Gregory Gordon v Jacqueline Havener

• Jurisdiction: Antigua and Barbuda
• Judge: Gonsalves JA
• Judgment Date: 07 December 2017
• Judgment citation (vLex): [2017] ECSC J1207-2
• Court: Court of Appeal (Antigua and Barbuda)
• Docket Number: ANUHCVAP2015/0030
• Date: 07 December 2017

EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Before:

The Hon. Mr. Davidson Kelvin Baptiste Justice of Appeal

The Hon. Mde. Louise Esther Blenman Justice of Appeal

The Hon. Mr. Anthony Gonsalves, QC Justice of Appeal [Ag.]

ANUHCVAP2015/0030

Between:

Gregory Gordon

Appellant

and

Jacqueline Havener

Respondent

Appearances:

Mr. Vashist Maharaj and with him Ms. Samantha May for the Appellant

Mr. Dane Hamilton, QC and with him Mr. D. R. Hamilton for the Respondent

Civil appeal — Whether contracts for sale of land entered into between the parties are valid and enforceable — Whether there was an intention to create legal relations between the parties — Whether consideration paid under the contracts — Specific performance — Proprietary estoppel — Whether an equitable estoppel can be established when a cause of action in contract is available — Whether learned trial judge failed to properly assess the value of the claim in awarding costs — Rule 65.5(2)(b) of the Civil Procedure Rules 2000

The appellant, Gregory Gordon, alleged that the respondent, his sister, Jacqueline Havener, agreed to sell him three parcels of land by virtue of three written agreements. The first written agreement is dated 15^th June 2001 and concerns the sale of Parcel 117 being a portion of Parcel 59 in Block 25 3290A of Registration Section: St. Phillips North for US$1,000.00. The second and third written agreements are dated 27^th August 2007 and concern the sale of Parcel 82B, being a portion of Parcel 82 and, Parcel 116 being a portion of Parcel 59, of Block 25 3290A in Registration Section: St. Phillips North respectively for $10.00 each. In the court below, the appellant claimed for specific performance of the said agreements or in the alternative, damages.

The appellant's case is that the respondent refused to honour the contracts to transfer ownership of the properties to him, despite him paying to her a cheque in the sum of US$3,000.00 which represented the full consideration for the purchase of the three parcels. He contended that the respondent agreed to enter into the contracts as part of a scheme of family arrangements. Relying on the agreements, the appellant entered into occupation of the various parcels of land and expended sums on maintenance, property taxes, and capital improvements to same. He further claimed that as a result of her conduct, the respondent was estopped from denying his rights to possession of and beneficial and legal ownership over the said three parcels.

In response, the respondent argued that she constituted the appellant her lawful attorney with respect to Parcel 59 and on 27^th August 2007, and in breach of his duties as a fiduciary, the appellant procured the execution of the alleged contracts of sale (“the 2007 contracts”) for a consideration expressed therein as $10.00. The respondent alleged that no consideration was given by the appellant in respect of the alleged contracts of sale, and that the sum of US$3,000.00 was provided to enable the respondent to retain counsel in a pending claim. She averred that the said sum was paid 17 months prior to the contracts for sale of Parcels 116 and 82B and 4 years and 7 months after the contract for sale of Parcel 117. With respect to the purported 2001 contract, the respondent submitted that the appellant, in further breach of his duties as a fiduciary, sought to benefit himself by securing the execution of the alleged contract of sale by taking advantage of the physical vulnerability of the respondent. She contended that the appellant rendered the purchase price illusory by not reflecting the true value of the land in question, and thereafter provided no consideration in respect of the contract of sale. Additionally, she submitted that no scheme of family arrangement existed.

The learned trial judge dismissed the appellant's claim in contract on the basis that the agreements were invalid and unenforceable. The learned trial judge based his decision on his findings that the parties had no intention to create legal relations, and secondly on an absence of consideration.

The learned trial judge also declined to grant any relief on the basis of equitable estoppel on the grounds that the appellant had adduced no evidence of any request by the respondent to expend the monies he did, and what the learned trial judge considered to be a conflict in the appellant's evidence in that the appellant could not be relying on a promise by the respondent to give him land which the appellant already effectively owned by virtue of his ownership of the leasehold interest.

