Golfview Development Ltd Appellant/First Defendant v St. Kitts Development Corporation Respondent/Claimant Michael Simanic Second Defendant [ECSC]

• Jurisdiction: Saint Kitts and Nevis
• Judge: RAWLINS, J.A.,Justice of Appeal,Chief Justice [Ag.],Hugh A. Rawlins,Brian Alleyne, SC,Michael Gordon, QC
• Judgment Date: 20 June 2007
• Judgment citation (vLex): [2007] ECSC J0620-3
• Court: Court of Appeal (Saint Kitts and Nevis)
• Docket Number: CIVIL APPEAL NO.17 OF 2004
• Date: 20 June 2007

[2007] ECSC J0620-3

IN THE COURT OF APPEAL

Before:

The Hon. Mr. Brian Alleyne, SC Chief Justice [Ag.]

The Hon. Mr. Michael Gordon, QC Justice of Appeal

The Hon. Mr. Hugh A. Rawlins Justice of Appeal

CIVIL APPEAL NO.17 OF 2004

Between:

Golfview Development Limited

Appellant/First Defendant

and

St. Kitts Development Corporation

Respondent/Claimant

and

Michael Simanic

Second Defendant

Appearances:

Mr. Anthony Astaphan, SC, with him Mr. Sylvester Anthony for the Appellant

Mr. Frank Walwyn, with him Mr. Fitzroy Eddy for the Respondent

RAWLINS, J.A.

1 This is an appeal by Golfview against an aspect of a judgment in which Baptists J dismissed a claim that the respondent Corporation brought against Golfview for injunctive relief and specific performance of a contract between Golfview and the Corporation for the sale of condominium units in Golfview's Development project. The Corporation also claimed relief for unjustenrichment. Golfview had repudiated the contract, retained sums which the Corporation advanced towards the project and counterclaimed against the Corporation seeking damages for breach by the Corporation.

2 The learned trial judge found that the Corporation breached the agreement by failing to close on a due date. The judge dismissed the Corporation's claim for specific performance and awarded damages and costs to Golfview on the counterclaim for the Corporation's breach. However, the learned judge ordered Golfview to return US$700,000.00 to the Corporation with 5% interest per annum from June 2000 until final payment. In arriving at this decision, the judge held that Golfview was not entitled to retain this money because it was unconscionable to do so. The judge found that the total sum which the Corporation advanced was not a reasonable deposit since it was 35% of the eventual full purchase price for the condominiums. Golfview appealed against this order.

3 The learned trial judge awarded the Corporation 25% of its costs. He dismissed the Corporation's claim against Michael Simanic with costs. The Corporation cross-appealed against these decisions.

4 Golfview's appeal is on the following grounds:

• (1) The trial judge erred in finding as a matter of fact that the claimant Corporation advanced the sum of US$700,000 as payment towards the purchase price of the condominium units, when there was no evidence adduced to support such a finding.

• (2) The trial judge erred in law in granting relief from forfeiture in the sum of US$700,000 having regard to the fact that the US$700,000 consisted partly of deposits and partly of purchase monies.

• (3) The trial judge erred in law in finding that it was inequitable and unconscionable for Golfview to retain the US$700,000 having regard to the fact that part of the total comprised a deposit.

Golfview seeks an order setting aside that aspect of the order against which it appeals; an order against the costs awarded to the Corporation and an order that the Corporation should pay the costs in the appeal.

5 The grounds on which the Corporation cross-appealed are:

• (1) The trial judge erred in law and in fact in finding that the claimant Corporation advanced the sum of US$700,000 as its investment toward the purchase price of the condominium units when the evidence was clear that the total of the Corporation's investment in cash and materials was US$840,000.

• (2) The trial Judge erred in law and in fact in awarding interest at 5% per annum on the sum which he ordered Golfview to pay to the Corporation when the evidence was clear that the borrowing rate was 14.5% per annum.

• (3) The Judge erred in law by failing to appreciate that the Claimant pleaded in the alternative and having succeeded in the alternative claim was entitled to full costs as opposed to 25% of its costs, as ordered.

• (4) The trial Judge erred in law in ordering an assessment of the 1^st Defendant's damages when the trial was not bifurcated and the 1^st Defendant did not prove damages at the trial.

• (5) The learned Judge erred in law in awarding costs to the 1^st Defendant when the said 1^st Defendant did not prove any damages at trial.

The Corporation sought an order directing Golfview to pay US$840,000.00 to the Corporation with interest at the rate of 14.5% per annum, from June 2000 until payment. The Corporation also sought an order setting aside the award of damages for breach of contract and costs in favour of Golfview in the Court below, and an order for costs in their favour in the appeal and in the Court below.

