Bettini & Britto Ltd v Dawn Run Ltd

• Jurisdiction: Antigua and Barbuda
• Judge: Thom JA
• Judgment Date: 20 December 2022
• Judgment citation (vLex): [2022] ECSC J1220-1
• Docket Number: ANUHCVAP2019/0012
• Court: Court of Appeal (Antigua and Barbuda)

Between:

Bettini & Britto Limited

Appellant

and

[1] Dawn Run Limited

[2] Galley Bay Club Limited

Respondents

Before:

The Hon. Dame Janice M. Pereira, DBE Chief Justice

The Hon. Mde. Gertel Thom Justice of Appeal

The Hon. Mr. Paul Webster Justice of Appeal [Ag.]

ANUHCVAP2019/0012

THE EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Civil appeal — Breach of contract — Appellate court's review of findings of fact — Time for performance of contract — ‘Reasonable time’ — Whether trial judge erred in law in finding that appellant was in breach of its obligations under clause 2 and 3 of agreement — Whether trial judge erred by failing to find that the respondents were in breach of their obligations under clause 5 of the agreement — Equity — Equity follows the law — Whether trial judge erred in law by not finding that equity would allow appellant to recover damages from second respondent, which failed to lawfully terminate the agreement

In 2005, the appellant, Bettini & Britto Limited (“B&B”) accepted Mr. Steve Barker's proposal to construct ‘Galley Bay Club’, a development project of high-end homes, condominiums, apartments, and a communal swimming pool in Galley Bay on the island of Antigua.

In July 2006, an agreement was executed between B&B and Dawn Run Limited (“Dawn Run”), a company incorporated in Antigua and Barbuda and owned by Mr. Barker (“July Agreement”) for the construction of ‘Galley Bay Club’. In August 2006 another company was formed by Mr. Barker called Galley Bay Club Limited and in September 2006, B&B entered into an agreement, in identical terms to the July Agreement, with Galley Bay Club Limited (“September Agreement”). Under both agreements, B&B contracted as the Manager, to inter alia, fully complete plans in accordance with the terms, submit a planning application to the Local Planning Authority and use its ‘best endeavours’ to obtain all planning permissions free from conditions for the ‘Galley Bay Club’ project. While both Dawn Run and Galley Bay Club Limited, contracted under the agreements to apply for and procure financing from a reputable source to the sum of US$15,000,000.00 to fund the ‘Galley Bay Club’ project.

In September 2006, the planning application for the ‘Galley Bay Club’ project was submitted to the Development Control Authority (“DCA”). However, the Chief Environment Officer noted potential environmental impacts of the project and did not recommend the project for approval at that time. The Chief Environment Officer instead advised that an environmental impact assessment (“EIA”) be conducted and submitted it to the Environment Division for review. The EIA was conducted as required and submitted to the Chief Environment Officer. In January 2007, the Environment Division approved Phase I of the project subject to several conditions. In relation to Phase II of the project, the Environment Division noted that there was potential for severe impact on the environment because of the increased run-off and as such, it called for changes in the design. In terms of financing, ABI Bank Limited advised Dawn Run that the banking facility requested had been approved. The amount of the facility listed was US$7,500,000.00, which was 50% of the funding Dawn Run needed to procure under the July Agreement.

Dawn Run, through its attorney-at-law, sought by letter on 20 ^th April 2007 to terminate the July Agreement pursuant to clause 18.1. Dawn Run stated that fatal flaws within the plans prepared by B&B impacted the project's ability to obtain full planning permission from the relevant authorities. Dawn Run further stated that this lack of planning permission impacted its ability to obtain the whole facility required, that being US$15,000,000.00 from a financial institution, to finance the project. B&B in response, rejected the purported termination by Dawn Run and denied that the July Agreement had been repudiated by it. B&B filed a claim in the court below, claiming that the respondents' purported termination of the July Agreement was a breach and that it had suffered loss and damages. Dawn Run argued that the agreement was validly terminated pursuant to clause 18.1 of the July Agreement. Galley Bay Club Limited also filed a defence and argued in similar terms to Dawn Run. It also filed a counterclaim that by reason of the termination on account of the breach, Galley Bay Club Limited suffered loss.

The learned judge dismissed the claim against the respondents. In rendering her decision, she held inter alia that there was ample evidence of breaches of clauses 2 and 3 of the July Agreement, as certain aspects of the designs in relation to the environment were overlooked by B&B. The learned judge also found no evidence of waiver or variation of the terms of the July Agreement by Dawn Run. The result was that there was a breach of the July Agreement and Dawn Run's subsequent termination was valid. The learned judge therefore dismissed B&B's claim. As it related to Galley Bay Club Limited's counterclaim, the learned judge held that it failed to prove the allegations in the counterclaim and therefore dismissed its counterclaim.

