Royes (Clarence G.) v Campbell and another

• Jurisdiction: Jamaica
• Judge: FORTE, P: , SMITH, J.A. , K. HARRISON. J.A.:
• Judgment Date: 03 November 2005
• Neutral Citation: JM 2005 CA 63
• Judgment citation (vLex): [2005] 11 JJC 0301
• Court: Court of Appeal (Jamaica)
• Date: 03 November 2005

IN THE COURT OF APPEAL

BEFORE:

THE HON. MR. JUSTICE FORTE, P THE HON. MR. JUSTICE SMITH, J.A THE HON. MR. JUSTICE K. HARRISON, J.A

BETWEEN

CLARENCE G. ROYES

PLAINTIFF/APPELLANT

AND

CARLTON C. CAMPBELL

DEFENDANT/1ST RESPONDENT

AND

YVONNE A. CAMPBELL

RESPONDENT/2ND RESPONDENT

Hilary Phillips Q.C., Nesta Claire Smith and Marsha Smith Ernest Smith

Carol Davis for the 1 ^st Respondent

REAL PROPERTY - Beneficial interest

FORTE, P:

1 I have read in draft the judgment of my brother Smith J.A. and I agree. The issues have been comprehensively dealt with and the resolutions are in keeping with my own opinion. Consequently, I have nothing to add.

SMITH, J.A.

2 This is an appeal from an Order made on December 13, 2002 by Harris, J. dismissing the appellant's claim against the respondents for a declaration that he has a beneficial interest in property situate at 15 Lindsay Crescent, Kingston 10 in the parish of Saint Andrew, and registered at Volume 628 Folio 75 of the Register Book of Titles. By the said order Harris, J. also gave judgment for the first respondent on his counterclaim for an account of rent, an order of possession and mesne profits.

3 Background

4 The appellant, Mr. Clarence Royes, and the first respondent, Mr. Carlton Campbell were friends of long standing. They were classmates at the St. Andrew Technical School in the early part of the 1960s. In the 1970s they worked together at the Jamaica Industrial Development Corporation. They were not only close friends but during the 1970s, and 1980s their relationship was like that of brothers. The appellant, in the late 70s, guaranteed a student loan for the first respondent and assisted with his accommodation in Miami, when he was a student pilot. Their friendship ended in or about 1989 when differences over their respective interests in the property at Lindsay Crescent arose.

5 15 Lindsay Crescent

6 In November of 1981, 15 Lindsay Crescent ("the property") was purchased from Kathleen Barton and registered in the names of the first and second respondents, who were then husband and wife. At the time the appellant was a businessman and an engineer. The first respondent was a businessman and a pilot and the second respondent a real estate agent. There is a conflict of evidence as to the circumstances of the purchase of the property. According to the appellant, there was an oral agreement between himself and the respondents to purchase the property jointly with the appellant paying one half of the deposit and the respondents together paying the other half.

7 The first respondent denies the existence of any such agreement. He claims that the property was purchased by the second respondent and himself without any contribution by the appellant.

8 As said before, the property is registered in the names of the respondents alone. Thus, the legal estate is in the respondents and prima facie the legal estate carries with it the whole beneficial interest. For the appellant to succeed in his claim to a share in the beneficial interest he must show, on a balance of probability, that the registered owners, the respondents, hold the legal estate as trustees for themselves and the appellant. Lord Diplock in Gissing v. Gissing [1970] 3 WLR 255 at 267 expressed the legal principle in this way:

"Any claim to a beneficial interest in land by a person, whether spouse or stranger, in whom the legal estate in the land is not vested must be based upon the proposition that the person in whom the legal estate is vested, holds it as trustee on trust to give effect to the beneficial interest of the claimant as cestui que trust."

9 In the absence of an express trust, the appellant can only succeed in his claim to a beneficial interest in the property if he can establish, on the balance of probability, the existence of a resulting, implied or constructive trust. He may do so by showing that in all the circumstances it would be inequitable for the legal owners to claim sole beneficial interest. To establish such a trust the appellant must show that there was a common intention that he and the respondents should have beneficial interests in the property, and that he acted to his detriment on the basis of that common intention in the belief that by so acting he would acquire a beneficial interest.

10 The main issue, therefore, before this Court is whether or not the learned trial judge fell into error in concluding that the appellant had failed to establish his entitlement to a share in the beneficial estate.

