Graham Ferguson Lacey Claimant v Abraham Zion Sea Shells Reefs Ltd Defendants [ECSC]
| Jurisdiction | Antigua and Barbuda |
| Judge | Blenman: J,Blenman J |
| Judgment Date | 17 August 2006 |
| Judgment citation (vLex) | [2006] ECSC J0817-1 |
| Date | 17 August 2006 |
| Court | High Court (Antigua) |
| Docket Number | CLAIM NO 362 OF 2004 |
IN THE HIGH COURT OF JUSTICE
CLAIM NO 362 OF 2004
Dr. Richard Cheltenham QC with Mrs. Nelleen Rogers-Murdoch for the Claimant
Mr. Anthony Astaphan SC with Mr. Kendrickson Kentish for the First Defendant
Ms. E. Ann Henry and Ms. C Debra Burnette for the Second Defendant
Blenman: J; This is a ruling on a preliminary issue as to whether or not an Agreement is admissible in evidence.
Sea Shells Reefs Limited (Sea Shells) is a company that owns freehold title to land (the Property) situate in Antigua and Barbuda. The property that is held by the Company is referable to shares.
Mr. Graham Ferguson Lacey (Mr. Lacey) entered into an Agreement on 5th March 2004 (the Agreement) with Mr. Abraham Zion (Mr. Zion) to purchase shares in the Company. Mr. Zion is alleged to have acted on behalf of Sea Shells.
By virtue of Clause 2 of the Agreement, Mr. Zion, agreed to sell the shares to Mr. Lacey for a purchase price of seven million five hundred thousand United States Dollars (USD$7,500,000.00) (the purchase price).
Clause 3 of the Agreement states that:
"the purchase price will be payable in full on completion by way of a 12 — month Purchase Money Mortgage" (the Purchase Money Mortgage") denominated in United States dollars guaranteed by vendors and secured over the shares but without any personal guarantee, carrying interest at the rate of 10% per annum payable monthly in advance. Completion shall take place no later than 10th June 2004."
Clause 1 of the Agreement required Mr. Lacey to pay Mr. Zion a non refundable deposit of US$100,000.00 and in consideration Mr. Zion was required to grant Mr. Lacey the right, for a period of 90 days to expire on 3rd June, 2004, to conduct a due diligence study.
There is no dispute of the fact that on 5th March 2004 Mr. Lacey paid Mr. Zion the sum of US$100,000.00
A series of difficulties ensued between the parties and several attempts were made with a view of resolving them. One of the recommended methods of resolving the disputes resulted in Mr. Lacey giving Mr. Zion a memorandum proposing an Agreement to complete the transaction by the direct purchase of Sea Shells' property instead of the purchase of the shares that were referable to the property. The dispute, however, remained unresolved.
On 10th June 2004, Mr. Lacey sent a cheque in the sum of US$62,500.00 to Mr. Zion towards the first interest payment.
As a consequence, the issue arose as to whether the Agreement contemplated that Mr. Lacey should pay only US$62,500.00 as an interest payment or whether Clause 3 of the Agreement required Mr. Lacey to effect payments equivalent to one twelfth of the agreed purchase price.
It is alleged that by the 10th June 2004, Mr. Lacey did not pay Mr. Zion one twelfth of the purchase price and by letter dated June 10, 2004 Mr. Zion wrote Mr. Lacey terminating the Agreement. Mr. Zion replied that "the due diligence period" expired on June 3, 2004, since the purchaser was required to issue 12 notes payable on a monthly basis in advance and being a proportion of the purchase price. Subsequent correspondence between Mr. Zion and Mr. Lacey continued in relation to the termination of the agreement and with no resolution in sight, on June 11, 2004 Mr. Lacey caused a caution to be placed on the property owned by Sea Shells.
On 16th September 2006, Mr. Lacey filed a claim against Mr. Zion and Sea Shells in which he sought among other reliefs specific performance of the Agreement. Pleadings were exchanged and directions were given by the Court. On the 9th May 2006, Mr. Lacey filed a core trial bundle which contained the pleadings and other documents including an unstamped copy of the Agreement. Later, Mr. Lacey applied for summary judgment and after a hearing the Master refused his application.
Subsequently, Thomas J, gave directions for trial and ordered submissions to be filed and exchanged.
On 17th May 2006, thereafter, the trial came up for the hearing of the substantive matter.
On the morning of the trial Learned Senior Counsel Mr. Anthony Astaphan, appearing on behalf of Mr. Zion, indicated to the Court that he had filed on the previous afternoon supplementary submissions on points of law, on behalf of Mr. Zion. He was of the view that the Court may have wished to have sight of the submissions since they addressed preliminary issues of law that should be determined before embarking on hearing of the substantive matter.
