Grenville Radio Ltd v James et Al

• Jurisdiction: Antigua and Barbuda
• Judge: Mitchell, J
• Judgment Date: 13 January 2003
• Neutral Citation: AG 2003 HC 26
• Date: 13 January 2003
• Court: High Court (Antigua)
• Docket Number: ANUHCV1996/0133

High Court

Mitchell, J.

ANUHCV1996/0133

Grenville Radio Limited

and

James et al

Appearances:

John Fuller, Rika Bird with him, for the claimant.

Eleanor Clarke for the defendant.

Real property - Registered land — Claimant company owned and operated a radio station — Charge by bank under the Registered Land Act, Cap. 374 — Valuation — Sale of land by bank by auction — Whether statutory provisions to be followed by chargee prior to sale were observed — According to the facts the minimum standards required by the law governing the sale of charged land in the State of Antigua and Barbuda were not followed — Damages to which claimant entitled to be assessed.

Mitchell, J

1 This is a banker and customer case. It involves a question of the duty of care owed under the Registered Land Act by a Chargee to a Chargor in realising a land security given by the Chargor to the Chargee in the State of Antigua and Barbuda.

THE FACTS

2 Grenville Radio Limited (hereinafter “the claimant Company”) is a registered company, which operates Radio ZDK. Nathaniel “Paddy” James (hereinafter “the 1st defendant”) is an auctioneer of many years standing in Antigua and Barbuda, and who auctioned the land in question. CIBC (Caribbean) Limited, formerly Canadian Imperial Bank of Commerce, (hereinafter “the 2nd defendant Bank”) is a licensed international bank with premises in St John's in Antigua and, at the time in question, was the banker of the claimant Company.

3 The evidence disclosed that, commencing in the year 1987, the 2nd defendant Bank made a series of loans to the claimant Company. The 2nd defendant Bank, as part of the security it required for making the loans, took a registered charge over a 21 acre parcel of land owned by the claimant Company and registered as Registration Section: McKinnons; Block No: 45-1595B; Parcel: 58. Other securities taken by the 2nd defendant Bank included personal guarantees from the directors to meet any shortfall and, as well, a charge over another parcel of land owned by one of the directors of the claimant Company, Lydia Bird, and registered as Registration Section: Kentish & Ottos; Block No: 69-1691C; Parcel: 272.

4 At the time of the making of the loans, the late Sir Vere Cornwall Bird was the Prime Minister of the State of Antigua and Barbuda. Lydia Bird was his wife. Mr. Lester Bird, chairman of the claimant Company, was a minister in Sir Vere's government, and after his retirement succeeded him as leader of the Antigua Labour Party and as Prime Minister of the State of Antigua and Barbuda (they are both hereinafter for convenience together referred to as “the Prime Minister”). The claimant Company was and is owned by members of the Prime Minister's family. The claimant Company owned and operated Radio ZDK, the principal radio and television station in the State at the time, and the mouthpiece of the ruling political party. Radio ZDK broadcasted its signals from an antenna and transmitter house erected on Parcel 58, the charged land. This is mentioned not to suggest that the 2nd defendant Bank owed the claimant Company, because of the status of its shareholders, any greater a duty of care than it owed its other customers. But, the fact is that the State of Antigua and Barbuda is a relatively small community. The question might arise whether anyone but the boldest would be prepared to attend at a public auction conducted by the defendants and to offer to purchase Parcel 58. If no sensible person would offer to bid for Parcel 58 at auction, a question might arise as to whether the 2nd defendant Bank had made a genuinely secured loan, or whether the loan was in reality an unsecured one. But, that is not an issue here. It was agreed by all parties and counsel at trial that the ownership of Parcel 58 had in no way affected the market value set by the valuer. It was agreed that the ownership of Parcel 58 had not negatively affected the conduct of the auction. The 1st defendant did sell the Parcel 58 at auction, and he had not been subject to any victimization in consequence. The 2nd defendant Bank has suffered no victimization as a result of its sale as Chargee of Parcel 58. Several persons had turned up on the site on the day of the auction. They had bid on the land, and the highest bidder, a Mr. George Ryan (hereinafter “Mr. Ryan”) had had the land transferred to him. There was no suggestion that Mr. Ryan had subsequently suffered any victimization as a consequence of his successful bid.

