New Falmouth Resorts Ltd v International Hotels Jamaica Ltd

• Jurisdiction: Jamaica
• Judge: PANTON P , MORRISON JA , PHILLIPS JA
• Judgment Date: 15 April 2011
• Neutral Citation: JM 2011 CA 33
• Judgment citation (vLex): [2011] 4 JJC 1503
• Date: 15 April 2011
• Court: Court of Appeal (Jamaica)
• Docket Number: SUPREME COURT CIVIL APPEAL NO. 32/2009

JAMAICA

IN THE COURT OF APPEAL

BEFORE:

THE HON. MR JUSTICE PANTON P

THE HON. MR JUSTICE MORRISON JA

THE HON. MISS JUSTICE PHILLIPS JA

SUPREME COURT CIVIL APPEAL NO. 32/2009

BETWEEN

NEW FALMOUTH RESORTS LIMITED

APPELLANT

AND

INTERNATIONAL HOTELS JAMAICA LIMITED

RESPONDENT

REAL PROPERTY - Order for possession - Deed of assignment - Validity - Laches and limitation

PANTON P

1 I have read in draft the reasons for judgment written by my learned brother, Morrison JA. I agree with his reasoning and conclusion and have nothing to add.

MORRISON JA

Introduction

2 The respondent (“IHJ”) is the owner and operator of the Starfish Hotel (formerly the Trelawny Beach Hotel) (“the hotel”) in the parish of Trelawny. This appeal concerns the ownership of a parcel of land consisting of 4¾ acres, known and described as lot 3A, which is registered at Volume 1066 Folio 929 of the Register Book of Titles in the name of the appellant (“NFR”) as proprietor. Lot 3A, which is adjacent to the hotel, has for several years been used as part of the hotel operations for the purposes of tennis courts, a riding stall, a playing field and a settlement pond for sewage treatment.

3 By an action commenced in the Supreme Court on 24 October 2002, NFR claimed against IHJ for an order for possession of lot 3A, contending in its further amended statement of claim filed on 5 July 2006 that IHJ's possession of the land has either been as a trespasser or in the alternative as a tenant at will. IHJ on the other hand contends that it has been in possession of lot 3A as purchaser in possession, pursuant to an agreement for sale dated 17 February 1982 (“the agreement”), between NFR as vendor and National Hotels and Properties Limited (“NHP”) as purchaser, in respect of which IHJ is the ultimate assignee. In an action tried before him over six days ending on 26 February 2006, on 20 February 2009 Hibbert J gave judgment dismissing NFR's claim, with costs to IHJ. In this appeal NFR challenges this decision, contending that the learned judge fell into error in a number of respects.

The background

4 In 1978, NHP purchased the hotel from Trelawny Resorts Limited. At the time of purchase and, it appears, for some time thereafter, it was thought that lot 3A, upon which the hotel's tennis courts were situated, formed part of the land that had been acquired by NHP. However, in 1982 (at a time when NHP was considering a sale of the hotel) it was discovered that lot 3A was not in fact part of the hotel property, but was owned by NFR. Contact was accordingly made with NFR and discussions ensued between NHP, represented by its managing director Mr Hugh Dyke, and Mr John Phelan 111 (“Mr Phelan”), who represented himself to be the managing director of NFR. Also involved in the discussions were an attorney-at-law representing NHP and Mr Vincent Chen, an attorney-at-law and partner in the firm of Clinton Hart & Co, representing NFR. In due course, Mr Chen prepared the agreement whereby NFR agreed to sell and NHP to purchase lot 3A for the sum of $184,000.00. The agreement was signed by Mr Phelan on behalf of NFR on 17 February 1982 and a cheque for $62,000.00, representing the deposit payable under the agreement, was on the same day paid into Mr Chen's firm on behalf of NHP.

5 With regard to possession, the agreement provided for vacant possession on completion and also stated that ‘The purchaser is the existing tenant under a tenancy agreement of part of the said land’. The completion date was to be on or before 31 March 1982, ‘in exchange for Duplicate Certificate of Title registered in the name of the Purchaser and the payment of the balance of purchase money and costs in full’. Time was not made of the essence of the agreement. Completion did not take place as scheduled and, in a letter dated 28 April 1982 (“the 28 April 1982 letter”), Mr Chen (who under the terms of the agreement had carriage of sale), wrote to NHP's attorneys in the following terms:

‘We have your letter of April 26, 1982. We have consulted with Mr. John Phelan the Managing Director and duly authorized agent of the Company who has authorized us to advise you that your client may take possession of the land purchased under the Agreement for Sale. In the circumstances, the Vendor will not claim interest on the balance of purchase money so long as completion takes place within a reasonable time after the Vendor has cleared title.

We trust that the foregoing will meet your client's approval.’

