Gene B Samuel v Sheron Whinfield

JurisdictionAntigua and Barbuda
CourtHigh Court
JudgeBlenman J
Judgment Date10 February 2009
Judgment citation (vLex)[2009] ECSC J0210-1
Date10 February 2009
Docket NumberCLAIM NO. ANUHCV2006/0557
[2009] ECSC J0210-1

IN THE HIGH COURT OF JUSTICE

CLAIM NO. ANUHCV2006/0557

Between:
Gene B. Samuel
Claimant
and
Sheron Whinfield
Defendant
Appearances:

Mr. John Fuller for the Claimant

Mr. Alex Fearon for the Defendant

Blenman J
1

Mr. Gene Samuel seeks from Ms. Sheron Whinfield the sum of $72,000.00 on the basis that she owes him that sum, based on their agreement.

2

Background

Mr. Samuel was the part owner of a business place by the name of the Rayon House of Fashion. The Rayon House of Fashion was a business of general merchandising. The business was previously owned, in partnership, by Mr. Samuel and Mr. Prince Wills. It was agreed that Mr. Samuel's share in the partnership was worth US$20,000.00. Subsequently, that partnership wasdissolved and another was created between Mr. Samuel and Ms. Whinfield (who is Mr. Wills' niece). It appears as though the parties arbitrarily valued the partnership at US$100,000.00 and Mr. Samuel, who had previously invested US$5,000.00 into the partnership, was credited with US$25,000.00, which was to represent his share in the partnership. Ms. Whinfield was accepted as having a "share capital" in the partnership of US$75,000.00.

3

In the original contract, the parties agreed that a bank account would be created in the name of the partnership and payments in excess of EC $250.00 shall be drawn by cheques. Further, the parties agreed that 75% of the stocks, implements and trade materials of the partnership shall belong to Ms. Whinfield and 25% percent shall belong to Mr. Samuel.

4

Subsequently, the parties entered into another agreement which did not have the benefit of a lawyer's input. The parties agreed that Mr. Samuel would "relinquish his 25% investment in Rayon House of Fashion, totaling US$25,000.00 to Ms. Whinfield, and that all other agreements bearing the name of Mr. Samuel, including rentals, lease, bills and taxes, will now be the sole responsibility of Ms. Whinfield." The parties also agreed that Ms. Whinfield shall pay Mr. Samuel the sum of $12,000.00 yearly for a period of six years commencing on 15th December, 2005 and concluding 15th December, 2011.

5

There was a strange turn of events when the entire business enterprise, the Rayon House of Fashion, was destroyed by fire in August 2005. Ms. Whinfield has not paid Mr. Samuel any money. He has therefore filed a claim and seeks to recover the sum of $72,000.00, which he alleges is owed to him. He maintains that it was not a term of the agreement that he was to be paid for his share only if the business, the Rayon House of Fashion, continued to exist. The agreement had nothing to do with the Rayon House of Fashion continuing to be a going concern.

6

Ms. Whinfield strongly resists his claim. She says that she agreed to purchase Mr. Samuel's share in the partnership and this referred to the business as a going concern. She further asserts that at the time of signing the agreement, Mr. Samuel knew that she was to utilise monies/profits realised from the business the Rayon House of Fashion to pay the annual installments. She contends thatshe has no obligation to pay Mr. Samuel the sum claimed, in so far as the subject matter of the contract has been destroyed by fire.

7

Issues

The parties have raised several issues including whether Ms. Whinfield owes Mr. Samuel the monies, and whether the payment of the monies was dependent upon the business continuing to exist. However, I have sought to crystallise them, with no respect intending to learned Counsel, as follows:

  • (a) To what did the parties agree?

  • (b) Was the contract frustrated as a result of the destruction of the business by the fire?

8

Evidence

Mr. Samuel gave evidence on his own behalf and Ms. Whinfield testified on her own behalf. They were both cross examined. I have paid significant regard to their evidence, together with the documentary evidence presented to the parties, particularly the agreement dated 1st November, 2004.

9

Submissions

At the conclusion of the trial, in keeping with Part 39.3(2) of the CPR 2000, based on the joint request of both learned Counsel, the Court ordered that closing arguments be filed and exchanged together with authorities in 10 days. To date, I have not received any submissions.

