Theophilus McLeod v Joseph Richards

• Jurisdiction: Jamaica
• Court: Court of Appeal (Jamaica)
• Judge: Morrison JA,McIntosh JA,Lawrence-Beswick JA (AG)
• Judgment Date: 31 July 2015
• Neutral Citation: [2015] JMCA Civ 44
• Docket Number: SUPREME COURT CIVIL APPEAL NO 8/2012
• Date: 31 July 2015

[2015] JMCA Civ 44

JAMAICA

IN THE COURT OF APPEAL

Before:

The Hon Mr Justice Morrison JA

The Hon Mrs Justice McIntosh JA

The Hon Ms Justice Lawrence-Beswick JA (AG)

SUPREME COURT CIVIL APPEAL NO 8/2012

Between:

Theophilus McLeod

Appellant

and

Joseph Richards

Respondent

Morrison JA

1 I have had the advantage of reading in draft the judgment prepared by my learned sister, Lawrence-Beswick JA (Ag). I agree with her reasoning and conclusions and there is nothing that I can usefully add.

McIntosh JA

2 I have read the draft judgment of my sister Lawrence-Beswick JA (Ag) and agree with her reasoning and conclusions.

Lawrence-Beswick JA (AG)

3 On 15 December 2011, the learned trial judge Simmons J entered judgment for the respondent, Mr Joseph Richards, thereby refusing the claim of the appellant, Mr Theophilus McLeod, to be paid mesne profits from January 2006 to September 2008 with interest at a commercial rate, and to a detailed accounting of rental collected on property at 54 East Street Old Harbour, Saint Catherine. This is an appeal from that judgment.

Background

4 By an agreement for sale dated 6 January 2006, Mr Theophilus McLeod agreed to purchase a parcel of land at 54 East Street, Old Harbour from Mr Joseph Richards for the price of $3,500,000.00. There were, however, special conditions attached to the agreement. The conditions relevant to this appeal were:

• ‘3. In the event of the Agreement being rescined [sic] all monies paid hereunder by the Purchaser shall be refunded without interest and free from deductions SAVE & EXPECT [sic] that the Purchaser hereby agree [sic] to pay to the Vendor's Agent to deduct the said sum from the Deposit paid herein [sic].

• 4. The sale is subject to the Approval of the Sub-Division Plan.’

These conditions meant that the sale was conditional on Mr Richards obtaining approval for sub-division of the land and that any money refunded should be free of interest.

5 The agreement was that on payment of $2,500,000.00 Mr McLeod would be entitled to vacant possession of the property. At the time of the agreement there were two tenants on the property paying a total rental of $27,000.00 per month.

6 On 3 February 2006, after paying $2,500,000.00, Mr McLeod arranged for Mr Richards to pay the rentals collected from the tenants to his agent. During the following months, Mr Richards received some rentals and paid them over, as arranged.

7 In March 2006, one month after having received the $2,500,000.00 deposit, Mr Richards asked Mr McLeod to vary the agreement concerning the final payment and to pay him immediately rather than when the subdivision approval would have been obtained. He promised that he would still obtain the sub-division approval and splinter title for Mr McLeod's portion of the land. Mr McLeod agreed to the variation and paid the final balance of $1,000,000.00 on 3 March 2006.

8 The subdivision approval was refused in December 2006. The appeal of that decision was refused by the relevant minister in February 2008. The parties thereafter appear to have recognised the agreement as having come to an end and Mr McLeod requested the return of the purchase money. Mr Richards informed Mr McLeod that he had no money to repay the purchase price. Mr McLeod then offered to purchase the remaining portion of land, thereby purchasing the whole lot and thus removing the necessity for subdivision. Mr Richards refused that offer which had been based on an independent valuation and in September 2008 Mr McLeod filed suit for specific performance of the agreement or alternatively for the payment of mesne profits and the detailed accounting of rental monies paid and commercial interest, inter alia.

9 In the defence to the suit Mr Richards stated that he did not have the funds to repay Mr McLeod and that he was trying to sell the property to obtain the money to do so.He, however, admitted that he was to provide Mr McLeod with some rental amounts from the tenants. He had given Mr McLeod only some of those payments, until January 2008.

10 Mr McLeod therefore filed an application for summary judgment on 2 October 2008. Before the matter came up for hearing, Mr McLeod paid the entire cost for a 2 ^nd valuation of the property by a different valuator and in March 2009 when that report was submitted, he offered to purchase the land for the new increased value indicated on that second valuation. Again, Mr Richards rejected the offer.