5 The land registered as Parcel 58 was 21 acres by repute. There was no survey produced in evidence, and the testimony was that the boundary marks of Parcel 58 had not been located prior to the auction. The 1st defendant testified that he had searched for them, but had not found them. The court takes notice of the fact that many registered parcels of land in Antigua and Barbuda have either never been surveyed or, if they were, proper concrete monuments either were not put down by the surveyor or have become dislodged and lost over the years. There was no suggestion that there was anything sinister in the absence of boundary monuments for Parcel 58. The issue is raised because it seems to be a matter that would affect the certainty of what was being sold, and as a consequence might have had an impact on the price that someone was willing to pay. In the absence of a proper survey, it is difficult to imagine, if a prospective purchaser had attended at the 1st defendant's office prior to the sale to enquire as to the particulars of the land, how the 1st defendant could have given them to him. Similarly, it is difficult to imagine how the auctioneer on the day of the auction could have known where to point out to the prospective purchasers the boundaries of the Parcel.

6 The extent of the indebtedness of the claimant Company to the 2nd defendant Bank was some $2,290,000.00 by 7 December 1992 when the 2nd Defendant Bank served on the claimant Company its first notice to pay off. Neither the claimant Company nor the guarantors paying off the delinquent loans as required, the 2nd defendant Bank proceeded to sell Parcel 58 at public auction through the agency of the 1st defendant on 27 May 1993. The reserve price set by the solicitors for the 2nd defendant Bank and communicated to 1st defendant just prior to the auction was EC$1,400,000.00. This was based on a valuation done by Haynes Smith on 2 April 1993. The land was knocked down at the auction held on 27 May 1993 to Mr Ryan for the sum of EC$1,600,000.00. The claimant Company questions whether this was a fair representation of the market value of the land at the time.

7 Parcel 58 had ten years previously, on 7 December 1983, been valued by George Duberry (hereinafter “Mr. Duberry”) for $1,635,133.50 (hereinafter “the Duberry Valuation”). Mr. Duberry had at the time been a certified land valuer, an assistant lands officer, and director of the Development Control Board of the Government of Antigua and Barbuda. He is presently the Chief Lands Officer in the Lands Division, in the administration of which Mr Lester Bird is presently the Prime Minister, so he is hardly an independent witness. However, his 1983 valuation was in evidence and was admitted to be the valuation which had been accepted by the 2nd defendant Bank as the basis for its having taken a charge over Parcel 58 as security for the loans. The Duberry Valuation reads as follows:

• 1. Survey/Valuation

  This survey valuation was carried out on Tuesday, 6th December, 1983.

• 2. Title

  Ownership of the above-mentioned land is vested in Granville Radio Limited.

• 3. Land

  The land is situated at an area commonly called Kinnons and lies adjacent to the McKinnons Salt Pond. The piece or parcel of land slopes slightly west in some parts while the remaining areas are relatively flat. It stands at approximately 12 ft above sea level. The natural vegetation is grass, acacia and some shrub. There is also on site a radio antenna and Transmitter house. There is a splendid view of the coast and hinterland from this site.

• 4. Services

  Electricity, telephone, water and fully paved road passes along the full frontage of this land.

• 5. Acreage

  The land according to a recent survey measures approximately 21.45 acres or 934,362.00 sq ft.

• 6. Valuation

  In keeping with the open market value of the land in this area and evidence of current sale transactions and also in view of the aforementioned factors, it is my considered opinion that a value of $1.75 per sq ft or $1,653,133.50 (EC) for 21.45 acres of land is in fact the true market value.

The above Duberry Valuation is not a very long document, but it describes the physical features of the land, the public utilities available to the land, and sets out the basis for the valuation provided. Mr. Duberry testified at the trial that in his opinion, at the time of the auction ten years later in 1993, Parcel 58 would have increased in value. It was his opinion that Parcel 58 had not been sold at its fair market price. He set out in his testimony his reasons for his belief. These included a comparison with the prices at that time for which lands in area were selling. These prices ranged from $6.67 to $9.45 per sq ft. The claimant Company called as another of its witnesses a local real estate agent, Martin La Barrie, who gave it as his opinion that Parcel 58 could have achieved a selling price of at least EC$4,500,000.00 in July 1993, and significantly more if it had been sold in lots. Mr. La Barrie is not an auctioneer and has never inspected the Parcel in question, but he is experienced in negotiating to buy and sell lands in the general area of Parcel 58. The law on the differing valuations of qualified and experienced valuers has long been settled. As Salmon LJ stated it in the Cuckmere case [infra]: “Valuation is not an exact science. Equally careful and competent valuers may differ within fairly wide limits...