Rose and Hanchard v Chung and Patrick Ltd
| Jurisdiction | Jamaica |
| Judge | Allen, J. |
| Judgment Date | 06 June 1978 |
| Court | Supreme Court (Jamaica) |
| Docket Number | E. 109 of 1969 |
| Date | 06 June 1978 |
Supreme Court
Allen, J.
E. 109 of 1969
Mr. K. C. Burke with Dr. A. Edwards and Mrs. Margaret Macaulay for plaintiffs
Mr. Peter Millingen of Messrs. Clinton Hart & Company for defendants
Contract - Sale of land — Performance
Jurisdiction - Supreme Court — Whether the Supreme Court of Judicature of Jamaica has the jurisdiction to grant specific performance and to grant damages in lieu of such specific performance where the party is entitled to such order.
Persons who owned large areas of land and who were prepared to develop those lands, to provide residential lots within the corporate area of Kingston and Saint Andrew, found a ready market for them among the land-hungry population. The terms, whereby payment was made by way of a small deposit with small monthly payments, spread over several years, at the end of which one owned a residential lot made the prospect doubly attractive.
The first defendant, Patrick Wilkinson Chung (hereinafter called Patrick Chung) was one such owner. In 1957, he was the registered owner of 250 acres of land known formerly as “Waterhouse Pen” and later as “‘Patrick City” situated in the parish of Saint Andrew, and registered at Volume 865 Folio 86 of the Registered Book of Titles. He had this property surveyed and cut up into some 797 lots, and on or about November 1, 1957 he applied to the Kingston and Saint Andrew Corporation for approval of the proposed sub-division scheme as required by The Local Improvements Law (Cap. 227 of the 1953 Revised Laws of Jamaica). Approval to the sub-division scheme was eventually obtained on December 11, 1958, subject to certain conditions as to the establishment of roads within the sub-division.
Prior to approval being obtained, he had entered into agreements for sale with purchasers, one of whom was Mabel Joyce Harvey-McIntosh. By agreement dated May 18, 1957, Patrick Chung agreed to sell and Mabel Joyce Harvey-McIntosh to buy, property described as Lot 19 of Patrick City, Saint Andrew, for the agreed price of £500.00. A deposit of £150.0.0 was paid by her on the signing of the agreement and the balance by monthly instalments of £4.00, balance on completion of roadways. Mabel Joyce Harvey-McIntosh had by June 24, 1965, paid £526.00, representing the purchase price and the excess being apparently towards her share of costs. She died on January 29, 1968. This suit is brought by the plaintiffs as Executors of her estate to whom probate was granted in the Supreme Court on September 20, 1968.
On or about March 1, 1960, the first defendant, Patrick Chung, transferred his interest and estate in the land to the second defendant, Patrick City Limited (hereinafter called the Defendant Company) subject to contracts of sale of lots which he had already made with the right to receive in respect of such lots already sold, the outstanding balances of purchase money thereon, and notice of the assignment was given to the purchasers of the lots.
The sub-division plan of the said property was deposited in the office of the Registrar of Titles by Patrick Chung and the Defendant Company, their servants and/or agents, on or about October 1, 1960, and registered titles to various lots were prepared and issued in the name of the Defendant Company which held the same in trust for and on behalf of such purchasers and/or their nominees as had purchased or as had agreed to purchase the several lots from Patrick Chung or his assigns.
On or about January 12, 162, the Defendant Company or both defendants transferred their rights under contracts of sale to Farmers and Merchants Trust Company Limited, a company registered in Canada but carrying on business in Jamaica, subject to the rights of the purchasers in law and equity, and notice of the assignment was given to the purchasers of such lots.
On or about February 6, 1967, at the trial of issues arising between the first and second defendants on the one hand and their assigns, Farmers and Merchants Trust Company Limited, on the other (see Farmers & Merchants Trust Company Limited v. Chung et al, [1970], 15 W.I.R 366), Mr. Justice Kenneth Smith (as he then was) found, inter alia, that contracts for the sale of land for which sub-division approval had not been obtained were made in breach of the Local Improvements Law (Cap. 227 of the Revised Laws of Jamaica) and were illegal and unenforceable. It is common ground that the contract dated May 18, 1957, fell into this category.