11 On 4 March 2010, one year after rejecting the offer, attorneys-at-law for Mr Richards indicated to Mr McLeod's attorney-at-law that they had $3,400,000.00 available to pay to Mr McLeod and they invited discussions concerning any interest payment on the outstanding purchase price and on the rental monies which had been paid to Mr McLeod. This proposed payment was rejected by Mr McLeod as being based on what was described as being ‘a grossly inaccurate presumption concerning deductions’.

12 Almost nine months had passed before the application for summary judgment was before the court on 22 November 2010. On this occasion Mr Richards' attorneys-at-law undertook to pay to Mr McLeod the sum of $3,400,000.00 and in December 2010 they honoured that undertaking.

13 Yet another year passed and an amended claim was tried on 15 December 2011 by Ms Justice Simmons. The claim had been amended to include, inter alia, a claim for damages.

14 It has not been challenged that at the trial, counsel for the appellant stated that she would only pursue paragraphs g, h, and j of the amended claim, namely, claims for:

• ‘g) An Order that the Claimant is entitled to payment of mesne profits on the said property from January 2006 to September 2008, (being 2 years and 8 months @ $27,000.00 per month) totalling $864,000.00, and continuing to the date of the hearing in this matter.

• h) An Order that the Defendant provide a detailed accounting of all rental collected for the said property from January 2006 to the date of hearing of this matter.

  …

• j) Interest at the commercial rate of 2 percent above the Bank of Jamaica rate for the period, pursuant to section 3 of the Law Reform Miscellaneous Provision Act.’

This reduction in the reliefs sought was no doubt due in no small part to the fact that Mr McLeod was by then in receipt of the refund of $3,400,000.00 of the purchase money. However, in her written submissions to the court below, despite her indication that her claim was limited as detailed above, counsel for the appellant included submissions for the recovery of $100,000.00 purportedly withheld by the respondent for a survey diagram.

Grounds of appeal

15 The appellant filed the following grounds of appeal:

• ‘(a) The Learned Judge having correctly found that the Agreement for Sale between the parties came to an end on February 4, 2008 when the term for sub-division could not be carried out, erred and/or misdirected herself in failing to rule that the term for non-payment of interest contained in the said Agreement for Sale also came to an end and the Claimant was then entitled to repayment of the full sum of $3,500,000.00 paid by him.

• (b) The Learned Judge erred and/or misdirected herself in finding that the Claimant had “failed in his bid to establish his claim for interest.” [Paragraphs 29 – 30 of the Judgment]

• (c) The Learned Judge erred and/or misdirected herself in ruling that the Claimant's evidence in paragraph 46 of his witness statement was hearsay, and striking out same.

• (d) Having done so, the Learned Judge prejudiced the Claimant's entitlement to interest at the commercial rate which caused the Claimant to suffer a grave injustice.

• (e) The Learned Judge erred and/or misdirected herself in granting the Defendant's no case submission finding that “in order for the Claim for mesne profits to succeed the Claimant would have had to prove that he was still entitled to possession after February 2008 and that the defendant had either trespassed or had kept him out of possession”; when the Claimant's claim for mesne profits was for the period January 2006 to February 2008. The uncontroverted evidence before the Court was that during this period, the Claimant was entitled to possession and therefore rental under the Agreement for Sale. The Claimant's evidence that he was only paid a portion of the rental for this period was also uncontroverted by the Defendant who did not give evidence at the trial. The Court should therefore have found that the Claimant was entitled to mesne profits in the sum of $298,100.00 claimed and erred and/or misdirected herself in failing to so find.

• (f) The Learned Judge failed to consider and/or to properly consider all the submissions made on behalf of the Claimant.

• (g) The Appellant reserves the right to amend/delete or add to his Grounds of Appeal.’

The orders sought were:

• ‘(1) An order setting aside the said orders granted by the Honourable Ms. Justice N. Simmons handed down on the 15 ^th December 2011.

• (2) That the Appellant/Claimant is entitled to mesne profits in the sum of $298,100.00 for the period of January 2006 to February 2008.

• (3) Alternatively, that the Claimant is entitled to damages in the sum of $298,100.00 — being the outstanding rental for the period January 2006 to February 2008.

• (4) That the Appellant/Claimant is entitled to interest at the commercial rate on the sum of $3,500,000.00 and the said outstanding mesne profits and/or damages at the rate of 16% per annum, from February 2008 until the date of payment.

• (5) Costs to the Appellant.

• (6) Such further and/or other relief as this Honourable Court may deem fit.’

The orders sought were:

Appellant's submissions

16 Counsel for the appellant submitted that the appellant had been put into possession before completion and therefore was entitled to the rents and profits from the time of taking possession (Halsbury's Laws of England Vol 42, para 196)....