Learned Queen's Counsel, Dr. Cheltenham appearing on behalf of Mr. Lacy, acknowledged that he had received the supplementary submissions.
Learned Queen's Counsel both agreed that the issues before the court were:
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(a) Whether the agreement was admissible in evidence;
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(b) What is the proper interpretation of Clause 3 of the Agreement?
Mr. Astaphan submitted that should the Court rule that the Agreement is inadmissible the matter should not go further. Dr. Cheltenham was of the contrary view.
The Court not having a sight of the supplemental submissions rose for a few minutes in order to peruse the submissions. On resumption of the Court, having read the submissions, I ruled that the issue of the admissibility of the Agreement should be ventilated as a preliminary issue.
During the resumed hearing Mr. Astaphan indicated to the Court that during the rising of the Court for a few minutes, Dr. Cheltenham had given him a copy of the Agreement that had an Inland Revenue Stamp and written below the stamp was the date May 17, 2006. Attached to the copy of the Agreement was a letter which Senior Counsel described "as strange and unlawful." The letter is dated 16th May 2006 and addressed to the Commissioner Inland Revenue. The caption of the letter is "Solicitors' Undertaking" and was written to the Commissioner of Inland Revenue by Mrs. Neleen Rogers-Murdoch counsel appearing on behalf of Mr. Lacey. It states thus:
"Further to our discussion with your regarding the stamping of the agreement attached heretowe hereby undertake to pay the sum of $1,518,750.00 being stamp duty assessed thereon, within 5 days of the letter.
Mr. Astaphan complained that the letter is highly irregular and that the Court should not take any cognizance of the copy of the Agreement which purports to bear the Inland Revenue's Stamp since it is unlawful in so far as the Agreement had now been stamped but no duty was expressly referred to. The duty was referred to in the attached undertaking by Mr. Lacey's solicitor which indicated her commitment to pay the Commissioner the sum of $1,518,750.00.
The Court heard arguments and reserved its ruling. By letter dated May 29th 2006 and copied to Mr. Astaphan, Dr. Cheltenham wrote the Registrar and requested that the parties be invited to further address the Court due to new developments in the matter since the last hearing which would necessitate such a course being taken.
It is undisputed that subsequently to the hearing of the matter on 17th May 2006, the Commissioner of Inland Revenue again assessed the Agreement and further stamped the Agreement in the sum of EC$20,000.00 as opposed to EC$1,518,750.00 Mr. Lacey paid the duty in the sum of $20,000.00 A copy with the Agreement with the Commissioner of Inland Revenue's further stamp was delivered to the Court on the 29th May 2006.
The Court was of the view that it was necessary to hear further arguments as requested and fixed the 19th June 2006 for further hearing. On that date, the parties requested and were granted leave to place further submissions before the Court.
The parties have dutifully complied with the Court's order and submitted additional written arguments. The additional submissions addressed the effect of this new assessment.
The issue that arises for the Court's determination is whether or not the agreement is inadmissible in evidence. In addressing that issue the Court of necessity has to resolve the following sub-issues namely:
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(a) Whether the Agreement breaches the Stamp Duty Act Cap 410 of the Laws of Antigua and Barbuda (the Stamp Duty Act) and or,
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(b) Whether it violates the Registration and Records Act, (the Registration Act) Cap 373 Laws of Antigua and Barbuda.
At this juncture, I would refer to the Registration and Records Act Cap 373 Laws of Antigua and Barbuda (the Registration Act).
Section 2 of the registration Act defines:
"Deed" to include every document in writing affecting or relating to lands, tenements, or hereditaments in Antigua and Barbuda."
Section 4 of the Registration Act states that:
"No deed shall be received in evidence in any proceeding whatever, whether at law or equity, in Antigua and Barbuda unless such deed shall have been duly registered."
Section 6 of the Registration Act states that:
"Every deed shall be lodged in the Record Office of Antigua and Barbuda, for registration, within the time hereinafter limited, that is to say —
If executed within Antigua and Barbuda, within three months after execution:
If executed anywhere out of Antigua and Barbuda, within twelve months after execution:
Provided that any Judge may, on cause shown, order any deed to be registered notwithstanding its not having been presented for registration within the time hereinbefore limited; and, in such case, a copy of the order of the court shall be attached to the deed and registered therewith. In the case of deeds executed before the coming into operation of this Act, the same shall be received for registration without the Judge's order required by this section."
Section 8 of the Registration Act states that:
"All deeds executed in Antigua and Barbuda and intended for registration therein shall be proved by the oath or...
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