Rodney Zimmermann v Mackinnon Belize Land & Development Ltd, Griffin Belize Inc.
| Jurisdiction | Belize |
| Judge | Madam Justice Sonya Young |
| Judgment Date | 19 May 2022 |
| Court | Supreme Court (Belize) |
| Docket Number | CLAIM NO. 812 OF 2019 |
THE HONOURABLE Madam Justice Sonya Young
CLAIM NO. 812 OF 2019
IN THE SUPREME COURT OF BELIZE A.D., 2019
KEYWORDS: Land — Contract — Agency — Fraudulent Misrepresentation — Purported Title Owner not Title Owner in Fact — Breach of Contact — Closing Agent's Title Search Erroneous — Negligence — Negligent Misrepresentation — Contract Completed — Conveyance Registered — Conveyance Set Aside — Damages
Mrs. Ashanti Arthurs-Martin, Counsel for Claimant.
Ms. Lisette Staine, Counsel for 1 st Defendant.
Mrs. Andrea McSweeney-McKoy, Counsel for 2 nd Defendant.
Everything that could go wrong went very wrong. The Claimant owned land in the seaside village of Placencia. He desired to purchase the vacant adjacent lots as well. So, at his request, his real estate agent, Daniel Dunbar, made inquiries of James Parker, a Director of the First Defendant, as to the ownership and availability of the Lots.
He says that James Parker subsequently represented to Mr. Dunbar that the Lots were indeed available and that the First Defendant was the owner. Based on what Mr. Dunbar told the Claimant, he was induced to enter in an Offer to Purchase Agreement.
Mr. Dunbar continued to act as his broker throughout and advised the Claimant to retain the services of the Second Defendant to close the purchase, which he did.
The Second Defendant was to ensure that the Lots were free and clear of all encumbrances, then draft and file the transfer documents. The Second Defendant was paid in full for its services and advised the Claimant that the First Defendant had good, free, and unencumbered title to the Lots.
Based on the representations by both Mr. Parker and the Second Defendant, the Claimant wired the purchase price to the First Defendant. A Deed of Conveyance was signed on 21 st February 2017 and filed accordingly. The Claimant then proceeded to develop the land by filling it and constructing a concrete fence with gate.
In October 2018, he received correspondence from an attorney which indicated that he was trespassing and must remove any improvements he had made. That letter also indicated the title reference of the owners.
When searches were conducted, it was revealed that the owners were as stated in the letter, and they had acquired ownership through transfer from the First Defendant since December 2005.
The Claimant insists that the First Defendant breached their contract, and its representation as to ownership had been made either fraudulently or negligently as they knew or ought to have known that they no longer had title.
The Deed to the actual owners had been signed by James Parker, as Director of the First Defendant, who had also signed the Claimant's Deed. A reasonable and diligent search by the First Defendant would certainly have revealed that the First Defendant was no longer the registered proprietor of the Lots.
Equally, a proper search by the Second Defendant would also have revealed this. The Second Defendant was, therefore, negligent and had breached its duty of care causing the Claimant to suffer loss.
The Claimant now seeks damages for fraudulent or negligent misrepresentation as well as breach of contract against the First Defendant, and for negligence and negligent misrepresentation against the Second Defendant.
The First Defendant admits that when it entered the Offer to Purchase Agreement with the Claimant, it no longer had title to the Lots. However, it was Mr. Dunbar who had informed Mr. Parker that the First Defendant was the owner on record. And their own records did not reflect a sale to the registered proprietors.
Moreover, they had informed Mr. Dunbar that the Lots were in fact owned by Mr. Rodney Bruck with whom Mr. Dunbar subsequently began to directly communicate and negotiate the sale. The First Defendant acted solely as agent for Mr. Bruck and executed the Deed of Conveyance as such.
The closing statement was addressed to Mr. Bruck and the First Defendant and had been executed by the First Defendant, Mr. Bruck and Mr. Dunbar. In any event, the Claimant had retained the services of the Second Defendant to verify ownership of the Lots and it is really that report on which the Claimant had relied.
More importantly, a proper search by the Second Defendant would also have revealed the same. The Second Defendant was, therefore, negligent and had breached its duty of care causing the Claimant's loss.
The Second Defendant does not deny culpability but admits financial loss suffered by the Claimant of only $3,450.00 for investigation of title and legal costs. It maintains that it had been diligent and had acted reasonably and prudently in making its enquiries.
