Lacey v Zion and Sea Shells Reefs Ltd
| Jurisdiction | Antigua and Barbuda |
| Judge | Thomas, J. |
| Judgment Date | 06 February 2007 |
| Neutral Citation | AG 2007 HC 51 |
| Docket Number | ANUHCV No. 0362 of 2004 |
| Court | High Court (Antigua) |
| Date | 06 February 2007 |
High Court
Thomas, J.
ANUHCV No. 0362 of 2004
Dr. Johnny Cheltenham, Q.C. with Mrs. Neleen Murdoch for the claimant.
Mr. Anthony Astaphan, S.C. with Mr. Kendrickson Kentish for the first defendant.
Ms E. Ann Henry for the second defendant.
Contract - Terms — Agreement for sale of shares — Failure to complete — Whether terms were breached — Specific performance ordered.
On 5th March 2004 Abraham Zion of 220 Mahopac Avenue, Yorktown Heights, New York 10598 United States of America indicating that he was acting for himself and on behalf of all other shareholders of Sea Shell Reefs Limited whose names are listed in Schedule I (“the vendors”) and Graham Ferguson Lacey of Farway Suite, Fort-Island, Deroyhaven, Isle of Man, IMGIUA, United Kingdom (“the Purchaser”) signed an agreement (“the Agreement”).
The Agreement concerned the sale of shares in Sea Shell Reefs LTD [‘the company”), of which Abraham Zion was one of the shareholders. The Agreement is central to the matter before the Court and for this reason it is necessary to set it out in full detail.
“THIS AGREEMENT is made the fifth day of March 2004
BETWEEN:
ABRAHAM ZION of 220 Mahopac Avenue, Yorktown Heights, New York 10498, United States of America acting for himself and on behalf of all other shareholders of Sea Shell Reefs Limited whose names are listed in Schedule I (collectively “the Vendors”) (1) and GRAHAM FERGUSON LACEY of Fairway Suite, Fort Island, Deroyhaven, Isle of Man, IM91UA, United Kingdom (“the Purchaser”) (2)
RECITALS:
(1) Sea Shell Reefs Limited, a company incorporated under the laws and jurisdiction of Antigua & Barbuda, whose registered office is at Juris Chambers, Long Street, St. John's Antigua (“the Company”), is a private exempt company limited by shares and at the date of this Agreement has an authorised capital of EC$500 divided into 500 Ordinary shares of EC$1 each (“the Shares”) all of which will have been issued prior to Completion as fully paid or credited as fully paid and will be legally and beneficially owned by each of the Vendors in the respective numbers set out in Schedule I.
(2) The Vendors have the right to sell the Shares free from all liens, charges and other encumbrances and third party rights and each of them other than Abraham Zion has authorised Abraham Zion to enter into this Agreement on their respective behalves and all references to Abraham Zion throughout his Agreement shall mean and include all the Vendors.
(3) The Company owns the freehold title to the property briefly described in Schedule 2 (“the Property”).
(4) The Vendors have agreed to sell the Shares to the Purchaser free from all liens, charges and other encumbrances and third party rights on the terms but subject to the conditions of this Agreement.
NOW IT IS AGREED as follows:
(1) In consideration of in any event non-refundable payment of One hundred thousand United States dollars (US$100,000) to Abraham Zion simultaneously with the execution of this Agreement, the receipt of which Abraham Zion hereby acknowledges, the Vendors grant to the Purchaser the right to conduct a due diligence study of the Company and the Property for a period of 90 days expiring 3 June 2004 (“Due Diligence Period”). If during the Due Diligence Period the Purchaser in absolute discretion determines that he does not wish to proceed with this transaction and gives written notice to the Vendors to that effect then he will have forfeited the US$100,000 but will have no further obligation to the Vendors or any of them.
(2) The Vendors as legal and beneficial owners shall sell the Shares to the Purchaser who will purchase the Shares free from all liens, charges and other encumbrances and third party rights for a purchase price of Seven million five hundred thousand United States Dollars (US$7,500,000) (the “Purchase Price”) upon the terms and subject to the conditions of this Agreement.
(3) The Purchase Price will be payable in full on Completion by way of a 12-month Purchase Money Mortgage (“Purchase Money Mortgage”) denominated in United States dollars granted by the Vendors and secured over the Shares but without personal guarantee, carrying interest at the rate of 10% per annum payable monthly in advance. Completion shall take place no later than 10 June 2004.
(4) In order to facilitate the Purchaser's due diligence study the Vendors will promptly make available to the Purchaser all documents, plans, permits, concessions, correspondence and other information pertaining to the Company and the Property and will give access to all professional advisers involved with the Company and the Property.