B&B being dissatisfied with the judgment of the learned judge has appealed. The main issues that this Court has to determine are: (i) whether the trial judge erred in law in finding that B&B was in breach of its obligations under clause 2 and 3 of the July Agreement; (ii) whether the trial judge erred by failing to find that the respondents were in breach of their obligations under clause 5 of the July Agreement; and (iii) whether the trial judge erred in law by not finding that equity would allow B&B to recover damages from Galley Bay Club Limited, which failed to lawfully terminate the September Agreement.

Held: dismissing the appeal; and awarding costs in the sum of $25,000.00 to Dawn Run, that:

• 1. When a contract is silent as to the time for performance of an act, the law implies that it is to be done within a ‘reasonable time’, and what period is ‘reasonable’ is a question of fact which must be determined on a case-by-case basis taking into consideration what would, in ordinary circumstances, be a reasonable time for the performance of the relevant services and to what extent the time for performance was in fact extended by extraordinary circumstances.

  Pitt v Shew (1821) 4 B & Ald 208 applied; Urban 1 (Blonk Street) Ltd v Ayres [2013] EWCA Civ 816 applied; British Steel Corp v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504 applied.

• 2. There was ample evidence before the learned judge that showed B&B's failure to design adequate plans which took into consideration all the essential factors to commence work on the building design. B&B's failure to provide adequately designed plans caused delays and risks which would have impacted the commercial viability of the project, especially where there was no timely resolution in sight. Given the evidence put before the court below, it cannot be said that the learned judge erred in finding that a project of Galley Bay Club's size and scope should not have been held at a standstill, 9 months after the execution of the July Agreement, unable to obtain the full and complete permissions required. Additionally, considering that B&B's plans needed to be revisited and did in fact cause the delays, it cannot be said its ‘best endeavours’ would have been taken. There also being no evidence of waiver or variation of clause 18.1, the learned judge was entitled to find that B&B having breached its obligations under clauses 2 and 3 of the July Agreement, the July Agreement was properly terminated pursuant to clause 18.1.

• 3. The learned judge did not make a finding as it related to clause 5 of the July Agreement as contended by B&B, rather the finding was limited to clauses 2 and 3. Dawn Run had lawfully terminated the July Agreement by letter dated 20th April 2007.

• 4. The September Agreement, having not been validly terminated by Dawn Run's letter dated 20th April 2007, meant that B&B was in breach of the September Agreement given its identical terms and obligations to the July Agreement. The learned judge made no finding of any breach by Galley Bay Club Limited. The failure to terminate in accordance with clause 18.1 was not a finding of breach of agreement. The learned judge simply found that Galley Bay Club Limited had not engaged clause 18.1 of the September Agreement and could not rely on Dawn Run's letter dated 20th July 2007. B&B having breached the September Agreement was not entitled to any damages in equity. Further, ‘equity follows the law’. This means that equity will not allow a remedy that is contrary to the law as equity treats the common law as laying the foundation of all jurisprudence and does not depart unnecessarily from legal principles.

  Stack v Dowden [2009] EWHC 782 (Ch) applied; Rowland v Blades [2021] EWHC 426 (Ch) applied.

Appearances:

Mr. Dane Hamilton, KC with him Mr. Dane Elliot-Hamilton for the Appellant

Mrs. Andrea Roberts-Nicholas and Ms. C. Kamilah Roberts for the Respondents

Thom JA

1 This is an appeal by the appellant, Bettini & Britto Limited (“B&B”) against the learned judge's decision to dismiss claims for breach of contract against the first respondent, Dawn Run Limited (“Dawn Run”) and the second respondent Galley Bay Club Limited.

Background

2 B&B is a company incorporated in Antigua and Barbuda which performs construction services. The directors of B&B are Mrs. Maria Britto-Bettini and Mr. Giancarlo Bettini.

3 In 2005, B&B was engaged in a series of meetings with Mr. Steve Barker, the sole shareholder and director of a company called Antigua Estates Real Estates Limited (“AERE”). In these meetings Mr. Barker outlined certain proposals relating to the construction of ‘Galley Bay Club’, a development project of high-end homes, condominiums, apartments, and a communal swimming pool in Galley Bay on the island of...