6 From a perusal Of the certificate of title for lot 3A, it is clear that Mr Chen's reference in this letter to the vendor needing time to clear title had to do with the fact that, as at the date of signing of the agreement, mortgage no. 294304 in favour of a company known as Chisholm & Company Limited was endorsed on NFR's title registered at Volume 1066 Folio 929, to secure the sum of $50,000.00 with interest. Title was not in fact cleared until 18 December 1998 when, in Supreme Court Suit Number E 47 of 1983, between NFR as plaintiff and Chisholm & Company Ltd and J Henry Chisholm as defendants, Edwards J granted the declaration sought by NFR that mortgage number 294304 was null and void. The court also declared that NFR was the legal and beneficial owner of lot 3A.

7 By a Deed of Assignment dated 30 December 1989, NHP assigned the agreement and all its estate, right, title, benefit, advantage, property, claim and demand whatsoever of NHP in or to the property comprised in the agreement to Linval Limited absolutely, subject nevertheless to the obligations on the part of [NHP] contained in the agreement. Two days later, on 22 December 1989, Linval Limited changed its name to International Hotels Limited and, by Deed of Assignment dated 22 May 2000, assigned all its estate, rights, title, benefit, advantage, property, claim and demand whatsoever in the agreement and in or to the property comprised in it to IHJ, subject again to the obligations of International Hotels Limited contained in the agreement.

8 By letter dated 30 August 2001, Messrs Hart Muirhead Fatta (“HMF”), acting as attorneys-at-law for IHJ, wrote to NFR to point out that, as a result of the judgment of Edwards J referred to in para. [6] above, NFR was ‘now in a position to fulfill its obligation under [the agreement]…’. The letter accordingly requested that NFR take immediate steps to bring the agreement to completion by the execution of a transfer of lot 3A in IHJ's favour and delivery to it of the Duplicate Certificate of Title, in exchange for payment of the balance purchase price (net of the deposit of $62,000.00) due to NFR under the agreement. In that letter, HMF also advised that ‘The benefits and liabilities under [the agreement] were duly assigned by NHP to Linval Limited which changed its name to International Hotels Limited…[a] the assets and liabilities of IHL were transferred to International Hotels (Jamaica) Limited (IJHJL)’. NFR responded swiftly, by letter dated 6 September 2001, over the signature of James H. Chisholm, who was described in the letter as ‘Chairman & Managing Director’ of the company. NFR asserted that neither NFR nor ‘its legally appointed Managing Director from January 1973’ was a party to ‘any purported agreement of sale’ to NHP, and also denied having received the sum of $62,000.00. NFR observed that ‘We now understand from you that, IHJL is responsible for the liabilities of NHP’, and the letter ended with request to IHJ to advise NFR ‘about PAST, DUE AND OWING RENTAL OF THE TENNIS COURTS on our property…’ (capital letters in the original). NFR followed this letter up with another dated 28 September 2001 to IHJ, in which it advised that IHJ was ‘squatting on our property’ and gave notice to IHJ to vacate the property on or before 27 October 2001.

9 As a result of the position taken by NFR in the correspondence described in the previous paragraph, on 12 December 2001 IHJ filed suit against NFR (suit number E 616 of 2001) claiming specific performance of the agreement. A statement of claim was filed in this action on 5 March 2002 and a defence, in which NFR challenged the authority of Mr Phelan to sign the agreement as well as the efficacy of the chain of assignments pursuant to which IHJ claimed to be entitled to maintain the action against NFR, was filed on 12 August 2002. The pleadings on both sides have since been amended (by IHJ, on 12 February 2007, to add a further claim to lot 3A under the Limitation of Actions Act and by NFR, on 18 March 2009, to add a further plea by way of defence that the letter of possession dated 28 April 1982 relied on by IHJ amounted to a variation of the original agreement between the parties which was unenforceable by IHJ for want of consideration and in any event did not have the effect of giving IHJ possession of lot 3A). It is not at all clear, and no reason was given to us, why this action has not been brought on for trial.

10 By notice to quit dated 13 August 2002, NFR again gave notice to IHJ to vacate lot 3A, citing as its reason for doing so the fact that the ‘said premises are required by [NFR] for his own use’ and, IHJ having remained in possession of lot 3A, NFR filed the action with which we are concerned in this appeal on 24 October 2002.

The pleadings

11 By its generally endorsed writ of summons filed under the rules of civil procedure then in force (the CPR would come into effect as of 1 January 2003), NFR's laconic claim against IHJ was ‘for possession of premises known as Lot 3A part of New Court Trelawny and registered at Volume 1066 Folio [sic] [929] and for damages for use and occupation for trespass to [NFR's] land’. In its original statement of claim filed on the same date as the writ, dated 5 July 2006, NFR asserted that IHJ had, since May 2000, been in wrongful possession of lot 3A ‘as trespasser/ and in the alternative as a tenant of the said land’ (para. [2]). Further that, without NFR's consent or...