Norman Aviation Flight Training Academy Inc. Claimant/Respondent v Leroy Smith Dulani Smith Defendants/Applicants [ECSC]
| Jurisdiction | Antigua and Barbuda |
| Judge | Glasgow M |
| Judgment Date | 29 April 2014 |
| Judgment citation (vLex) | [2014] ECSC J0429-2 |
| Docket Number | CLAIM NO. ANUHCV 2013 /0523 |
| Court | High Court (Antigua) |
| Date | 29 April 2014 |
EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE
(CIVIL)
CLAIM NO. ANUHCV 2013 /0523
Glasgow M(ag): The extant application is made by the defendants who are father and son (hereinafter the applicants) in which they seek an order for summary judgment in respect of the claim brought against them by the claimant (hereinafter the respondent);
The respondent operates a flight training institution for profit. By way of an agreement dated September 5, 2009 (hereinafter the agreement), the second applicant enrolled to obtain "flight and academic/ground school training". The agreement states the cost of the training at USD$68,500.00. The first applicant signed the said agreement as guarantor. The applicants also signed two promissory notes (hereinafter the notes); the first note predates the agreement being signed on August 31, 2009. The second note is dated September 5, 2009, the date of the agreement. While the obligations are the same in both notes, they list different dates for payment of the sums due for the tutelage offered to the second applicant. As is the case with the agreement, the first applicant signs as guarantor on the notes;
On August 8, 2013 the respondent filed a claim form and statement alleging breaches of both the agreement and the notes by the applicants. The respondent claims that the applicants only paid the sum of (E.C) $10,000.00 and a balance of (E.C) $174,950.00 remains outstanding;
The applicants filed a defence on October 16, 2013 in which they denied that the first applicant contracted with the respondent to provide flight training to the second applicant. The first applicant contended that he only signed the notes and he did so in the capacity of a guarantor. The applicants also plead that the notes were conditional on the respondent providing flight training to the second applicant to the value of $174,950. This was not done and as such the respondent was only entitled to the sum of $9500.00 which had already been paid. Additionally, there was no presentment or demand made to either of the applicants and as such the notes cannot be enforced against the applicants. The second applicant also makes the point that at the time of contracting, he was a minor and the agreement, not being one for necessaries, could not be enforced against him. In any event, having attained the age of majority, he specifically repudiated the agreement in the defence.
In its reply, the respondent reiterates its claim that the agreement was entered into by both parties. The respondent also rejoins that notime during the agreement was the second applicant "an infant". In respect of the notes, they were not conditional as the full payment for the course was due in advance of its commencement;
On January 13, 2014, the applicants filed the present application in which they seek an order for summary judgment on the grounds that the respondent has no real prospect of succeeding on the claim against them. Several points are raised in support of the application —
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(1) The first applicant is a guarantor of the obligations of the second applicant only. The pleadings are deficient in that there is nothing therein stating that the first applicant has been sued as guarantor or that any demand has been made of him in the capacity of guarantor;
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(2) The first applicant is not a principal party to the contract and only has signed as a guarantor;
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(3) The respondent has not made demand on the notes in accordance with the Bills of Exchange Act, Cap. 48 of the revised Laws of Antigua and Barbuda 1992 (hereinafter the Act);
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(4) At the time of contracting the second applicant was a minor, lacking full capacity to contract;
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(5) The contract for flying lessons was not one of necessity for the second applicant since he was a minor at the material time. As such it was voidable at his instance; and
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(6) The agreement, being a voidable one, the second applicant repudiated it in or about October or November 2009 and in his defence.
