. Andrea Rattray.

23

Before the agreement was signed, however, Mr. Pearce left the Island in January 1993 with the understanding that Mr. Johnson would "take care of business".

24

Mr. Johnson tells the court that a sale agreement was in fact signed between himself and the Second Defendant/Vendor on the 18th of January 1993 for the purchase of the said land. Both parties were represented by their Attorneys.

25

Mr. Johnson avers that the Second Defendant/Vendor again told him that the Plaintiff was a tenant, in fact, the agreement for sale (Exhibit 5) contained a term whereby the Second Defendant/Vendor was required to serve a notice on the Plaintiff terminating his tenancy at will. This was done.

26

In its counterclaim the First Defendant states that it has been deprived of the use and enjoyment of the said land by the Plaintiff's wrongful occupation. The First Defendant further avers that the Plaintiff knew of the First Defendant's intention to use and develop the said land for tourist accommodations as of August 1, 1993, an intention which the First Defendant still seeks to realise.

27

Accordingly, the First Defendant claims:

  • (i) Possession of the said land;

  • (ii) Damages or mesne profits at the rate of US$ 25,000. per month from 1st. August, 1993 until possession is delivered up;

  • (iii) Interest on such damages or mesne profits pursuant to S.3 of the Law Reform ( Miscellaneous Provisions) Act.

28

The Issues of Law

29

Both counsel are agreed that the issues are as follows:

  • 1. Whether there is a valid and enforceable agreement between the Plaintiff and the Second Defendant/Vendor for the purchase of the said land.

  • 2. If so, whether there was fraud on the part of Mr. L. Johnson and Mr. W. Pearce, promoters/directors of the First Defendant, and

  • 3. If so, whether fraud on the part of Messrs. Johnson and Pearce may be relied upon to defeat the registered title in the name of the First Defendant, a company incorporated years after the alleged acts of fraud.

30

The First Issue - Is there a valid and enforceable sale agreement between the Plaintiff and the Second Defendant

31

Mr. McBean for the Plaintiff conceded that the Plaintiff cannot rely upon the unstamped written agreement since S. 36 of the Stamp Duty Act provides that:

"No instrument not duly stamped according to law shall be admitted in evidence as valid and effectual in any court proceedings for the enforcement thereof."

32

However, he contended that the Plaintiff may rely on the following to establish a valid and enforceable agreement:

  • 1. The doctrine of Part Performance

  • 2. The Statute of Frauds - S.4 - Note or Memorandum

33

Counsel for the Plaintiff referred to Fry on Specific Performance, 6th Edition (1921), p.278 and to Steadman v. Steadman (1974) 1 All E.R. 977 (H.L.). Based on these authorities he submitted that the following acts were sufficient to constitute part performance:

  • (a) Payment of money by the Plaintiff totaling $ 191,000. as evidenced by receipts exhibited;

  • (b) The entering into possession of the said land by the Plaintiff with the consent of the Second Defendant/Vendor; and

  • (c) The incurring of expenditure for improvement of the said land and the construction of three board houses thereon.

34

It is counsel's contention that these acts are unequivocal and referable to and provide proof of the oral contract alleged by the Plaintiff in respect of the sale of the said land to him.

35

Mr. Earle for the First Defendant argued that for part performance to apply five requirements must be met:

  • (i) The acts of part performance must be by the party seeking to enforce the contract;

  • (ii) The terms of the contract must be certain;

  • (iii) The agreement must be an oral one. Part performance cannot be adduced to supply what is omitted from a written agreement.

  • (iv) The acts of part performance must be unequivocal.

  • (v) There must be no other equally effectual remedy open to the Plaintiff such as compulsory purchase or damages.

36

He referred to Williams - Contract for Sale of Land and Title to Land - 4th Edition, P. 77. Counsel for the First Defendant submitted that based on the Plaintiff's evidence in...

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