(5) The Vendors will ensure to the satisfaction of the Purchaser that at Completion:
a. the Company will beneficially own the Property free from all liens, charges, and all other encumbrances and third party rights;
b. the Shares will be free from all liens, charges and other encumbrances and third party rights;
c. the Company will have no liabilities, contingent liabilities, adverse claims, litigation or threatened litigation against it or any outstanding taxes;
d. all documents necessary for transferring good and marketable title to the Shares to the Purchaser will have been executed by each and every one of the Vendors and all other relevant parties;
e. the requirements of the Purchaser's lawyers and bankers will have been met to enable them to satisfy themselves as to the good standing of the Company, the absence of any liabilities or contingent liabilities and the ability to deliver good and marketable title to the Shares and the Property.
(6) Without prejudice to the binding effect of this Agreement the Vendors and the Purchaser shall execute a Supplemental Agreement during the Due Diligence Period containing all the usual representations, warranties and indemnities associated with the sale and purchase of shares in a private company.
(7) Upon completion of this transaction the Purchaser will be responsible for payment of a broker's introductory fee to Jack Johnson. The Vendors warrant that there are no other introductory parties involved in the transaction.
(8) Abraham Zion represents and warrants to the Purchaser that he is duly authorised by each of the Vendors to sign this Agreement on their respective behalves.
(9) Completion will take place at the Antigua offices of the Vendors' lawyer by no later than 10 June 2004 on which occasion the Vendors shall deliver all requisite documents to give effect to the sale and purchase of the Shares in full conformity with this Agreement and procure the appointment of the Purchaser's nominees to the Board of Directors and officers of the Company in place of the present directors and officers and the Purchaser shall execute the Purchase Money Mortgage.
AS WITNESS the hands of the parties the day and year written above.
SIGNED by ABRAHAM ZION for and behalf of the Vendors in the presence of:
SIGNED by GRAHAM FERGUSON LACEY by his attorney in fact ERIC LEVINE in the presence of:”
SCHEDULE I
The Vendors
Name
Number of Shares
ABRAHAM ZION
EDITH ZION
ADINA ZION
MARK ZION
JOSHUA ZION
STEPHEN OLLENDORF
ULRICH OLLENDORF
RUPEAN BENJAMIN
SCHEDULE II
The Property
Seaforth Estates, Antigua registered at the Antigua Land Registry as follows:
Registration Section: FIVE ISLANDS, Block and Parcel No. 54 1489A 410
Registration Section: JENNINGS, BLOCK and Parcel No. 53 1488A 1
As indicted above the parties to the Agreement are Abraham Zion, acting on his own behalf and on behalf of all the other shareholders of Sea Shell Reefs Ltd and Graham Lacey.
In Recital 1 to the Agreement, the company, Sea Shell Reefs Ltd, is further identified as a company incorporated and having a registered office, in Antigua and Barbuda. It is a private company with authorised capital of EC$500 divided into 500 ordinary shares of EC$1 each — all issued prior to completion as fully paid or credited as fully paid and will be legally and beneficially owned by each of the Vendors as set out in Schedule I.
In Recital 2 it is stated that the Vendors have a right to sell the shares and that each of them has authorised Abraham Zion to enter into “this Agreement” on their respective behalves.
In Recital 3 it is stated that the company owns the freehold title to the property described in Schedule 2.
In Recital 4 it is stated that the Vendors have agreed to sell the shares to the Purchaser free from all liens, charges, and other encumbrances and third party rights on the terms but subject to the conditions in this Agreement.
Clause 1 of the Agreement provides for the payment of the sum of US$100,000 by the Purchaser to the Vendor upon the execution of the said Agreement in consideration of which the Purchaser is given the right to carry out a due diligence study of the Company for a period of ninety days — ending on 3rd June, 2004. It is the further right of the Purchaser, if he does to wish to proceed further, to give written notice to the Vendor in which case the sum paid will be forfeited without any further obligation on the part of the Purchaser.
Clause 2 places an obligation on the Vendors to sell the shares for a purchase price of US$7,500,000 upon the terms and subject to the conditions of the Agreement.
Clause 3 sets out the conditions for the payment of the purchase price with completion to take place no later than 10th June, 2004.
Clause 4 is related to the due diligence study and places an obligation on the vendor to provide certain confirmation to the Purchaser pertaining to the Company and the property plus access to all professional advisers involved with the Company and the property.
Clause 5 places further obligations on the Vendor which must be carried out to the satisfaction of the Purchaser.
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