Silver Sands Estates Ltd v Lorenz Redlefsen
| Jurisdiction | Jamaica |
| Judge | P Williams JA,Edwards JA,Simmons JA |
| Judgment Date | 29 July 2022 |
| Neutral Citation | JM 2022 CA 85 |
| Docket Number | SUPREME COURT CIVIL APPEAL NO COA2021CV00033 |
| Court | Court of Appeal (Jamaica) |
| Year | 2022 |
[2022] JMCA Civ 28
THE HON Miss Justice P Williams JA
THE HON Miss Justice Edwards JA
THE HON Miss Justice Simmons JA
SUPREME COURT CIVIL APPEAL NO COA2021CV00033
IN THE COURT OF APPEAL
Written Submissions filed by Livingston, Alexander & Levy on behalf of the appellant
(Considered on paper pursuant to rule 2.4(3) of the Court of Appeal Rules 2002)
On 26 March 2021, Laing J (‘the learned judge’) refused to order the removal of caveats that had been lodged by Mr Lorenz Redlefsen (‘Mr Redlefsen’) against certain lots owned by the appellant, Silver Sands Estates Limited (‘Silver Sands’). The learned judge also refused Silver Sands' request to impose conditions or require an undertaking as to damages to retain those caveats. This appeal explores the correctness of that decision having regard to whether the learned judge erred in his refusal to order the removal of the caveats; in his finding that damages would not be an adequate remedy; in determining where the balance of convenience lay; in failing to impose conditions or require an undertaking as to damages for the retention of the caveats; and in utilising an order for security for costs as a factor in refusing to require an undertaking as to damages.
Silver Sands is the registered proprietor of 16 lots situated in the parish of Trelawny. In 2019, the Development Bank of Jamaica Limited (‘DBJ’) had oversight of an invitation for offers to purchase the lots further to a directive from the Government of Jamaica to divest ownership of the properties. The properties were high-value lots with market values ranging from $12,000,000.00 to $70,000,000.00. Sagicor Property Services Limited (‘SPSL’), acting as agents of DBJ, published advertisements inviting bids to purchase the lots. In what the learned judge described as a “commercially bizarre approach”, the invitation to bid stipulated no reserve price, nor did it reserve the right not to accept the highest bid for any of the lots. Instead, it explicitly indicated that the “highest valid offer” would be the winning bid.
Mr Redlefsen submitted bids on each of the 16 lots ranging from $1,600,500.00 to $1,612,600.00. The bids were rejected, and DBJ contended this was because Mr Redlefsen's proof of funds was not certified by his bank, and his customer information form was incomplete, violating the terms and conditions of the invitation to bid. Mr Redlefsen countered that there was no proper basis for the rejection as he had complied with the rules governing the bidding process. He maintained that he had submitted the highest valid bid (and in some cases, the only bid) for the 16 lots, and since his bids were in accordance with the requirements, as stipulated, Silver Sands, DBJ and SPSL were in breach of their contractual obligation to accept his bids.
Those competing contentions sparked discussions among the parties that bore no fruit. Therefore, on 7 May 2020, Mr Redlefsen filed a claim against Silver Sands, DBJ and SPSL for “damages for breach of contract in lieu of specific performance or in addition to specific performance” with interest and costs. In his particulars of claim, he indicated that Silver Sands, DBJ and SPSL had breached their contractual obligations to him as they refused to honour the terms of the invitation to bid without a valid basis. Silver Sands, DBJ and SPSL filed defences to that claim.
Six of the lots were sold to other persons, and nine were offered for sale from September to October 2020. In December 2020, Silver Sands entered into sales agreements with respect to two of those lots. Subsequently, on 13 January 2021, Mr Redlefsen lodged caveats against five lots on the basis that he had a legal and beneficial interest in them that arose from his bids. Those caveats were entered on 14 January 2021.
On 19 February 2021, Silver Sands filed a notice of application for the removal of those five caveats. It asserted that the claim to an interest in the properties that Mr Redlefsen asserted was the subject of proceedings before the court, and the question of whether Mr Redlefsen had made the highest valid bid was an issue to be determined at the trial. Further, it asserted that Mr Redlefsen had effectively circumvented the court's process to avoid having to establish a case for restraining Silver Sands from dealing with the properties as seen fit.
