J.T.M. Construction and Equipment Ltd v Circle B Farms Ltd
| Jurisdiction | Jamaica |
| Judge | McDONALD-BISHOP, J |
| Judgment Date | 29 June 2009 |
| Judgment citation (vLex) | [2009] 6 JJC 2901 |
| Court | Supreme Court (Jamaica) |
| Date | 29 June 2009 |
CONTRACT FOR SALE OF LAND - Delay by purchaser - Vendor serving notice to complete - Notice making time of the essence - Validity of notice to complete - Whether service of notice to complete on purchaser's attorney-at-law valid - Effect of notice - Purchaser failing to complete within time - Rescission by vendor - Whether rescission valid - Whether purchaser entitled to specific performance - Whether vendor entitled to damages and recovery of possession - Forfeiture of deposit
CONTRACT FOR SALE OF LAND - Delay by purchaser - Vendor serving notice to complete - Notice making time of the essence - Validity of notice to complete - Whether service of notice to complete on purchaser's attorney-at-law valid - Effect of notice - Purchaser failing to complete within time - Rescission by vendor - Whether rescission valid - Whether purchaser entitled to specific performance - Whether vendor entitled to damages and recovery of possession - Forfeiture of deposit
THE PARTIES
J.T.M. Construction and Equipment Ltd, the claimant, is a limited liability company incorporated under the laws of Jamaica and carrying on business at Pollyground, Ewarton, St. Catherine. Mr. Ronald Prendergast is its CEO and its representative and sole witness for the purposes of these proceedings.
Circle B. Farms Ltd, the defendant, is also a limited liability company incorporated under the laws of Jamaica with registered offices at 2B Beechwood Avenue, Kingston 5 in the parish of St. Andrew. Representing its interest in these proceedings and acting as its sole witness is Mr. Lloyd S. Wiggan, one of its directors.
THE CLAIM
The claim is for specific performance of a contract for sale of land entered into on or about September 2, 2003. The claimant, acting through Mr. Ronald Prendergast, entered into this agreement with the defendant, acting through Mr. Wiggan and his wife as directors, for purchase of a plot of land situate at Belle Vue in St. Catherine and forming part of land comprised in certificate of title registered at volume 1112, Folio 251 of the Register Book of Titles. This agreement was reduced into writing and duly executed on September 2, 2003 and later stamped.
The claimant, by an amended fixed date claim form, filed January 22, 2008, has brought this claim against the defendant alleging breach of the said contract of sale. It seeks the following redress as summarized:
THE DEFENCE
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(1) A declaration that a valid and binding agreement exists between the claimant and the defendant in respect of the agreement for sale entered into on September 2, 2003.
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(2) Specific performance of that agreement.
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(3) Damages in lieu of specific performance and/or for breach of contract.
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(4) An injunction to restrain the defendant from selling the land.
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(5) An injunction restraining the defendant from entering or trespassing upon the land or in any way disturbing the claimant's possession of the land.
The defendant denies breach of contract contending that the agreement of sale was validly cancelled and that the claimant is not entitled to any of the relief it is claiming. The defendant, in turn, counter-claims against the claimant for damages for breach of contract and for recovery of possession of the land in question.
THE UNDISPUTED FACTS
There is not much dispute as to facts between the parties. The dealings between them are substantially evidenced by written documents that stand as being undisputed. The written agreement reveals, in part, the following terms that are immediately relevant to the issues in the case.
Chronology of events
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(I) The defendant agreed to sell and the claimant agreed to purchase the land in question for $4,500,000.00.
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(ii) A deposit of $2,250,000.00 was to be paid by the claimant on signing of the agreement. This broken down would be (a) $450,000.00 as deposit and (b) the sum of $1,800,000.00 as further payment on account.
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(iii) Completion was to be 180 days from the date of signing of the contract in exchange for the duplicate certificate of title duly transferred in the name of the claimant.
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(iv) Vacant possession was to be given to the claimant on payment of the deposit.
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(v) The agreement was subject to the claimant obtaining a mortgage and delivering to the defendant's attorney-at-law a letter of undertaking within 45 days of the signing of the agreement. If the claimant should fail to do so, the defendant would be entitled to rescind the contract within 14 days of the date of the breach.