The learned trial judge dismissed the claim and awarded costs on a prescribed basis of $7,500.00 based on a valuation of the claim as $50,000.00 pursuant to rule 65.5(2)(b) of the Civil Procedure Rules 2000 (“CPR”).

The appellant appealed the learned judge's decision arguing, inter alia, that: (i) the learned judge's finding that the appellant by virtue of a lease in respect of Parcel 59 effectively owned said parcel and could not rely upon a promise by the respondent to transfer to him the said land was wrong in law; (ii) the learned judge erred in finding that there was no intention to create legal relations; (iii) the learned judge's finding that no consideration was paid under the agreements and therefore no valid contract existed was against the weight of the evidence and wrong in law; (iv) the learned judge's finding that the appellant was not entitled to specific performance was wrong in law and unsupported by the weight of the evidence; (v) the learned judge erred in finding that the appellant did not have a claim in proprietary estoppel; and (vi) the learned judge's finding that the value of the claim was $50,000.00 was against the weight of the evidence.

The respondent filed a counter-notice of appeal limited to the order made by the learned judge in relation to costs.

Held: dismissing the appeal and the counter appeal, affirming the order of the learned trial judge, awarding costs of the appeal to the respondent in the amount of $2,500.00, that:

• 1. A leasehold interest is distinct from the freehold interest in property. Any ownership or possession of the former does not equate to, constitute, or prevent acquisition of ownership of the latter. The finding by the learned judge on the issue of the appellant's ownership of Parcel 59 is erroneous. The appellant's leasehold interest was distinct from the freehold interest in the property.

• 2. An appellate court is not entitled to interfere with a finding of fact of a lower court unless the judge's conclusion was rationally unsupportable, the decision being one that no rational judge could have reached. In the circumstances, the finding by the trial judge of lack of intention to create legal relations is one of fact.

  McGraddie v McGraddie [2013] UKSC 58 considered; Henderson v Foxworth Investments Ltd [2014] 1 WLR 2600 considered.

• 3. In deciding issues of contractual intention, the courts apply an objective test. That is, whether there is a binding contract between the parties, and, if so upon what terms depends upon what they have agreed. It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words and conduct, and whether that leads to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations.

  Traditionally in the case of agreements in a commercial context, there is generally a presumption that parties intend to be legally bound. On the other hand, parties in a domestic or social context are generally presumed not to intend to create legal relations. Whether agreements between close relatives are enforceable depends on the circumstances of each case. In the instant case, approaching the matter on the basis that these are agreements made in a social or domestic context, and that a presumption applies that it was not intended to create legal relations, the evidence before the judge rebutted that presumption to an extent that the judge's decision simply was not rational. Objectively considered, the parties intended to be bound by their agreements at the respective dates they executed same.

  RTS Flexible Systems Ltd. v Molkerei Alois Muller [2010] UKSC 14 applied; Rose and Frank Co v J.R. Crompton & Bros. Ltd [1925] AC 445 applied; Snelling v John G. Snelling Ltd. [1972] 1 All ER 79 applied.

• 4. In the instant case, the learned trial judge was correct when he found that no consideration was ever paid as the very contracts contained the term that stated payment was due on signing. Further, the appellant cannot now assert that the respondent never sought to rescind the agreements and that he should be allowed to pay the consideration now as this was not part of his pleaded case. It would be unfair to the respondent for the court to consider that argument by the appellant. Further, the appellant did not come to the court with clean hands when he alleged that he had paid the required consideration, the court having found that he had not, and for that reason the learned judge was correct not to grant specific performance.

• 5. If a claim properly lies in contract, no proprietary estoppel can be established, at least when the promise or assurance being relied upon arises exclusively out of the contract. In the circumstances, having determined that a valid contract existed between the parties, as between the contract and proprietary estoppel, it is to the contract that the appellant must look for his remedy. Therefore, the claim in proprietary estoppel arising out of a promise to transfer the properties referred to in the contracts is not available to the appellant.

  Riches v Hogben [1985] 2 QD R 292 applied; Wilson Parking New Zealand Limited v Fanshawe 136 Limited et al [2014] NZCA 407 applied.

• 6. It was...