Leon Courtney Robinson v Michelle Chen and Others

• Jurisdiction: Jamaica
• Judge: D. Fraser J
• Judgment Date: 19 December 2014
• Neutral Citation: [2014] JMSC Civ 206
• Docket Number: CLAIM NO. 2009HCV03801
• Court: Supreme Court (Jamaica)
• Date: 19 December 2014

[2014] JMSC Civ 206

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

CLAIM NO. 2009HCV03801

Between

Leon Courtney Robinson (Executor of the Estate of Herman L. Denton, Deceased)

Claimant

and

Michelle Chen

1st Defendant

and

Thelma Agatha Chen

2nd Defendant

and

Errol Alphanso Chen

3rd Defendant

DAMAGES - Specific Performance - Damages to be awarded in lieu of - Method by which damages should be computed

D. Fraser J

INTRODUCTION

1 On October 3, 2014 I handed down a written judgment in this claim. In that judgmentLeon Robinson (Exec. of estate Herman Denton dec'd) v. Michelle Chen et al No 1 [2014] JMSC Civ 146 the facts were fully outlined. The judgment records the following orders:

2 On the claim:

• a. It is declared that the Agreement between the defendants and Herman L. Denton (deceased) has been frustrated and cancelled by the order forSpecific Performance granted to Dennis Wright and Lisa Rose Wright in Claim No. 2004HCV02341 on July 20, 2006.

• b. The claimant is not entitled to forfeit the deposit paid by the defendants.

• c. The defendants owe rental to the claimant representative of the estate of Herman Denton from November 1997 at the rate at $20,000.00 monthly until they deliver up possession of the property, less the sum of $3,400,000 paid to Herman L. Denton.

• d. The defendants shall quit and deliver up possession of the said property to the claimant within 14 days of the payment of any sum due and owing to them, in the event that a sum of money is owed by the estate of Herman Denton to the defendants after the sum owed for rental is set off against the damages due to the defendants from the estate of Herman Denton. This order is subject to the eventual award made for damages and will be varied if necessary.

• e. The defendants shall withdraw the caveat lodged against the property within 7 days of delivering up possession to the claimant.

• f. Costs to the claimant to be agreed or taxed

3 On the Counterclaim:

• a. The defendants are awarded damages for breach of the 1997 Agreement for Sale they entered into with Herman L. Denton.

• b. The claim for a declaration that the rental in the sum of $1,440,000.00 collected from the Wrights by Herman Lloyd Denton be applied to the purchase price as agreed by the parties is refused.

• c. The claimant is not entitled to forfeit the deposit herein or any portion of the monies paid under the contract.

• d. Costs to the defendants to be agreed or taxed.

The court will hear further submissions on October 10, 2014 on the quantum of damages to be awarded, and on any interest to be awarded on sums due.

4 In light of the court's order further written submissions were in due course received from the parties, though later than the date contemplated, due to a series of extenuating circumstances. This judgment deals with the issues of damages and interest reserved from the first judgment.

THE SUBMISSIONS ON DAMAGES AND INTEREST

Counsel for the Claimant

5 Counsel for the claimant submitted the law is clear that in the circumstances of this case the normal measure of damages should apply which would be the difference between the market value at the contractual time for completion less the contract price. Further that the price at which the property was resold was, unless rebutted, evidence of the market price. Counsel relied on McGregor on Damages by Harvey McGregor, Seventeenth Edition, at paragraph 22–005.

6 Counsel submitted that the property was sold to the Wrights for a lesser price than that at which the property was being sold to the defendants. She relied on a copy of the Agreement between Rev. Denton and the Wrights. That Agreement was however never admitted into evidence even though it is appended to a Notice of Intention to Adduce Hearsay Evidence contained in Documents filed February 24, 2012. Though the intention to adduce the evidence was filed as a part of a judge's bundle in this matter, it was never put forward during the hearing as an agreed bundle and the copy Agreement was never admitted into evidence. The stated intention to adduce it as evidence was never acted upon and hence the court cannot now properly have regard to that copy Agreement. The position of the claimant is however not unduly prejudiced by the courts inability to have regard to that Agreement. This is so because, as stated at paragraph 22–005 of McGregor on Damages , ‘…apart from being evidence of the market price, the price at which the claimant has contracted to sell the land to a third party is irrelevant; accordingly it was held in Brading v. McNeill [1946] Ch. 1451 that such a resale price, lower than the market price could not decrease the damages below the normal measure. ’

7 Counsel submitted that the relevant date for ascertaining the market value of the property was in November 1998 as the contract should have been completed in one year and it was determined that the defendants came into possession in November 1997. Counsel therefore maintained that the defendants' evidence of the value of the property as at later dates was therefore of no assistance on the issue of damages to be awarded.

