Lydon et Al v Barnes Bay Development Ltd
| Jurisdiction | Anguilla |
| Judge | Blenman, J. |
| Judgment Date | 12 December 2010 |
| Neutral Citation | AI 2010 HC 9 |
| Date | 12 December 2010 |
| Court | High Court (Saint Christopher, Nevis And Anguilla) |
| Docket Number | AXAHCV No. 51 of 2008 |
High Court
Blenman, J.
AXAHCV No. 51 of 2008
Mr. Gerhardt Wallbank for the claimants/applicants.
Ms. Merline Barrett for the defendant/respondent.
Civil practice and procedure - Application for order for interim payment — Civil Procedure Rules, Part 17.6(1)(d).
This is an application for Interim Payment made by Thomas P. Lydon and Sharon K. Lydon against Barnes Bay Development Ltd. The application is vigorously opposed by Barnes Bay Development Ltd. (also referred to as Barnes Bay).
On 27th May 2006, Barnes Bay Development Ltd. (Barnes Bay) entered into a Purchase and Sale Agreement (hereafter “the Agreement”) with Thomas Lydon and Sharon K Lydon for the purchase of Unit No C203 of the Resort Residences at Anguilla located in Anguilla British West Indies, together with an undivided interest as tenant-in-common in all or any portion of the common area (hereafter “the Unit”).
Thomas P. Lydon and Sharon K. Lydon entered into a contract with Barnes Bay Development Ltd. to purchase property known as Unit No C203, The Resort Residence, Anguilla for the price of US$1,525,000.
By clause 2 of the Agreement the initial purchase price of the unit was subject to the provisions contained in the “Incentive Addendum”, US$1,525,000.00. Once the 10% discount was applied to the initial purchase price the purchase price of the unit was US$1,372,500.00.
The Lydons were required to, and did, pay to Stewart Title Eastern Caribbean (hereafter “the Escrow Agent”) a deposit of US$274,500.00 which is 20% of the purchase price.
By clause 3 of the Agreement, Stewart Title Eastern Caribbean was designated as the Escrow Agent. The Escrow Agent was made a party to the Agreement for the sole purpose of agreeing to act as Title Company.
On the 29th July 2008, the Lydons issued a claim against the Barnes Bay Development Ltd. in which they are seeking the refund of the deposit that they paid among other reliefs.
The Lydons say that it was an express term of the agreement that Barnes Bay Development Ltd. would provide them with the property they have purchased, in accordance with the Agreement. The Lydons state further that, in accordance with the Agreement they paid Stewart Title Eastern Caribbean a deposit of US$274,500 in part payment of the purchase price and to hold as Escrow Agent as provided by the contract.
The Lydons contend that it was an express term of the contract that Barnes Bay Development Ltd. would provide them with property that was ready for occupancy on or about May 2008. This was the closing date. The Agreement provided for the closing date to be extended but this never occurred. Barnes Bay is therefore in breach of the Agreement.
The closing date has long passed and they are yet to receive the property on which they have paid a deposit of US$274,000.00.
Alternatively, the Lydons have argued that even if the court were to come to conclusion that the closing date was capable and validly extended by Barnes Bay Development Ltd., then the extension was to December 2008 and this date has long passed. They were therefore able and properly in a position to terminate the Agreement.
Against that background, they have applied for interim payment pursuant to Part 17.6(1)(d) of CPR 2000 which provides that: “The court may make an order for an interim payment if it is satisfied that, if the claim went to trial, the applicant would obtain judgment against the defendant for a substantial amount of money or for costs”.
Barnes Bay Development Ltd. denies that it is in breach of the Agreement. It maintains that the closing date as defined in the Agreement has not yet been fixed and therefore has not yet passed.
Further, Barnes Bay Development Ltd. says the date of May 2008 was the date that it was anticipated that the closing will occur. However, the Lydons knew or intended that the closing date was liable to be extended on account of delays due to labour problems, as occurred. These labour strikes were provided for in the 3 Agreement and were out of its control. These are matters that affected the date of the closing which date was for May 2008.
Barnes Bay Development Ltd. says that its failure to convey title to the unit by May 2008 does not and cannot amount to a breach of contract since May 2008 was not the closing date as defined by the Agreement. Barnes Bay Development Ltd. states that it validly extended the closing dates through several letters that it wrote to the Lydons. They extended the closing date to December 2008.