10

Court's analysis and conclusions

I have given deliberate consideration to the evidence and the following represents my findings of facts: Mr. Samuel agreed to sell his 25% investment in the Rayon House of Fashion to Ms. Whinfield for the sum of US$25,000.00. The contract was drafted by Mr. Samuel with Ms. Whinfield's approval. The parties agreed that she would pay six equal consecutive annual installments of $12,000.00 each; the first installment was to have been paid on the 15th December, 2005. Tragedy struck the business premises of the Rayon House of Fashion and it was destroyed by fire in August 2005. All of the merchandise owned by the partnership was destroyed. Ms. Whinfield has failed to pay any of the installments. Even though Mr. Samuel had agreed to relinquish his interest in the business, after the signing of the agreement he remained a signatory to the partnership's bank account. In addition, he retained the keys to Rayon House of Fashion's business premises.

11

I come now to address the issues identified.

12

Issue No.1: To what did the parties agree?

There is no doubt that there is a dispute as to the meaning of the agreement. In seeking to ascertain the meaning of the agreement, the Court has to examine the entire document and determine the meaning. Usually, the written agreement is regarded as containing all of the terms of the agreement. However, there are circumstances in which a written contract does not expressly state the terms, or does so inelegantly. Where this occurs, the Court's has to seek to determine what the parties intended. In so doing, there are well established legal principles that guide that Court. There are no doubt two competing interpretations being argued for, in the case at bar.

13

In interpreting the contract the Court has to ascertain the intention of the parties. As a general rule the Court is limited in the search for the intention to the consideration of the document itself. InLovell & Christmas Ltd v Wall (1911) 104 LT 85 Cozens-Hardy MR said:

"If there is one principle more clearly established than another in English law it is surely this: It is for the Court to construe a written document. It is irrelevant and improper to ask what the parties, prior to the execution of the instrument, intended or understood".

The rule may be regarded as a branch of, or closely related to, the parol evidence rule. The reason for not allowing recourse to the negotiations to establish intention was explained inPrenn v Simmonds [1971] 3All ER 237. Lord Wilberforce said that 'such evidence is unhelpful' because only when the contract is finally made is there a consensus, and until that time the parties' respective intentions may change, or be refined. There can be no guarantee, therefore, that an intention appearing during negotiations has remained constant until the time of contracting. In those circumstances, it is thought safer to rely on the words of the document alone". However, the law has moved on.

14

Where the contract is in writing and signed, the party signing it is usually regarded as bounded by it. Although the primary obligations are contained in express terms, it is quite unusual for theparties to express all of the primary obligations, or to provide for every contingency. The Court, in these circumstances usually implies terms to fill out the gaps in the contract, based on the circumstances of the contractual relationship. See Hughes v Greenwich London Borough Council [1993] 4 All ER 577 [1993] 4 All ER 577. The terms will be implied where there is a compelling reason, or put another way, when it is essential.

15

The test to be implied was stated by McKinnon LJ inShirlaw v Southern Foundries [1926] 2 KB 206:

"Prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying, so that, if, while the parties were making their bargain, an officious bystander were to suggest some express provision for it in their agreement, they would testily supply him with a common "Oh, of course"".

16

What did the parties intend by Mr. Samuel's 25% investment in Rayon House of Fashion? Mr. Samuel is of the view that this means his interest in the partnership as distinct from the business enterprise, the Rayon House of Fashion. Ms. Whinfield argues for the contrary position. She says that it means 25% interest in the business enterprise which includes the shares and capital. The Court must seek to ascertain the meaning of that term. Could the term 25% investment in Rayon House of Fashion be restricted to interest or is it wide enough when read in the context of the entire contract to include stocks, interest, capital, money and good will? Where as is the case at bar, it falls to the Court to determine to what did the parties agree, the Court, in seeking to determine the meaning, has to ascertain what a reasonable person would conclude was the intention of the parties.

17

In doing so, I find the pronouncements of Lord Bingham of Cornhill inBank of Credit and Commerce International S.A. (in liq.) v Ali (No.1) [2001] UKHL 8 [2001] UKHL 8; [2001 2 WLR 735 very helpful. He stated that:

"In construing any contractual provision, the object of the Court is to give effect to what the contracting parties intended. To ascertain the intention of the parties the Court reads the terms of the contract as a whole, giving the words used their natural and ordinary meaning in the context of the agreement, the parties' relationship and all the relevant factssurrounding the transaction so far as known to the parties. To ascertain the parties' intentions the Court does...

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  • Gwenneth Webster v National Bank of Anguilla Ltd
    • Anguilla
    • High Court
    • 22 December 2010
    ...whether Mr. Akeame Mussington was legally entitled to withdraw the monies. 17 Ms. Ruan referred the court to the case ofGene B. Samuel v. Sheron Whinfield ANUHCV2006/0557, in which there was a review of the law as it relates to interpretation of a commercial contract. The court applied the ......

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