In an affidavit in support of the application, Miss Sheron Henry, company secretary of Silver Sands, challenged Mr Redlefsen's assertion, in his declaration in support of applications for the registration of the caveats, that he had a legal and beneficial interest in the lots. She asserted that none of the offers he had submitted for the lots was valid, and the issue of whether he had made the highest valid bid was a factual matter in dispute before the court. Thus, she posited, Mr Redlefsen had pre-empted the court's determination of the matter by lodging the caveats. She asserted that Mr Redlefsen had utilised the caveats to avoid an application for an injunction, noting that although Mr Redlefsen was aware of the ongoing efforts to sell the lots, he did not seek to restrain the marketing and sale of the lots.
In his affidavit in response, Mr Redlefsen asserted that his interest in the lots arose from 2019 when he was the highest bidder on the lots, and Silver Sands had neglected or otherwise refused to transfer the lots to him. He asserted that if Silver Sands were permitted to deal with the lots before a decision of the court as to his interest, he would be irremediably prejudiced. He further asserted that his interest in the lots was not all motivated by or based on monetary value but that he had a strong emotional and sentimental attachment to the Silver Sands property. He intended to preserve as much of the character of the area and keep them as green space, and no amount of money could suffice, in the event he succeeded in his claim after the properties were sold.
Mr Redlefsen also contended that there had been no proper basis for rejecting his bids. He averred that his bids included a statement from the Bank of America, which was not required to be verified, so his proof of funds was valid. Moreover, the incomplete portions of his customer information form related to place of business and employment, which were inapplicable to him as he was retired. He stated that based on the unequivocal promise made to him by Silver Sands, DBJ and SPSL that the “highest valid bid” would have been accepted, they had a contractual obligation to sell him the lots for which he was the highest bidder. He also indicated that the lots that had not yet been sold had been re-advertised for sale and the new invitations to bid specifically referenced the reserve price and the right not to accept the valid bid. He asserted that should Silver Sands, DBJ and SPSL be permitted to dispose of the lots, he would be irreparably prejudiced as he has a “very strong emotional and sentimental attachment” to the lots. He had spent every Christmas since 1979 on Silver Sands and wished them to be “transferred into a trust or some other entity that would be bound to preserve them as [a] green space in perpetuity”. Consequently, he asserted that damages would not be an adequate remedy should he succeed on his claim and Silver Sands and DBJ were permitted to sell the lots.
In response, Miss Henry noted that Mr Redlefsen had acknowledged that his bids were incomplete. She asserted that it was not for him to decide whether he should partially complete the customer information form, which was required as a part of the sellers' diligence, especially given that, as a financial institution, DBJ was subject to the Proceeds of Crime Act. She noted that the bidding instructions required “proof of purchase for cash purchase (a bank statement or letter verified by the bank)”. She contended that the wording, in its ordinary meaning, clearly required that whichever document was submitted as proof of funds for a cash purchase be verified by the bank.
She asserted that Silver Sands Estate has already been designed with green spaces, and it would be “unreasonable to expect that the community should remain frozen at the current level of development at [Mr Redlefsen's] behest”. She noted that, in any event, one of the lots contained a three-bedroom villa, and six of the lots were outside the Silver Sands gated community.
The learned judge heard the application for removal of the caveats on 15 and 16 March 2021. By the time the hearing commenced, Mr Redlefsen had lodged caveats against 10 lots. However, no application was made seeking an amendment to include the additional caveats that had been lodged.
In his consideration of whether to order the removal of the caveats or to impose conditions for their retention, the learned judge noted that the Judicial Committee of the Privy Council in Eng Mee Yong and Others v Letchumanan S/O Velayutham [1979] UKPC 13; [1980] AC 331, indicated that there are similarities between the effect of a caveat and an interlocutory injunction. He, therefore, narrowed his assessment of the application to three issues: (i) whether there is a serious issue to be tried in the claim; (ii) would damages be an adequate remedy; and (iii) where does the balance of convenience lie.
When assessing whether there was a serious issue to be tried, the learned judge explored the competing contentions surrounding the issue of whether Mr Redlefsen was indeed a valid bidder in respect of the lots and whether he had obtained an interest in them. In so doing, he acknowledged the dispute surrounding the customer information form and the bank statement. He concluded that he could not assess...
To continue reading
Request your trial