Barnes Bay Development Ltd. says that all deposits under the Agreement were to be paid to the Escrow Agent, the latter who was required to pay same to the party entitled. In accordance with the Agreement, the deposit due and payable at the date of the Agreement was to be immediately released to Barnes Bay Development Ltd.
The closing date was lawfully extended, in the circumstances that obtained and the Lydons were not entitled to do as they did namely: terminate the Agreement.
There was no failure to provide the property ready for occupancy by the closing date. Accordingly, the Lydons are not entitled to a return of their deposit.
Barnes Bay Development Ltd. has counterclaimed against the Lydons. It says that the Agreement remains in full force and effect and that the Lydons' action in seeking to terminate the Agreement is wrongful and amounts to an anticipatory breach of the Agreement by the Lydons.
One of their contentions is that the closing date was lawfully extended to December 2008 and it is the Lydons who have breached it by terminating it. They are therefore not entitled to any sums claimed.
The court should not grant them the interim payment sought or any at all.
Learned Counsel Mr. Wallbank urged the court to make an interim payment to the Lydons. Part 17.6(1)(d) of CPR 2000 gives the court the discretion to order an interim payment of US$274,000.00.
Mr. Wallbank stated that the sum of US$274,500.00 is a reasonable proportion of the likely amount of the final judgment. The Lydons in the Statement of Claim makes three claims (a) the return of the deposit of US$274,500.00 (b) Interest at 18% per annum from 22nd May 2006 (which amounts to an excess of US$105,453.12 and costs. Part 17.6 (1)(d) enables the court to take into account a prospective judgment for costs. Mr. Wallbank stated that if the Lydons were to succeed at trial in relation to the return of the deposit the prescribed costs would be in the sum of EC$83,395.55.
Learned Counsel Mr. Wallbank reminded the court that it is empowered to make an interim payment order in a non personal injuries case if it is satisfied that, if the claim were to go to trial, the claimant would obtain judgment against the defendant from whom an order for interim payment is sought for a substantial amount of monies or costs.
Having said that, Learned Counsel Mr. Wallbank then proceeded on an elaborate review of the relevant clauses of the Agreement, in an effort to persuade the court that the application at Bar is an appropriate one in which the court should exercise its discretion. Much time was spent in trying to persuade the court as to the meaning that should be given to clause 4(a) of the Agreement:
“As of the date of this Agreement, the seller intends that the closing date shall occur on or about May 2008, subject to delay beyond the reasonable control of seller which would constitute impossibility of performance under Anguillan Law”.
In addition, Learned Counsel Mr. Wallbank reviewed several of the elaborate clauses of the Agreement in support of his contention that the closing date of the Agreement had long passed and therefore Barnes Bay Development Ltd. was in breach of the Agreement.
Mr. Wallbank referred the court to Simes: A practical approach to Civil Procedure in which it is stated that: “orders are likely to be made in claims where it appears that the claimant will achieve at least some success and where it would be unjust to delay, until after the trial, payment of money to which the claimant appears to be entitled. The purpose behind this procedure is to alleviate the hardship that may otherwise be suffered by claimants who may have to wait substantial periods of time before they recover any damages in respect of the wrongs they may have suffered”.
In Shearson Lehman Bros Inc and others v. Maclaine Watson & Co Ltd. [1987] 2 All E.R. 181 at 190 Nicholls, L.J. in the English Court of Appeal stated that:
“The underlying purpose of the two (interim payment) rules is the same: to mitigate hardship or prejudice to a defendant which may exist during the period from the commencement of the action to the trial. Further the underlying task of the court under each rule is the same: ordering an interim payment of such amount as is just, having regarded to all the circumstances.”
Learned Counsel Mr. Wallbank opined that the legal issues in the substantive case can be readily determined on the affidavit evidence provided in the matter. There is no need for there to be a full trial.
Importantly, the matter can be determined on the basis of simply interpreting the Agreement. If the court were to have a close look at the Agreement it would readily conclude that Barnes Bay Development Ltd. is in breach of the Agreement. In those circumstances, the Lydons should be able to recover their deposit without having to go to the trouble and expense of recovering it through legal trial.
Mr. Wallbank therefore advocated that the court ought to exercise its discretion and order the interim payment applied for by the Lydons.
Learned Counsel Ms. Barrett stated that order for interim remedies is the...
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