McAllister et Al v Astra Holdings Ltd et Al

JurisdictionAntigua and Barbuda
JudgeThomas, J.
Judgment Date21 December 2004
Neutral CitationAG 2004 HC 69
Date21 December 2004
CourtHigh Court (Antigua)
Docket NumberANUHCV 0207 of 2004

High Court

Thomas, J.

ANUHCV 0207 of 2004

McAllister et al
and
Astra Holdings Limited et al
Appearances:

Ms. Eleanor Clarke for the claimants.

Ms. Veronica Thomas for the defendants.

Real property - Oral agreement for purchase of property — Claimant moved into house pursuant to agreement but failed to complete purchase — Oral agreement between claimant and second defendant for purchase of the property — Default on payments — Defendants held liable for payment of rent, to pay interest on the balance of the purchase price at 9% until completion and to pay rest of the purchase price and the claimants' costs.

Thomas, J.
1

This action arose out of an agreement between the claimants and the defendants for the purchase of the claimants property situate at Valley Church, St. Mary's.

2

The proceedings commenced by a fixed date claim filed on 10th June 2004 and supported by affidavit of even date. The claimants are seeking a number of declarations and orders. The action is brought pursuant to section 9 of the Vendor and Purchaser (Land) Act, Cap. 402.

3

The declarations sought relate to: Entitlement to payment of rent for occupation of the property; entitlement to payment of interest on the balance of the purchase price; the balance of the purchase money and the legality of the pre-payment penalties. The orders relate to: Payment of all sums found due; costs of the application.

4

In his affidavit in support, the first named claimant says that he is resident at Royal Palm Beach, Florida, USA and that he is a businessman. He says further that the property is owned by him and his wife, the second named claimant, Gyneth Ann McAllister, as tenants in common in equal shares. He says also that the property, which is furnished is valued at between US$400,000 and US$500,000 exclusive of the contents and that it is subject to a charge in the amount of EC$400,000 in favour of ACB Mortgage and Trust Company Limited (“the Mortgagee”) dated 9th July 1937 and registered in the encumbrances section of the Land Register.

5

The first-named claimant contends that the mortgage payments became delinquent and they were forced to sell the property. On this account in January 2001 an oral agreement was entered into with the second-named defendant, David George Toms, for the purchase of the property for the sum of US$350,000. It was agreed that the transaction would be completed when the defendant arrived in Antigua, which he did in February 2001. At this time, says the claimant, he moved into the property and remained in it but failed to complete the purchase.

6

The claimant says that the second-named defendant informed him that the purchase would be completed in the name of the first-named defendant. Astra Holdings. This gave rise to a written agreement with the said Astra Holdings for the purchase of the property at a price of US$350,000.

7

With the approval of the Mortgagee, David Toms agreed to take over the monthly mortgage payments and according to the claimant, he paid a total of EC$109,128.00 as at 16th March 2004. However, on account of “our dire financial circumstances”, they say that they were forced on three occasions to make interim payments to them on the balance of the purchase price. According to the claimant on each such occasion, David Toms demanded a reduction of the purchase price as a pre-payment penalty.

8

With respect to the completion of the sale the claimant says that the second-named defendant requested an extension from 1st January 2003 to 1st January 2004. This was in writing. This completion was not met and further, according to the claimant, the monthly mortgage payments were not met and no rent was paid, contrary to what was agreed. Consequently, by letter dated 26th January 2004, the Mortgagee has threatened to realise their security.

9

According to the claimant a series of letters between their respective attorneys-at-law regarding the completion of the sale, failed to bring about such completion.

10

In his affidavit in response, the second defendant acknowledges that he entered in a contract for and on behalf of the first defendant for the purchase of the property at a price of US$350,000. He also acknowledged that the completion time was extended by agreement to 1st January 2004, with an option to complete the sale at any time within the extension.

11

The second defendant also gives details of the terms of the contract including the advance payments, the payments of the monthly mortgage, and insurance payments and unrestricted access to reside at the property for the period of the option at no extra cost.

