Viola Miller and Paul Miller v Marilyn Stewart

• Jurisdiction: Jamaica
• Judge: Morrison, J
• Judgment Date: 03 October 2013
• Neutral Citation: [2013] JMSC Civ 138
• Court: Supreme Court (Jamaica)
• Docket Number: CLAIM NO. 2010/HCV03934
• Date: 03 October 2013

[2013] JMSC Civ. 138

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN THE CIRCUIT COURT

Coram:

Morrison, J

CLAIM NO. 2010/HCV03934

Between

Viola Miller

1st Claimant

and

Paul Miller

2nd Claimant

and

Marilyn Stewart

Defendant

Civil Procedure — Application for Court Orders — Striking out — Summary Judgment — Stamp Duty Act — Promissory Note

1 The cause of the suit at bar is as a result of an agreement in writing, so called, dated 8 ^th April 2005, by which the defendant promised to pay to the claimants the sum of five hundred thousand dollars on or before the 31 ^st December, 2005.

2 As critically observed by the Defendant, the claim form does not set out the basis for the promise. The what, why and wherefore of the promise has not been supplied: ‘just what has or would the Defendant obtain in return for her promise to pay fivehundred thousand dollars ($500,000)’, asks the Defendant. Again, as observed by the Defendant, the so-called Agreement was not attached to the Claim Form as Part 8 of the Civil Procedure Rules demand. In further vitiation of the agreement, criticises the Defendant, the said agreement has not been exhibited to any reply or response to the affidavit in support of the application to strike out, nor has any counter affidavit been filed by the claimant.

3 The Defendant's Notice of Application for Court Orders, as adverted to, dated October 6, 2010, seeks to strike out the claim or, in the alternative, asks for summary judgment on the grounds that first, the claim discloses no reasonable cause of action and second, that the claim is otherwise an abuse of the process of the Court and a waste of the Court's time and resources.

APPLICANT'S SUBMISSIONS

4 First, there is no mutual consideration for the promise to pay. Accordingly, it is not a legally binding agreement and cannot be enforced in a court of law. Second, the transaction runs afoul of the Statute of Frauds as the claimants say that the $500,000.00 is to be paid in relation to the sale of land, part of Waterloo Avenue, St. Andrew, lastly the Applicant suggests that were the court to give countenance to the claim it would be lending itself to the approval of illegality.

5 The Applicant placed emphatic reliance on the Stamp Duty Act;Barrington Price v. Kavanagh Investments Ltd. E042 of 1993 ; Allan Toppin v. Raymond Lee et al, Suit No. E321 OF 2000 , Forbes v. Millen's Liquor Store (Dist.) Ltd, Suit No. E478 of 2001 ; Swain v. Hillman [2001] 1 ALL E.R. 91 [2001] 1 ALL E.R. 91, and other cases.

RESPONDENT'S SUBMISSIONS

6 The Respondent was content to repose on the submission that the Stamp Duty Act provides cover for the claim for $500,000.00 which is grounded in the promissory note of April 8, 2005. As such the Respondent recruited the authorities ofBirchall and Others v. Bullock (1896) 1QB 325; R v. Peter Blake, 16 J.L.R. 61 and Stanley Lalor v. Ainswort Campbell, Suit No. E 24 OF 1976 .

The Facts

7 The Claimants are relying on a promissory note or an agreement of April 8, 2005 between themselves and the Defendant in respect of the sale of property, part of Waterloo in the parish of Saint Andrew.

8 It appears that there was a subsequent agreement for sale dated April 26, 2005 between the said parties in relation to the said property. In respect of the subsequent agreement the relevant taxes were paid and the property duly transferred to the defendant as is borne out by the Certificate of Title.

9 As to the second agreement it is to be noted that it makes no mention of the first agreement, as such, it must be assumed that the second agreement superseded the first agreement.

10 A statement of Account was issued by the former attorney-at-law of the Claimants under cover of letter dated June 21, 2005, addressed to the Defendant. It showed that the Defendant owed the sum of $119,945.00: What then, of the additional sum of $500,00.00 that was to be paid on the sale price pursuant to the agreement for Sale of April 26, 2005 in the context of the payment of stamp duty and transfer tax on the amount of $3,500,00.00?