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(vi) The claimant agreed that the defendant should have use of the amount of $1, 250,000.00 in consideration for granting to the claimant vacant possession rent free and interest free.
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(vii) The sale was subject to the defendant obtaining sub-division approval for the said lot.
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(viii) Mrs. Grace McKoy was appointed the defendant's attorney with carriage of sale while Mr. Sean Kinghorn would act as the claimant's attorney.
Pursuant to the agreement, the sum of $2,250,000.00, being deposit and a further payment, was duly paid by the claimant's attorney to the defendant's attorney. This is evidenced by a stamped receipt dated September 2, 2003. Following on this payment, the claimant was let into possession of the land in keeping with the terms of the agreement.
The defendant made an application to the St. Catherine Parish Council for sub-division approval in or around December 12, 2003. Preliminary approval was granted on October 4, 2004 but the sub-division plan was not delivered to the defendant until October, 2006.
On October 20, 2006, Mrs. McKoy wrote to Mr. Kinghorn requesting letter of undertaking for the balance purchase price in keeping with the terms of the agreement at special condition 5. This was accompanied by a statement of account. There was no response from Mr. Kinghorn to this correspondence.
In April, 2007, the final sub-division approval was obtained and the duplicate certificate of title was issued to the defendant. Subsequent to receiving this, Mrs. McKoy again wrote to Mr. Kinghorn on April 16, 2007, informing him that the sub-division approval had been obtained. A copy of the relevant duplicate certificate of title was sent to him with this correspondence. In that letter, it was expressly indicated that the defendant was in readiness to complete. Once again, Mrs. McKoy requested from Mr. Kinghorn the letter of undertaking that was requested in the letter of October 20, 2006 and which was not forthcoming.
The response to this correspondence by Mr. Kinghorn did not come until May 11, 2007. In that letter, Mr. Kinghorn gave his undertaking that the balance purchase price, as stated in the statement of account forwarded to him, being $2, 403, 995.00, would be paid on completion.
On May, 13, 2007, two days after receiving the letter of undertaking from Mr. Kinghorn, Mrs. McKoy sent instrument of transfer for execution by the claimant. Again, there was delay in the claimant responding and so on June 1, 2007, Mrs. McKoy, upon not receiving the executed instrument of transfer, wrote to Mr. Kinghorn requesting its return.
On August 2, 2007, Mr. Kinghorn replied by letter with the instrument of transfer enclosed. Mr. Kinghorn then explained that Mr. Prendergast was abroad and that due to inadvertence, the notary public's certificate was not affixed.
On August 10, 2007, Mrs. McKoy returned the transfer document and wrote back to Mr. Kinghorn indicating that the claimant's seal was also not affixed to the copy of the transfer and she requested that that be done. She also asked that the county clerk's certificate also be attached to the document. In this letter of August 10 th was also enclosed a notice to complete from Mrs. McKoy addressed to the claimant. According to the letter, the notice to complete was served in view of the claimant's "inordinate delay in completing" having been advised in April, 2007 that the duplicate certificate of title was issued and that since then, the defendant had not been placed in a position to complete the transaction.
By this notice to complete dated August 10, 2007, the claimant was required to pay over the balance agreed in the contract of sale and all cost and interest pursuant to Special condition 8 of the Agreement on or before the 10 th day of September, 2007. The claimant was thus given 30 days to complete. Also, time was made the essence of the contract by virtue of clause 3 of the notice to complete and it was stated that in making time of the essence, the defendant was ready, willing and able to complete.
Following on the issuance of the notice to complete, the defendant heard nothing from or on behalf of the claimant until October 22, 2007 (being a little over two months later) when Mr. Kinghorn wrote to Mrs. McKoy stating:
"Please find enclosed Instrument of Transfer in duplicate duly executed by the purchaser and bearing the company's seal."
Nothing was said in this letter about the balance purchase price that was requested to be paid in accordance with the notice to complete.
On the said date, by letter, Mrs. McKoy wrote to Mr. Kinghorn in the following terms:
"I refer to previous correspondence herein.
I have been instructed to advise you that pursuant to Notice to Complete dated 10 th August, 2007 the sale is now rescinded.
Please be guided accordingly."
It is this last piece of correspondence from the defendant's attorney that has led the way to these proceedings. The claimant is now contending that the cancellation is invalid and is seeking, among other things, a declaration that a valid contract subsists...
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