12

Details of payments towards the purchase price and monthly mortgage payments are also stated by the second defendant. However, according to the second defendant a dispute arose between the parties towards the end of January 2003 in connection with a statement account produced by him and this resulted in the balance of the purchased price not being determined. Further, that as a consequence no further payments were made towards the purchase price.

13

According to the second defendant, despite an indication to the claimants of his desire to complete the sale, no further steps were taken towards the completion of the contract.

14

The second defendant seeks a determination as to the balance of the purchase price, specific performance and costs.

15

In his affidavit in reply, the first claimant says that the defendants failed to comply with the extended completion date of 1st January 2004. As regard the matter of unrestricted access to the property at no extra cost, he explains this by saying that this was in the context of the completion date based on the contract entered into on 31st May 2001, and completion in accordance with that contract.

LEGAL CONTEXT
16

The claimants' action is brought under section 9 of the Vendor and Purchaser Act, Cap. 462. It provides that:

“A Vendor or Purchaser of real or leasehold estate in Antigua and Barbuda, or their representatives respectively, may at any time or times and from time to time apply in a summary way to a Judge in Chambers, in respect of any requisitions or objections, or any claim for compensation, or any other question arising out of, or connected with the contract (not being a question affecting the existence or validity of the contract) and the judge shall make such order upon the application as to him appear just, and shall order how and by whom, all or any of the costs of, and incident to, the application shall be borne and paid.”

17

A similar provision is contained in English legislation. It is section 49(1) of the Law of Property Act, 1925. With respect to this provision, in Halsbury's Laws of England, (4th ed.) Vol. 42 at para. 220, the jurisdiction of the Court in relation to summary order is recognised; but as to the scope of such jurisdiction it is said that:

“The procedure is not, however, intended to enable the Court to try summarily disputed question of fact, and an application under these provisions cannot be treated as if it were an action for specific performance, or for recession, or for any other purpose. It enables either party to the contract to obtain a decision upon some isolated points or points without recourse to an action for specific performance….”

18

It will be recalled that the defendants are seeking specific performance as well as other remedies. However, for the reasons stated above, given the basis of the action, specific performance cannot be sought or granted. Therefore the issues for determination in relation to the property agreed to be sold by, the claimants to the first defendant are:

1
    Whether the claimants are entitled to the payment of rent and interest on the balance of the purchase price. 2. Whether the deduction of monies from the purchase price as pre-payment penalties is illegal and void. 3. The balance of the purchase price.
ISSUE NO.1
19

Whether the claimants are entitled to the payment of the rent and interest on the balance of the purchase price.

SUBMISSIONS
20

On behalf of the claimants it is submitted that where a vendor allows a purchaser to occupy the property before completion, the vendor is entitled to a fee or rent calculated at the contract rate. It is a rule of law and there is no requirement for the parties to agree. It is further submitted that where a vendor ceases to be entitled to receive rents and profits for his own benefit he becomes entitled to interest on the unpaid purchase money until actual payment.

21

In so far as the defendants are concerned, it is submitted, as regards the matter of rent, since they were intended purchasers, they were mere licensees pursuant to a contract for sale. On that account no relationship of landlord and tenant arose and as such the issue of rent does not arise.

22

With respect to the matter of interest it is the defendants submission that while a vendor is entitled to require the purchaser to pay interest on the purchase money from the date when he takes or might safely take possession of the land, in this instance the defendants were never put in a position to take legal possession.

23

According to Halsbury's Laws of England (41h ed.) Vol. 42 at para. 188 a vendor is entitled to possession or to the receipt of rents and profits until such time as fixed for completion.

24

Contrary to the submission by the defendants, there is evidence on both sides to indicate that the defendants in this instance took possession of the property prior to completion. The question is when.

25

In his affidavit, Barry McAllister said at paragraph 6 that: “Mr. Toms arrived in Antigua in February 2001 and moved into the premises and has been in occupation ever since.” However, in cross-examination, after it was put to him that David Toms only occupied the property from November 2001, he said he disagreed.

26

David Toms in examination in chief said...

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