The respondent filed an affidavit in opposition on March 25, 2014 in which it emphasizes that the respondent does have a real prospect of succeeding on the claim. Further it is contended that minority was not in and of itself a bar to contractual liability and since the agreement was one for the benefit of the second applicant, it is valid and binding on the parties thereto;
In their submissions in support of the application, the applicants amplify their grounds and rely on the following propositions to establish that the claim has no real prospect of success –
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(1) While the statement of claim identifies the first applicant as "the father and guarantor of the second – named defendant", it does not particularize any demand made of the first applicant in his capacity as guarantor on the notes;
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(2) Nowhere is it pleaded that the notes had been presented for payment in accordance with sections 45 (d) (ii), 88 and 90 of the Act. Section 45 of the Act requires that presentment must be made on the day a bill is due, where the bill is not payable on demand. The notes in this case set out specific dates for payment and since presentment was not made on those dates and at the place appointed in the body of the notes, the drawers are discharged from the obligations therein stated pursuant to section 45 of the Act;
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(3) The second applicant was 15 years old at the date of the agreement and at the date of the notes. He was not yet an adult under the law. The applicants posit that the agreement and notes are not enforceable against the second applicant since he was a minor at the time of contracting;
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(4) The applicants argue that –
"In accordance with the principle that an infant is of immature intelligence and discretion, an infant's contracts are at common law generally voidable at the instance of the infant, though binding on the other party. Exceptions to this rule are contracts for necessaries and certain other contracts such as contracts for apprenticeship. If they are clearly for the infant's benefit; such contracts are good and binding upon an infant. Contracts which are obviously prejudicial to an infant are wholly void; thus an infant cannot contract a loan or give a penal bond and a warranty to confess a judgment given by an infant is void. An infant cannot be bound as a party to a bill of exchange even for necessities… " 1 (applicants' emphasis);
Observations fromChitty on Contracts are also recited in aid of the applicants' point. The applicants submit that –
"The only contracts which are absolutely binding on a minor are contracts for necessaries. There is, however, in the cases, a diversity of meanings given to the word "necessaries". In one sense, the term is confined to necessary goods and services supplied to the minor. In another, it extends to contracts for the minor's benefit and in particular to contracts of apprenticeship, education and service… Apart from contracts for necessaries and contracts of apprenticeship, education and service, the general rule at common law is that a minor's contracts are voidable at the minor's option, i.e not binding on the minor but binding on the other party. Of these voidable contacts there are two classes:
(a) contracts which are binding on the minor unless he repudiates them during his minority or within a reasonable time after attaining his majority; and
(b) contracts which are not binding unless and until he ratifies them after attaining his majority" 2
The applicants are of the view that the agreement was not one for the provision of necessaries. Support for the view that flying lessons are not necessaries was found in the 1930 authority ofHamilton v BennettUNKUNK (1930) 94 J.P.N 1363 in which it was found that lessons in flying for a law student was not a necessity. The applicants further contend that, in any event, the second applicant repudiated the contract after November 2009 and is
not obliged to pay more than the $9500.00 he has already paid for the training he received to the date of repudiation. Further repudiation could be found specifically in his defence to the respondent's claim, he having recently attained his majority;In respect of the notes, the applicants rely on the exposition of law inHalsbury's Laws of England that –
"An infant cannot make himself liable as either drawer, acceptor or indorser of a bill of exchange or promissory note, even if it be for necessaries supplied; but if the instrument has been drawn or indorsed by him, the holder is entitled to receive payment and to enforce the instrument as against any other party thereto."4 The law is that "an infant cannot be bound as a party to a bill of exchange even for necessaries."5
The applicants recite the relevant statutory proscription which can be found in section 22 of the Act —
22. (1) Capacity to incur a liability as a party to a bill is co-extensive with capacity to contract… Where a bill is drawn or indorsed by an infant, minor, or corporation having no capacity or power to incur liability on a bill, the drawing or indorsement entitles the holder to receive payment of the bill, and to enforce it against any other party thereto.
The applicants' position is that the second applicant is clearly not to be held liable on the notes;
In respect of the first applicant, it is submitted that his liability as guarantor on the notes is contingent on the second applicant's liability as principal. The evidence and the respondent's pleading demonstrate that the first applicant is
indeed a guarantor on the notes and he stands discharged of his obligations as such because his son was a minor at the time of contracting. In further submissions...To continue reading
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