Placencia Bay Development Ltd v Rochon

• Jurisdiction: Belize
• Judge: Shanks, J.
• Judgment Date: 18 February 2000
• Court: High Court (Belize)
• Docket Number: 381 of 1994
• Date: 18 February 2000

High Court

Shanks, J.

381 of 1994

Placencia Bay Development Ltd.

and

Rochon

Appearances:

Mr. E. Andrew Marshalleck for the plaintiff.

Mr. Fred Lumor for the defendant.

Contract - Agreement for the sale of land — Delay in completion on part of both vendor and purchaser — Plaintiff claimed compensation under clause nine of the agreement for an alleged material misdescription — Whether the plaintiff was entitled to damages for delay in completion — Whether the plaintiff was entitled to tender the whole balance of the purchase price notwithstanding their claim for compensation for the misdescription — Finding that the plaintiffs were not entitled to claim damages for delay in completion from the defendant since at the date set for completion the plaintiffs refused to pay the full balance of the purchase price until their claim for compensation was settled and this expressed an intention not to be bound by the contract — Finding that clause nine of the contract gave the purchaser a right to be paid once compensation had been assessed but it did not allow the purchaser to hold up on completion.

Shanks, J.

1 This is a claim for damages for delay in completing on a contract for the sale of land at Placencia. The contract was dated 25 June, 1993. Under it, the defendant agreed to sell the plaintiff a lot “comprising 26.961 acres… being the parcel of land granted by Governor's Fiat Grant No.8 of 1908… which is more particularly drawn and described on a Plan of Survey by John Hertular [produced in 1992]”. Unfortunately, as later emerged, the parcel of land granted by the Governor's Fiat (which was the root of title) was only about 20 acres and did not include an additional six or seven acres of mangrove swamp to its West which was shown on Mr. Hertular's plan. This land was in fact owned by the Government. The purchase price in the contract was $680,000 (of which $68,000 was paid on execution of the agreement as a deposit) and completion was to take place at most 60 days after the agreement. The contract also contained this important provision at clause 9: “The Property is believed and shall be taken to be correctly described and no error omission or misdescription of the property shall invalidate this contract but the same shall if it materially effects the description of the properly be the subject of compensation to be paid or received by the Vendor… to be assessed in case the parties differ by a single arbitrator …”

Clause 10 provided that “…completion of the purchase by delivery of the deed and payment of the balance of the purchase money [“purchase money” was defined as BZE $680,000] shall be on or before [24 August, 1993]… time being of the essence thereof.”

2 On 24 August, 1993 Mrs. Rochon attended at Barrow & Co.'s offices to complete. Mr. Denys Barrow, who is a director of and shareholder in the plaintiff company, and was also acting as its attorney, indicated that the plaintiff would not be able to complete on that day because it had not completed its financing arrangements with Scotiabank. Mr. Barrows evidence was that Mrs. Rochon then agreed on an extension of the date for completion to 30 September. However, he was unable to recall precisely by whom and when this was agreed and there was nothing in writing about it. Mrs. Rochon and her agent Mr. Flowers were both adamant they had not agreed an extension and I find that although Mrs. Rochon clearly waived any right to terminate the contract for failure to complete by the company, there was no agreement on a new I completion date. I do not think very much turns on this.

3 At the beginning of September approval for a loan was given by the Bank to the Company. However, at about the same time the Bank's lawyers discovered the problem with the Hertular's survey plan which I have already mentioned. On 8 September, 1993 Mr. Barrow wrote to Mrs. Rochon's attorneys stating that the plaintiffs were ready to complete but also stating that in consequence of the misdescription of the parcel of land “…. we require the Vendor to allow us by way of compensation such reduction from the purchase price as may be agreed or determined by an arbitrator…” The letter continued:

“After the amount of the said deduction shall have been determined as aforesaid, we shall tender a conveyance in the usual form for execution and shall then be ready to pay the balance of the purchase money less such deduction. As a first step to agreeing upon the amount of deduction, please let us have your client's suggestion as to amount.”

4 Mrs. Rochon did not reply to that letter but she did apply to the Ministry of Natural Resources to purchase the six acres. Her application came to the notice of the plaintiffs who opposed it on the ground that it was irregular for a foreigner to be allowed to purchase land for the purpose of selling it on to a Belizean. The Ministry turned down Mrs. Rochon's application on 20 September, 1993. An application to purchase the six acres was made by the plaintiffs and granted on 14 October, 1993 and the price ($6,961, or $1,000 per acre) was paid on 10 November, 1993. Meanwhile, Mr. Barrow wrote to Mrs. Rochon's lawyer on 30 September, 1993 proposing a reduction in purchase price of $176,296 and stating that if the plaintiff had not heard back by 4 October 1993 they would proceed to arbitration. A formal arbitration notice was issued on 5 October 1993. On about 19 October, 1993 the plaintiffs took out an originating summons to appoint an arbitrator. Mrs. Rochon's Belizean agent, Mr. Flowers, would not accept service of that summons and an order for substituted service had to be obtained. Around this time Mr. Barrow had a conversation with Mr. Derek Courtenay (who was now acting for Mrs. Rochon) in which he proposed that completion go ahead with payment in full by the plaintiff company but with part of the purchase price being held in escrow pending the outcome of events. This extremely sensible proposal apparently found no favour with Mrs.Rochon who steadfastly maintained that she did have title to 26 acres and not just 20 acres, in spite of the fact that she had already tried to purchase the additional six acres.

5 There was then a slight change of tack by the plaintiff. Mr. Barrow told me that he realised that the defendant was refusing to concede even that there had been a misdescription or that she was not able to convey 26 acres of land. He therefore formed the view that it was necessary to resolve this issue and a vendor and purchaser summons was taken out in early December 1993 for a declaration that Mrs. Rochon had not shown good title. Although she had applied unsuccessfully to purchase the six acres from the Government, Mrs. Rochon acting no doubt on advice continued to refuse to accept that she had title only to 20 acres...