Smith (Dorrell Neil) v Linnet May Chin

• Jurisdiction: Jamaica
• Judge: BROOKS, J.
• Judgment Date: 22 February 2006
• Judgment citation (vLex): [2006] 2 JJC 2701
• Court: Supreme Court (Jamaica)
• Docket Number: CLAIM NO. CL. S. 222 OF 2000
• Date: 22 February 2006

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

CLAIM NO. CL. S. 222 OF 2000

BETWEEN

DORRELL NEIL SMITH

CLAIMANT

AND

LINNETT MAY CHIN

DEFENDANT

REAL PROPERTY - Interest rate

1 SALE OF LAND - WHAT INTEREST RATE IS PAYABLE ON UNPAID PURCHASE MONEY?

BROOKS, J

2 This case is a success story for the relatively new Case Management system. When it came up for the hearing of the Pre-Trial Review, counsel, instead of attending with a view to requesting "the standard orders" as too many counsel now seem to do, were prepared, in the true spirit of case management, to attempt to resolve the matter, if at all possible.

3 An examination of the issues in dispute led them to agree to have an out of court meeting to attempt resolution. As a result of that meeting they returned to court asking for the court's adjudication on one issue only, namely; "what rate of interest is properly payable on unpaid purchase money in the contract for sale of land signed between the parties".

4 I shall first introduce the parties, outline the background to their dispute and then address the issue to be resolved.

5 Parties and Background

6 The pleadings show that Leslie Keith Thelwell and Linett May Chin are registered on Transmission as the proprietors of premises situated at No. 11 Lyndhurst Road, Kingston 5, in the parish of Saint Andrew ("the premises"). The premises are comprised in a Certificate of Title registered at Volume 785 Folio 81 of the Register Book of Titles.

7 By an agreement for sale dated 4 ^th April 1986, Mr. Thelwell contracted to sell the legal interest in the fee simple to Mr. Dorrell Neil Smith. I shall use Mr. Dorrell Smith's first and last names in order to avoid confusion with counsel leading for Ms. Chin. Mr. Dorrell Smith was placed in possession of the premises pursuant to the contract. The sale has not yet been completed, having been beset with disputes concerning the accounting for payments of the purchase price. Mr. Thelwell has since died, and there are now different attorneys representing the respective parties.

8 Mr. Dorrell Smith filed this claim seeking an order for specific performance of the contract. Ms. Chin (stepping into Mr. Thelwell's shoes) filed a defence resisting the claim on the basis that a notice to complete which was sent to Mr. Dorrell Smith, was not complied with and the agreement was therefore terminated.

9 As I have already indicated, that issue has been happily resolved. The parties have now agreed that Mr. Dorrell Smith still owes the sum of $30,000.00 on the purchase price of $50,000.00. The period agreed for which the interest should be payable is from 17 ^th September, 1987 to the date of judgment.

10 Is interest payable on this sum, and if so, at what rate?

11 The Submissions

12 Mr. Philpotts-Brown did not deny that interest is payable but submitted that Mr. Dorrell Smith should be required to pay no more than 12½% per annum interest. This, he submitted, is because the contract is subject to the Moneylending Act which, according to him, restricts interest rate to that figure. He cited in support, the unreported decision in the case of Debbie Lynne Ltd. v. Collin Husbands Suit No. CL. 1977/D064 (delivered February 4, 1985).

13 Mr. Lowell Smith for Ms. Chin, argued, in response, that the rate of 21% per annum should be the appropriate rate. He did not seek to challenge the finding in the Debbie Lynne case. He sought, instead, to distinguish it on the very slim ground that whereas Debbie Lynne concerned unpaid money on a building contract, the instant case concerned unpaid money on the sale of realty. He cited no authorities for his proposition. Mr. Lowell Smith failed to convince me that there was any material difference between the two for the purposes of the issue to be resolved.

14 The Law

15 Is Interest Payable?

16 It has long been established that an unpaid vendor is entitled to interest on the monies due to him. In In re Pigott and the Great Western Railway Company [1881] 18 Ch. D. 146 Jessel M. R. stated that the ordinary rule was that, "where the vendor has shewn his title, the purchaser pays interest from the time at which he might prudently have taken possession..." The learned authors of the 21 ^st Edition of Gibson's Conveyancing (at p. 171) explain the rationale for the payment of interest in this way:

"Equity looks on as done that which ought to be done. Therefore if completion does not take place on the contractual...