Flynagen Ltd v Corozal Free Zone Development Ltd

• Jurisdiction: Belize
• Judge: Shanks, J.
• Judgment Date: 24 January 2000
• Court: High Court (Belize)
• Docket Number: 223 of 1997
• Date: 24 January 2000

High Court

Shanks, J.

223 of 1997

Flynagen Limited

and

Corozal Free Zone Development Limited

Real property - Agreement for the sale of land — Variation of agreement — Respondent failed to comply with repayment schedule in new agreement — Applicant vendor treated agreement as terminated — Respondent lodged caution — Specific performance — Whether the contract for sale of land had been validly terminated by the applicant — Whether the respondent was entitled to specify performance of the agreement — Finding that the applicant was not in breach of contract by failing to deliver title on the stipulated date, therefore there was no breach for the respondent to rely on to entitle them to withhold payments under the schedule — Finding that the applicants were entitled to and did validly terminate the agreement — Specific performance refused.

Appearances:

Mr. Denys Barrow, S.C. and Mr. Andrew Marshalleck for the applicant.

Mr. Michael Young, S.C. for the respondent.

Shanks, J.

1 This is a re-hearing of an Originating Summons ordered to be retried by the Court of Appeal on the 5th of February, 1999. By their summons, the applicant, Flynagen Limited claims a Declaration that the contract for the sale of Parcel 353, Block 1, Santa Elena Registration Section by the applicant to the respondent contained in written Agreements dated 21st February, 1995 and 17th May, 1995 has been validly rescinded and is void and of no effect. There is also a counterclaim by the Respondent counterclaiming for various things including a declaration that the applicant was in breach of the Agreement for the purchase of parcel 353 by failing to take steps necessary transfer title, claiming an Order for specific performance of the Agreement or Damages; claiming a declaration that the provision for the forfeiture of deposits are in the nature of a penalty and claiming alternatively to specific performance of the whole that the respondent is entitled to have specific performance of a 7 acre portion of parcel 353 and claiming further and other relief.

2 The evidence I have is an affidavit of Mr. John Burks, of the applicant dated 7th May, 1997, an affidavit of Mr. Arnold of the respondent dated the 1st of September, 1997, a further affidavit of Mr. Burks of the 4th of September, 1997 and an affidavit of Jeremy Courtenay of the 9th of September, 1997. I have also had written and oral submissions from Mr. Barrow and Mr. Marshalleck for the applicant and Mr. Young for the respondent who have been extremely helpful including on a number of factual points and on the procedures in relation to Land Registration and Division of parcels of lands.

3 The facts are these. The applicant owned a parcel 314 in Block 1 of Santa Elena Registration Section which was approximately 50 acres. They agreed sell 36 acres of that Parcel to the respondent and an agreement was made between them dated 21st of February, 1995 and I will quote the relevant bits. The price was $250,000.00 U.S. A deposit of $25,000.00 was paid in the first instance and the balance being $225,000.00 U.S. was to be paid 120 days after the signing of the agreement, that is the 21st of February, 1995 and completion was to take place at the offices of W.H. Courtenay and Co. on the date on which the balance was due, that is 120 days after the signing of the agreement. The purchaser was given license to enter the land to effect a subdivision of the parcel 314 into two parcels one of 36 acres and the other of 14 acres. The purchaser was, under Clause 5(3) to use its best efforts to conclude arrangements with someone called Godfrey Blades for his use and occupation of a portion of the 36 acres in such a manner as not to interfere with their use and then the important Clauses are first Clause 7 which is as follows: “(1) In case the purchaser shall fail to pay any of the deposit or balance of the purchase price as set forth in Clause 2(1) hereof within fourteen (14) days after the day upon which the same shall become due the whole of the balance of the purchase price money then remaining unpaid shall become immediately payable and the title of the vendor to the property shall become free from all equities in favour of the purchaser the vendor retaining by way of liquidated damages for such default the deposit paid by the Purchaser under the provisions hereof. (2) Should the purchaser have paid any portion of the balance of the purchase price it shall be refunded such sum. “And then in Clause 8, there is provision for the service of a notice by the Purchaser “should the Vendor fail to perform any act;” giving him 7 days to comply with the agreement and Clause 8(2) says. “Should the Vendor fail to comply with such notice the Agreement shall become null and void and all rights of the Vendor shall cease and determine but without prejudice to any right or remedy available to the Purchaser in respect of the Vendor's breach of contract.” And then Clause 9 requires legal fees and stamp duty to be paid by the Purchaser.

4 On the 9th of March, 1995, the Purchaser had a survey carried out with a to subdivision but he then had problems with raising the balance of the money for the 36 acres plot and so the parties made a new Agreement dated 17th May, 1995. That Agreement recited that the Purchaser had requested the Vendor to accept a revised payment schedule which is set out in the second schedule of the Agreement. Clause 1 states, “The Purchaser will pay to the Vendor Two Hundred and Twenty-five thousand Dollars ($225,000.00) in the currency of the United States of America being the balance of the Purchase price for the Property and an additional Thirty thousand Dollars ($30,000.00) in the currency of the United States of America in accordance with the payment schedule contained in the Second Schedule hereto and will transfer the two properties described in the Third Schedule (those are Parcels 325 326) in consideration of the Agreement of the Vendor to accept payment of the monies due hereunder in accordance with the payment schedule and in consideration of the Agreement to the Vendor to transfer title to the Purchaser upon the execution hereof.” Clause 2 provides that the Purchaser agrees that so soon as title to the Property shall be vested in it the Purchaser will deposit its land certificate for the Property with the Vendor to the intent that the freehold property to which the same relates may be equitably charged to secure payment of the amounts listed the Second Schedule and Clause 3 says that, “The Purchaser covenants not to otherwise charge or encumber the Property without the written consent of the Purchaser.” Clause 7 provided that, “(1) The Vendor hereby agrees that upon the Purchaser's obtaining the approval of the Land Subdivision and Utilization Authority pursuant to section 3 of the Land Utilization Act, for the further subdivision of the Property it will at the cost of the Purchaser release from the said charge that portion thereof containing seven acres situate on the shore of the Four Mile Lagoon which is outlined in the blue on the attached map. (2) The Vendor and the Purchaser further agree that should the title document for the said seven acre portion come into the possession of the Vendor, it will deliver the said document to Mark Wingler and shall be discharged by the Purchaser from all liability for so doing.” Those seven acres which were at some point to be released to the respondent or to Mark Wingler were to be used, it is common ground, by the respondent to raise money but the time scale within which the respondent would obtain title to...