The Issues

11 The issues that are generated resolve into asking and answering, first, whether there was mutual consideration for the promise made by the defendant to pay to the claimants the sum of $500,000.00. Second, is the promissory note of April 8, 2005, purportedly embodying the promise to pay the sum of 500,000.00, in relation to the sale of the said property, offensive to the Statue of Frauds? Third, is the claim for the payment of the $500,000.00 tainted with illegality?

Resolution

12 In engaging the issue of the promissory note I accept that in order for legal liability to accrue there has to be in contractual terms, an offer followed by an acceptance of that offer and, finally there must be consideration. All three elements must inhere, As to the latter, both parties must receive something in return.

13 Accordingly, where there is no mutual consideration for the promise it cannot become legally binding.

14 Applied to the instant case, the pleadings, on its face, do not disclose what benefit, if any, accrued to the Defendant as a result of entering into the promise. The following case exemplifies the principle.

15 InTweddle v. Atkinson [1861] 121 ER 762 [1861] 121 ER 762, the fathers of a young couple who intended to marry agreed that each would settle a sum of money on the couple. The father of the prospective bride died before settling the sum as promised thus precipitating the would-be groom to sue the executors of the estate of the deceased when they refused to pay over the money. Though the Plantiff was named in the agreement the suit failed as he had not given any consideration for the said agreement.

16 I now move to deliberate on the applicability of the Statue of Frauds to the claim. If, which has not been deflected, the Claimants answer to the Defendant is that the payment of the additional $500,000.00 is in relation to the sale of land, part of Waterloo in the parish of Saint Andrew, then, such a transaction must not offend the Statue of Frauds.

17 It is trite law that the disposition of land must be evidenced in writing. Since the Claimants say that the additional sum of $500,000.00 is in relation to the sale of the said land, it follows that it must be evidenced in writing. However, the promissory note was not annexed to the Claim Form nor was it exhibited to any reply or response to the affidavit in support of the Application to Strike Out. In point of fact, what has beenannexed is the Agreement for Sale dated April 26, 2005. Even so, the agreement for sale omits any mention of the so-called agreement that is embodied in the promissory note of April 8, 2005. It follows that the promissory note was not incorporated into the agreement for sale. Had it been, the Stamp Duty and Transfer Tax that was in fact paid on the agreement for sale of April 26, 2005, reflected that fact only without the liability for taxes on the promissory note sum. Accordingly, the transaction not only violates the Statue of Fraud but it also signalizes illegality.

18 I shall now enlarge on the above. In doing so I go to the Stamp Duty Act for its applicability to the questioned transaction. According to Section 33 of the Act, the expression ‘bill of exchange’ includes draft, order, cheque, and letter of credit and any document or writing (except a bank note) entitling or purporting to entitle any person, whether named therein or not, to payment by any other person of, or to draw upon any other person for, any sum of money; and the expression ‘bill of exchange payable in demand’ includes:-

• (a) bills of exchange payable at sight or on presentment.

• (b) an order for the payment of any sum of money by a bill of exchange or promissory note, or for the delivery of any bill of exchange or promissory note in satisfaction of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen.

19 From the extract above it is clear that The Stamp Duty Act identifies a promissory note as one the instruments on which stamp duty is payable.

20 Further, says Section 36 of the said Act, ‘no instrument, not duly stamped according to law, shall be admitted in evidence as valid or effectual in any court or proceeding for the enforcement thereof’. These are plain words yet are the subject of disagreement between the parties.

21 InBirchall and Others v. Bullough, supra , the judgment of the court, taken from the headnote, is, that in an action for money lent, an insufficiently stamped promissory note, purporting to be signed by the defendant and expressed to be given for money lent, was put into the Defendants hands by the Plaintiff's counsel for the purpose of refreshing his memory and obtaining from him an admission of the loan. It was held that the Plaintiffs were entitled...