Orville Palmer v Lorinda Palmer v Gregory Duncan

 
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[2019] JMSC Civ 77

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

Jackson-Haisley, J.

CLAIM NO. 2014 HCV 01318

Between:
Orville Palmer
1 st Claimant
Lorinda Palmer
2 nd Claimant
and
Gregory Duncan
Defendant
IN COURT

Mr. Craig Carter instructed by A McBean & Company for the Claimants

Mr. Makene Brown instructed by Chen, Green & Co. for the Defendant

Damages — Assessment — Breach of Contract for Sale of Land — Destruction of Property — Loss of Use — Expert Evidence — Loss of Bargain

Jackson-Haisley, J
1

The claim began by way of Claim Form and Particulars of Claim dated 14 th of March 2014 wherein the Claimants Orville Palmer and Lorinda Palmer claimed against the Defendant Gregory Duncan damages for breach of contract and for destruction of property or in the alternative Specific Performance. The Defendant filed a Defence on the 20 th April 2014 but on the 20 th January 2015 the Defence was struck out and judgment was entered for the Claimants. What remains to be decided is the quantum of damages.

BACKGROUND
2

The Claimants and Defendant entered into an Agreement for Sale on July 31, 2013, for the sale of property located at No. 9A Block B Sandhurst, 5 Sandhurst Place, Kingston 6 in the parish of Saint Andrew, being land comprised in the Certificate of Title registered at Volume 436 Folio 55 of Register Book of Titles. The agreed consideration was Twenty-Three Million and Six Hundred Thousand Dollars ($23,600,000.00). The Defendant made a deposit on the subject property of Two Million Two Hundred and Forty-Two Thousand Dollars ($2,242,000.00) but failed to pay the balance of the purchase price.

3

A part of the arrangement was that the Defendant would settle the Claimants' mortgage with Jamaica National Building Society. In addition, there was also a collateral contract referred to in the Agreement for Sale. This collateral contract provided that the Defendant would give them a Unit in a Development. The parties executed an Agreement for Sale for the unit with a consideration of Twenty Million Dollars ($20,000,000.00) for stamp duty purposes, as this was the value of the completed unit. Both agreements were to be read in conjunction with each other. The Defendant also failed to complete the development and so did not transfer any Unit to the Claimants.

4

The Claimants assert that they have been deprived of the use and occupation of their property since August 2013, when they gave the Defendant permission to use the property to store building supplies. However, the Defendant demolished the premises by causing significant damage to various sections of the property and surrounding areas, by removing the fence, all the doors, windows, the roof and other fixtures causing damage to the walls of the building.

5

The Claimants pleaded under the head of special damages;

Interest at the rate of six percent (6%) on Special Damages from August 2013 to the date of judgment pursuant to the Law Reform ( Miscellaneous Provisions) Act.

(i) Damages for breach of contract & destruction of property

26,000,000.00

(ii) Loss of use of premises from August 2013 to present time @ $250,000.00 per month and continuing

1,500,000.00

TOTAL

27,500,000.00

6

The Claimant identified and attached certain documents to their Particulars of Claim and notified the Defendant that they intended to tender the said documents into evidence. These documents were:

  • i) Agreement for Sale dated the 13 th of July 2013;

  • ii) Duplicate Certificate of Title registered at Volume 436 Folio 55 of the Register Book of Titles; and

  • iii) Report and Valuation on No.5 Sandhurst Place dated 12 th of June 2012.

EVIDENCE AT TRIAL
7

At the Assessment of Damages hearing, counsel for the Defendant sought an adjournment on the basis that they intended to challenge the Judgment. The adjournment was denied and the matter proceeded. The Defendant participated in the proceedings and was represented by counsel who actively participated. The 1 st Claimant Mr. Orville Palmer's witness statement was accepted as his evidencein-chief. He gave further evidence that the Defendant was in the process of building a development on the neighbouring premises which adjoined his property and that the Defendant offered to purchase his property to extend his development and they entered into a contract for the sale of the property. The Claimant adduced into evidence several documents that supported his claim to include the Agreement for Sale, Lease Agreements and Rent Receipts and a Valuation report dated June 2012 prepared by Allison Pitter and Co., Chartered (Valuation) Surveyors. This report ascribed an open market value of $26,000,000.00—$28,000,000.00 to the property.

8

In cross-examination, Mr Palmer indicated that he had a vague recollection of the Collateral Agreement. The Collateral Agreement was also referred to in the Special Conditions of the Agreement for Sale and tendered into evidence. During crossexamination Mr. Palmer admitted that there was no mention of rental cost in his pleadings. Counsel for the Defendant argued that this should have been included as it was easily quantifiable by means of arithmetic and ought to have been pleaded as special damages. He submitted that it was an unfair surprise and consequently a disadvantage to his client. The Claimant also relied on the expert report of Mr. Brian Pottinger, structural engineer whose engineer's report prepared on or about March 3, 2018 also became an exhibit in the case.

SUBMISSIONS ON BEHALF OF THE CLAIMANTS
9

Counsel for the Claimants submitted that damages for the breach of contract should be awarded based on the loss of bargain which would be the contractual price of the agreement to purchase the Claimants' home which is $23,600,000.00 plus the cost of the town-house which is $20,000,000.00 minus the market value of the Claimants' property which averages out at $27,000,000.00. Therefore, the loss of bargain would be the sum of $16,600,000.00.

10

He further submitted that the Claimants should also be awarded consequential losses which is the continued mortgage payments which amounted to $13,461,424.20 along with the balance payable to settle the mortgage in the amount of $22,457,119.72. This is because the Claimants would not have been liable to make these mortgage payments had the contract been completed, since the contract was for them to receive a townhouse at the value of $20,000,000.00 free from any obligations or mortgages, in addition to the cash of $23,600,000.00. Moreover, the Defendant has agreed to pay their mortgage based on the Agreement for Sale. In addition, they should be awarded a sum reflective of the rental incurred by the Claimant up to December 2018 in the amount of $7,229,947.52 because if the contract had been performed the Claimants would not have been required to pay rent.

11

He also claimed $17,125,000.00 being the cost to demolish, remove rubble and replace the structure of the Claimants' property as a result of the demolition by the Defendant, this he says is the diminution in value effected to the property by the Defendant and he cited Laird v Pim (1841) 7 M.& W. 474 as his authority.

12

He concluded that his clients were entitled to $76,873,491.44 as a result of the Defendant's failure to complete the agreement.

SUBMISSIONS ON BEHALF OF THE DEFENDANT
13

Counsel for the Defendant cited the case of Vera Dallas (by her attorney Elmeda Robinson) v L.P. Martin Company Limited (trading as L.P. Martin Funeral Home) [2018] JMSC Civ 78 in which Jackson-Haisley J dealt with the issue of a contested Assessment of Damages on a Default Judgment, at paragraph 45:

“From the cases considered certain principles can be deduced. Firstly, in order to determine the true effect of the default judgment the pleadings must be closely scrutinized. An examination of the pleadings will aid in determining what the default judgment is taken to have decided. Secondly, the question as to whether or not all questions with respect to liability have been determined will be dependent on the pleaded cause/s of action. Thirdly, there is a distinction between causation on the liability issue and causation on the quantum issue. The fact of the default judgment means that issues in relation to causation with respect to liability have already been determined however causation issues with respect to quantum remain open. These principles seem to apply not only to default judgments but also to summary judgments and judgments on admission.”

14

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