11 The Appellant's Case

12 The appellant's evidence is to the following effect: Sometime in the 1980s, the first respondent told him that the second respondent, his wife, had a friend who owned property at 15 Lindsay Crescent which she was selling for $60,000.00. The first respondent invited the appellant to join him and his wife in the purchase of the property. The proposal was that the appellant would own 50% of the property and the respondents 50%. The deposit was $15,000.00 The first respondent informed the appellant that he had a friend, at the Royal Bank Trust Company, who could arrange a mortgage for $45,000.00. The appellant agreed to the proposal. In furtherance of this oral agreement he withdrew the sum of $7,500.00 from his account at the Royal Bank. He handed this sum of money, which represented one-half of the deposit, to the second respondent. This transaction took place at the Royal Bank building on Knutsford Boulevard, which is next door to the Trust Company. The second respondent left for the Trust Company to transact the business.

13 The intention of the parties was to develop the property by constructing eight (8) studio apartments for sale. To this end a company, Lindsay Court Limited, was incorporated. The appellant and his wife and the respondents signed the Memorandum of Association (Exhibit 1) and the Articles of Association (Exhibit 2). The Certificate of Incorporation was exhibited. A letter (Exhibit 4) addressed to the Registrar of Companies and signed by the first respondent, in which he purports to state the reason for incorporating the company, was relied on by the appellant. I will return to this letter later. The appellant was the managing director of the Company.

14 In furtherance of this oral agreement the appellant prepared plans for the proposed development of the property (Exhibit 5). He requested and obtained a preliminary budget report for the proposed development from Goldson, Barrett Johnson, Quantity Surveyors, (Exhibit 6). The appellant suggested to the first respondent that they convert the old house on the property into three flats with a view to generating income to assist in the financing of the proposed development. This was agreed. The appellant, at that time, was in the construction business and was a partner in, and the general manager of Clover Construction Company. He borrowed $13,000.00 from Clover Construction. This amount was disbursed by way of material delivered to the appellant. These materials included blocks, steel and cement. The appellant used these in the conversion of the old house into three self-contained flats. He testified that he got no assistance from the respondents in this endeavour.

15 In early 1982, the appellant opened an account at the Harbour View branch of the Royal Bank Jamaica Limited ("the Bank") in the name of Lindsay Court Limited ("the Company"). The signatories to the account were the appellant and any one of the directors. Cheques drawn on the account would require the appellant's signature and the signature of one of the other directors.

16 The parties agreed to borrow $15,000.00 from the Bank in order to furnish the flats. The money was borrowed in the name of the Company. In this regard a promissory note dated October 27, 1982 was signed by the first respondent and the appellant as directors of the Company (Exhibit 7). [This loan with interest was repaid on October 25, 1985 (Exhibit 7(a)].

17 The loan of $15,000.00 was converted to US dollars and used by the first respondent to purchase three stoves and three refrigerators in Miami for the partial furnishing of the flats. It was agreed that the money collected from the rental of the flats would be used to service the mortgage and loan payments. Pursuant to this arrangement the appellant instructed the Bank, by letter dated January 18, 1983 (Exhibit 8), to make monthly payments to the Royal Bank Trust by debiting the account of the Company.

18 The appellant gave evidence of many rental and lease agreements between the Company and various tenants over the years.

19 At the time of the purchase of the property the respondents had migrated to Miami. The first respondent was working with Air Jamaica. Whenever he was in Jamaica he stayed at the appellant's premises at 35 Stillwell Road. The appellant observed correspondence addressed to the respondents from the Trust Company which made no mention of the appellant. As soon as the first respondent was available the appellant asked him to explain the absence of his name from the document. The first respondent, he said, told him that the property was being purchased from a friend of the second respondent at a reduced price and that, if another name had been included on the agreement, the vendor would have asked for more money. The appellant was not happy with the explanation and contacted his attorney, Mr. K.D. Knight.

20 During the period 1984 to 1985 the appellant phased out his employment with Clover Construction. He started to work on his own as a building contractor. He converted the garage into an office. He exhibited a Bill of Quantities in respect of the work done in the modification of the garage (Exhibit 12).

21 The appellant testified that in November 1983, on his initiative, the parties agreed to sell to one Mr. Biersay a part of the property. The...