6 Since an aspect of the appeal and cross-appeal seeks to impeach fact-finding, the issues in this appeal will be considered against a detailed background. First,

Background

7 Golfview and the Corporation entered into a written agreement on 1^st October 1997. In that agreement, the Corporation agreed to purchase 24 semi-detached condominium units from Golfview. The agreement was subsequently amended on four occasions as problems in the financing and the building of the units arose.

8 Under the October 1997 Agreement, the Corporation agreed to purchase the 24 units at a purchase price of US$145,000.00 per unit subject to adjustments for upgrades. The total purchase price was stated as US$3,480,000.00. The Corporation agreed to forward cash deposits for the purchase of the units in the amount of US$50,000.00 on or before September 29, 1997 and US$400,000.00 on or before 10^th November 1997. The development was to be completed by May or June of 1998. The Corporation was also responsible for purchasing materials valued at CDN$744,000.00 towards the construction of the units. This obligation was referred to as purchaser's construction expenses. These monies were to be applied towards the purchase price of the specified units and the amount outstanding on the purchase price of the units was to be reduced in relation to the materials purchased.

9 The Corporation agreed to have on deposit with a lawyer, in trust for the Golfview Estates Development, the entire amount of funds required to pay for thepurchaser's construction expenses on or before 15^th December 1997. Alternatively, the Corporation agreed to provide a letter of credit for the equivalent amount in favour of Golfview. These funds were to be drawn down to pay for the purchaser's construction expenses. The agreement further provided that all cash deposits advanced by the Corporation to Golfview were to be secured by a charge/mortgage against the 24 units. The agreement was executed on behalf of the Corporation by Vincent Ursini, Jack Scivoletto and Tony Andretti. Mr. Simanic signed on his own behalf.

10 The Corporation alleged that its business discussions in 1997 with respect to the construction of the condominium units were with Golfview and Mr. Simanic. The claim also alleged that Mr. Simanic was a director, directing mind and chief executive officer of Golfview, who at all material times was the personal guarantor of all money advanced by the Corporation to Golfview. According to the claim, the personal guarantee was to be released and discharged when the amount of the advances were officially registered as a charge against the 24 lots. Golfview and Mr. Simanic undertook to develop the property, to construct the units for the benefit and in the best interest of the Corporation, and, ultimately, to transfer the units to the Corporation.

11 The Corporation defaulted on the payment of the cash deposits that were to be paid before 10^th November 1997. The Corporation had only paid a cash deposit of US$50,000.00 and had failed to deposit the CAN$744,000.00 in trust with a lawyer or to provide a letter of credit for the equivalent amount. The parties amended the original agreement on 26^th November 1997 to remedy the Corporation's default. By the first amendment, the amount of the deposit that was to be paid in cash was varied to allow the Corporation to put forward the equivalent in materials and services as agreed by both the Corporation and Golfview. The requirement that the Corporation would provide a trust deposit and/or a letter of credit in respect of the CAN$744,000.00 for the purchase of construction materials was deleted from the agreement. The agreement stated that the US$450,000.00 deposit would be paid in monthly installments of US$50,000.00 commencing in November 1997. However, it was expressly stipulated that the total sum was to be paid by 28^th February 1998. The parties agreed that the charge against the lots would be registered at the time of the amendment in the amount of cash and material paid for by the Corporation. The amendment was executed by Mr. Simanic on behalf of Golfview and Jack Scivoletto and Vincent Ursini on behalf of the Corporation.

12 The Corporation again defaulted. The Corporation failed to make the required cash payments by 28^th February 1998 or to provide the requisite construction materials. Golfview again accommodated the Corporation by a second amendment on 16^th March 1998. This amendment confirmed the description of the 24 units which the Corporation would purchase. It confirmed that of the US$450,000.00 deposit which was to be paid by the Corporation pursuant to the original agreement, the unpaid balance as at 12^th March 1998 was US$179,000.00. The amendment established a payment schedule for the balance. The last payment became due on 15^th April 1998. The value of the Corporation's construction expenses was confirmed in the sum provided for in the original agreement. However, the parties agreed that the Corporation would deliver materials in "partial quantities" and in accordance with Golfview's requests. Additionally, the Corporation agreed to make monthly cash advances of US$35,000.00 beginning 15^th May 1998 to 15^th December 1998, expressly to assist in funding the construction of the 24 units. It was also expressly stated that the additional cash advances would substitute the same amount in construction...