The title search was not intended to defraud, deceive nor induce the Claimant into purchasing the property. The blame for the Claimant's loss lay mainly with the First Defendant.
-
1. Whether the First Defendant made a fraudulent misrepresentation to the Claimant?
-
2. Whether the First Defendant made a negligent misrepresentation to the Claimant?
-
3. Whether the First Defendant breached the Offer to Purchase Agreement?
-
4. Whether the Second Defendant owed a duty of care to the Claimant, and if it did, did it breach its duty of care?
-
5. Whether the Second Defendant made a negligent misrepresentation to the Claimant?
-
6. Is the Claimant entitled to damages, in what quantity and should it be proportioned between the Defendants and how?
The Claimant relied on the explanation of the law of fraudulent misrepresentation as presented by Justice Jackson-Haisley of the Jamaican Supreme Court in Claim No. 2014HCV04646 at paragraph 53:
“Fraudulent Misrepresentation is referred to as the Tort of Deceit. The elements of Fraudulent Misrepresentation are set out in Derry v Peek (1889) 14 App. Cas. 337. Harrison J in the Jamaican case Bevad Limited v Omad Limited SCCA No 133/05 at page 8 of the judgment after discussing Derry v Peek synopsized the elements of the tort in these terms:
1. There must be a false representation of fact. This may be by word or conduct;
2. The representation must be made with the knowledge that it is false, that is, it must be willfully false or made in the absence of belief in its truth. Derry Peek (supra); Nocton v Lord Ashborne [1914–1915] All E.R. 45.
3. The false statement must be made with the intention that the claimant should act upon it causing him damage.
4. However, it must be shown that the claimant acted upon the false statement and sustained damage in so doing. Derry v Peek (supra.); Clarke v Dickson [1858] 6 C.B.N.S. 453; 35 Digest 18,100.”
She then sought an elaboration of what constitutes knowledge of falsity of a statement from Chitty on Contracts, 32 nd ed, Vol 1 paragraph 7-050:
“The requirement of the absence of honest belief does not, however, mean that the claimant must prove the defendant's knowledge of the falsity of the statement. It is enough to establish that the latter suspected that his statement might be inaccurate, or that he neglected to inquire into its accuracy, without proving that he actually knew it was false.” [emphasis added]
She concluded that once the primary elements of fraud have been established there is no need to establish an intention to defraud but kindly reminded that each case turns on its own facts.
On the issue of agency, Counsel highlighted the Claimant's testimony that he knew nothing of the First Defendant's purported agency. The Offer to Purchase and Conveyance were both signed by the First Defendant as seller. The name of Rodney Bruck does not appear at all. She surmised that for all intents and purposes, the First Defendant was the contracting party, and the issue of agency did not arise.
Counsel relied on Higgins and Others v Senior [1835-42] ALL ER Rep 602 and the rule stated therein that a party is bound by a written contract which they have signed. He can not be discharged from liability by proving the agreement was made with the authority of and as agent for another or that the contracting party was aware of this fact when the agreement was signed.
Moreover, the Claimant's actual or attributed knowledge of the existence of Mr. Bruck was irrelevant, since it would not affect the First Defendant's representation that it owned the Lots, which was not true and in which the First Defendant's witness, Mr. Parker, admitted Mr. Bruck played no role.
By executing the Offer to Purchase as well as the Conveyance, the First Defendant represented that it owned the Lots, they were for sale, and they were free and clear of any encumbrances.
Counsel for the Claimant also referred to an email dated 22 nd December 2016 (annex 3 of Daniel Dunbar's witness statement) in which Mr. Parker confirmed to Mr. Dunbar that Mr. Bruck did not have title in his name “I explained to him according to the paperwork he never applied for title transfer… he wants me to represent him in this as I still have the title…”
She reflected on Swift J's comment in Matthews and Smith [2008] EWHC 1128 (QB) pgs 137-139:
“A false statement made through carelessness and without reasonable grounds for believing it to be true, may be evidence of fraud, but does not necessarily amount to fraud. If it was made in the honest belief that it was true, it would not be fraudulent. It is, however, important to consider in each case whether there were reasonable grounds for the maker of the statement to believe in its truth, and also to examine the means of knowledge that were possessed by the maker of the statement at the material time. If that person shut his eyes to the...
To continue reading
Request your trial