Nation Hardware Ltd v Norduth Development Company Ltd and another

• Jurisdiction: Jamaica
• Judge: SYKES J
• Judgment Date: 03 October 2005
• Judgment citation (vLex): [2005] 10 JJC 0301
• Date: 03 October 2005
• Court: Supreme Court (Jamaica)

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN COMMON LAW

BETWEEN

NATION HARDWARE LTD

CLAIMANT

AND

NORDUTH DEVELOPMENT COMPANY LTD

FIRST DEFENDANT

AND

ADRIAN NORTON

SECOND DEFENDANT

IN CHAMBERS

Mr. Harold Brady instructed by Brady and Company for the claimant

Mr. Crafton Miller and Mrs. Patricia Roberts-Brown instructed by Mr. Michael Palmer of Palmer, Smart and Company for the defendants

CONTRACT FOR SALE OF LAND - INJUNCTIONS. See also FREEZING ORDERS

Interim -

SYKES J

1 1. The defendants have robustly resisted the application for the extension of the interim injunction and their submission can be summed up in this expression, more commonly used by philosophers than lawyers, ex nihilo nihil fit, nothing comes from nothing. The defendants say that there is no contract between the claimant and the defendants with the consequence that there is no right or interest existing in law that demands protection by an injunction. On the other hand, the claimant says that there is a contract between it and the defendants. It relies on the doctrine of part performance evidenced by a receipt dated, May 6, 2005. It also says that there is a sufficient memorandum in writing signed by the party to be charged as required by the Statute of Frauds.

2 2. This is an inter partes hearing to determine whether an ex parte interim injunction I granted on August 16, 2005 should be continued until trial. The injunction I granted on August 16 enjoined the defendants until reconsideration of the injunction from taking steps whether by their directors, servants and/or agents or howsoever otherwise from transferring or permitting the transfer of lands registered at Volume 1049 Folio 417 of the Register Book of Titles or parting with posse>>>ssion of the aforesaid property by way of lease, rent or otherwise.

3 3. The dispute between the parties is accentuated because Mr. Hubert Williams and family, by virtue of an executed agreement for sale dated July 5, 2005, have entered into possession of the property. Mr. Williams has paid a deposit of $5,400,000. He has been in possession from at least early July, a full month before the injunction was granted. This was unknown to me at the time the injunction was granted. Had Mr. Williams' occupation been known at the time of the ex parte injunction it is quite likely that I either would not have granted it or granted it in the same terms (see Campbell J.A. in Esso Standard Oil S.A. Ltd v Lloyd Chan (1988) 25 J.L.R. 110, 112G).

The claimant's case

4 4. Mr. Ian Hayles describes himself as a director of Nation Hardware Limited (Nation), the claimant in this matter. Nation by a claim form dated August 10, 2005, is asking for

• a. A declaration that there is a valid agreement between the claimant and the defendants entered into for the sale of lands registered at Volume 1049 Folio 417 known as Duthieson in the parish of Westmoreland;

• b. Specific performance of the said agreement between the claimant and the defendants evidenced by a receipt issued by the second defendant dated May 6, 2005, in respect of the sale and purchase of lands registered at Volume 1049 Folio 417 and known as Duthieson in the parish of Westmoreland;

• c. An injunction restraining the defendants from transferring the property or granting possession by lease, rent or otherwise;

• d. Damages;

• e. Such further or other relief as may be just.

5 5. Mr. Hayles swore an affidavit dated August 10, 2005 on behalf of Nation. I shall use this affidavit as the basis of stating the basis of the claim. The claimant is a limited liability company incorporated in Jamaica with registered offices at 14 Bell Road, Kingston 13 in the parish of St. Andrew. Norduth Development Company (Norduth), the first defendant, is the registered proprietor of lands registered at Volume 1049 Folio 417 of the Register Book of Titles. Mr. Adrian Norton, the second defendant, is a director of Norduth. Nation alleges that after negotiations commenced in April 2005 all the parties agreed that the land would be sold for $36,000,000. On May 2, 2005, Nation states that it, through Mr. Hayles, paid $200,000 to the defendants who issued a receipt. It is being said that Nation would acquire the land, it being the sole asset of the company, by purchasing all the shares of Norduth instead of a transfer of land to the claimant.