8 Counsel also advanced that damages in lieu of specific performance being damages to be assessed on an equitable basis, the conduct of the party to whom damages was being awarded must be considered by the court. In that regard the court was invited to take the following into account:

• a. the defendants would have already earned a benefit from occupation of the premises at a fixed rental of $20,000 per month for seventeen (17) years. This was sufficient benefit to them in these circumstances where they were themselves in continuous breach during the life of the Agreement;

• b. while the defendants had been in default all throughout the Agreement, in contrast the vendor was in breach only having failed to stamp the Agreement, and through entering another agreement with the Wrights as late as February 2002. Counsel submitted that the vendor's default was relatively minor compared to that of the defendants which went to the root of the contract, and therefore the circumstances did not give rise to any equity in favour of the defendants.

• c. even at the time when the defendants submitted the Commitment Letter from the building society, the amount of the commitment was insufficient to clear the amount outstanding under the Agreement. A shortfall of $500,000 remained which the defendants have at no time said they were ready to pay;

• d. similarly to the case ofJohnson v. Agnew [1980] AC 367 [1980] AC 367, the Estate of Herman Denton has in fact suffered a loss on the sale to the Wrights. An inference can be drawn from the fact that the vendor has sold the property for a lower price that he was just frustrated with the lack of performance by the defendants. Rather than any “mala fides” as the defendants state in their submissions, it is evidence of desperation resulting from the defendants continued breaches. This submission is included subject to the finding of the court that the evidence of the value of the sale of the property to the Wrights is not properly before the court

• e. the issue of the value for which the property has been sold in this instance must be considered by the court in its equitable jurisdiction as this is the only property which forms the Estate of Herman L. Denton, Deceased. Therefore there is no more money to be used to settle any damages awarded to the defendants. As the court is aware, the action is only to complete that transaction and comply with the orders for specific performance granted to the Wrights. The equitable maxim of the court not acting in vain is relevant and should be considered in the award to be made.

• f. as the defendants were admittedly at fault all throughout the Agreement, and did not at any time lead evidence that they were in a position to complete the agreement, they were not entitled to substantial damages.

• g. further the defendants having failed to lead evidence as to what was the market value at the time of completion, the only evidence that the court can have regard to is that the new agreement was entered into for a lesser price. Therefore only nominal damages could be awarded to the defendants in this case.

9 Concerning the rental to be paid, the court having found that the defendants have paid in total the sum of $3,400,000, counsel submitted that to calculate the rental now due from the defendants the sum of $3,400,000 should be subtracted from the total sum due for rent from November 1997 to November 2014 and continuing until the defendants vacate the premises.

Submissions on behalf of the Defendants

10 The challenges suffered by the defendants concerning legal representation in respect of the property, the subject of this dispute, which were outlined in some detail inLeon Robinson (Exec. of estate Herman Denton dec'd) v. Michelle Chen et al No 1 continue. Mrs. Yualandé Christopher-Walker who appeared for the defendants in respect of the submissions to determine whether the case should be re-opened to add the Wrights, no longer appears in respect of this last phase to determine the applicable damages. The defendants however forwarded submissions under the hand of the 1 ^st defendant, which appear to have benefitted from some legal counsel.

11 These submissions disagree fundamentally with the approach suggested in the submissions of counsel for the claimant. The defendants contend that the proper measure of damages in this case ought to be such as may fairly and reasonably be considered as either arising naturally; or such as would be in the contemplation of the parties.Hadley v Baxendale (1854) 9 Ex 341 (1854) 9 Ex 341. Further that damages being compensatory in nature, the innocent party should be placed so far as money can do so, in the same position as if the contract had been performed. Therefore while damages are...