The decision affected a great number of purchasers who had invested moneys in sub-division schemes which had not been approved by the Board of the relevant local authority prior to their contracts with the vendors. Not only did they lose their equitable interest in the land they purported to purchase but also stood to lose the moneys paid to the vendors on an illegal contract. Many vendors took the stand that such contracts were illegal and that the deposits were not recoverable, and as owners of the legal interest proceeded to re-sell more often than not at a higher price than that paid by the first purchaser.
As a result of public reaction the Local Improvements (Amendment) Act (Act No. 36 of 1968) was passed with retroactive effect to validate the contracts so negotiated in breach of the law, and to protect the rights of property which had accrued to purchasers between January 1, 1954 and the date of enactment of the amending Act - August 22, 1968, The relevant provisions are set out below:
“The validity of any sub-division contract shall not be affected by reason only of failure, prior to the making of such contract, to comply with any requirement of subsections (1), (2) and (3) of section 4 or to obtain any sanction of the Board under section 6 or section 6A, as the case may be, but such contract shall not be executed by the transfer or conveyance of the land concerned unless and until the sanction of the Board hereinbefore referred to, has been obtained.”
“This section (i.e. S. 9A) shall be deemed to have come into operation on the 1st day of January, 1954 hereinafter referred to as the “operative day” so, however that as respects transactions which took place between the operative day and the date of enactment of this Act, the amendment effected in the principal Law by virtue of this section of this Act shall not operate so as to nullify or affect any transfer or conveyance of land effected pursuant to any contract of sale made prior to the date of enactment of this Act.”
As was to be expected the amending legislation brought a rash of litigation in respect of the validated contracts against sub-dividers of land within its scope and in particular against the defendants. In one such claim founded on facts similar to this case ( Russell v. Patrick Chung et al) Zacca, J. (as he then was) recognised the effect of the amending Act in his judgment dated October 19, 1971 at page 15. He stated with reference to Act 36 of 1968:
“In order to give effect to the intention of the Legislature I hold that a proper construction of the amending legislation would be that it shall operate so as to give effect to all contracts entered since 1st January, 1954, which were illegal prior to the passing of the amending legislation.”
The amending Act also protected rights of property which had accrued between January 1, 1954, and the date of enactment, August 22, 1968, and which had actually been the subject of a transfer or conveyance. Were it not for the provision in section 3(2) of the Local Improvements (Amendment) Act (No. 36/68) that “the amendment effected in the principal law by virtue of this section of this section of this Act shall not operate so as to nullify or affect any transfer or conveyance of land effected pursuant to any contract of sale made prior to the date of enactment of this Act ….. “there would be no bar to a purchaser under a validated contract being granted an order for specific performance of the contract.
The land, the subject matter of this suit, was proved to be registered land to which the provisions of the Registration of Titles Law apply, and under which, once title to the land is registered, such registration is unassailable save in the case of fraud. This system follows the “Torrens” system of registration of title to land which is in force throughout Australia and in other countries as well, and has been adopted in Jamaica. In the case of Abigail v. Lapin [1934] All E.R., P.C. 720, at page 725A, Lord Wright describes it thus:
“…. It is a system for the registration of title, not of deeds; the statutory form of transfer gives title in equity until registration, but when registered it has the effect of a deed and is effective to pass the legal title; upon the registration of a transfer, the estate or interest of the transferor as set forth in such instrument, with all rights, powers and privileges thereto belonging or appertaining, is to pass to the transferees ……..”
Section 3(2) of Act 36/68 is therefore entirely consistent with the system of registering title to land in Jamaica for the purpose of passing the legal interest in land. Thus, the interest of a subsequent purchaser to whom the legal interest in the land had been conveyed or transferred during the transitional period was protected - fraud apart. This was the decision upheld in the Privy Council in the case of Rose Hall Limited v. Elizabeth Lovejoy Reeves (1975) 13. J.L.R. 30, where it was held, inter alia:
“….. That the retroactive effect of S. 9A(1) of Cap. 227 achieved by S. 3(2) of the 1968 Act was to protect rights of property which had accrued between January 1, 1954, and the date of enactment of the 1968 Act - August 22, 1968...
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