6 6. Arising from this alleged agreement, Nation says that the firm of Palmer, Smart and Company, attorneys for the defendants drafted a sale of shares agreement and sent it to Nation's then attorneys, Messieurs Grant, Stewart, Phillips and Company who were appointed to act for Nation in this transaction. In keeping with this request, Mr. Palmer, the senior partner in Palmer, Smart sent a draft document for the sale of Norduth's shares to Grant, Stewart, Phillips and Company. This draft was accompanied by a letter dated May 31, 2005, stating that Palmer, Smart act for Norduth. The letter says

We have been requested by Mr. Ian Hayles a director of Nation Hardware Limited to forward the enclosed Share Sale Agreement for your perusal and comments.

7 7. In the sequence of events this letter was sent after the May 6, 2005, receipt was signed by Mr. Norton. Mr. Hayles said that after May 6, 2005, he carried out a search of the companies' register. What he saw caused him to doubt whether Norduth's shares could be transferred. According to Mr. Hayles, Mr. Norton told him that he (Norton) needed the consent of a number of beneficiaries before the documents could be executed.

8 8. Mr. Hayles says that in June 2005 he heard that Mr. Norton was holding discussions with Mr. Herbert Williams with a view to selling him the land. He says that he called Mr. Norton on June 27 who did not deny that he was having discussions with Mr. Williams. Mr. Hayles met Mr. Norton on June 28. On this date, Mr. Norton told Mr. Hayles that the beneficiaries' consent had been obtained. Mr. Hayles then said that he would be prepared to complete the sale. Mr. Brady of Brady and Company presented a $6,000,000 cheque and two agreements to the defendants. These agreements were an agreement for the sale of land and an agreement for the sale of chattels. The cheque was returned on June 30. Also on June 28 Mr. Hayles told Mr. Norton that the reason he did not sign the agreement was due to encumbrances on the company revealed by the search of the companies' registry. Mr. Hayles further states that at the time of the presentation of the cheque and agreement Mr. Norton was told that Nation would be prepared to accept a direct transfer of the title to the property having regard to the state of the records of Norduth as revealed by the searches carried out at the Registrar of Companies. In Mr. Hayles' own words when the cheque and two draft sale agreements were presented to Mr. Norton he (Norton) said that he would have to discuss the matter with his attorneys. Nation says that the reason why it failed to sign the agreement for the purchase of shares was that Mr. Norton did not tell Mr. Hayles that the beneficiaries' consent had been obtained.

9 9. On July 5, 2005, the claimant's attorney wrote to the defendants' attorneys indicating its willingness to complete the sale and requested the relevant documentation. The claimant states that at all material times it was ready, willing and able to complete the purchase of the property for the agreed price of $36,000,000 within sixty days as agreed.

10 10. The affidavit adds that Mr. Norton told Mr. Hayles that Mr. Williams was offering him $42,000,000 and he (Norton) would be proceeding with the sale to Mr. Williams, whereupon Mr. Norton was reminded by Mr. Hayles that they had a binding agreement for the sale of land for $36,000,000 which was evidenced by the receipt (Hayles receipt) acknowledging payment of $200,000.

11 11. There is evidence that show that Allison Pitter and Company, chartered surveyors, sent a letter dated March 11, 2005, to Palmer, Smart requesting them to prepare a sale agreement between the defendants and the Williams family. That letter contained all the essential information to enable the preparation of a proper contract. There was certainty of subject matter, certainty of parties, certainty of purchase price, the amount of the deposit and the completion date.

12 12. It appears that a copy of the letter was sent to Messieurs DunnCox, a firm of attorneys, because there is a letter from DunnCox to Palmer, Smart, dated March 29, 2005, which refers to the Allison Pitter letter and then goes on to say that they confirm that Mrs. Grace Norton, widow of Mr. Harry Norton and an Executrix of his Estate, is agreeable to the proposed sale and the terms set out in the Allison Pitter letter.

13 13. Palmer, Smart responded to the DunnCox letter by asking that Mrs. Grace Norton and the other executor of the estate of Mr. Harry Norton sign, jointly, a memorandum to the effect that [they] agree to the proposed sale on the terms out in [the Allison Pitter letter]. This letter was dated April 6, 2005.

14 14. July 5, 2005, was a watershed day. Many things happened. I shall say what they were but this is not to say that they occurred in the sequence I have listed them. First, Mr. Brady wrote, in a letter dated July 5, 2005, to Palmer, Smart telling them that Nation and the defendants had entered into a contract for the sale of land and further that Nation had paid $200,000. Nation now wished to complete the sale. There is no mention of shares in the letter. This July 5 letter was preceded by a letter from Brady and Company dated June 29 alleging that Mr. Hayles was one of a number of beneficiaries under the will of Mr. Harry Norton. Second, there is a letter dated July 5, 2005, written by Palmer, Smart addressed to whom it may concern indicating that Hubert Williams and family had...