Ramsbury Properties Ltd v Ocean View Construction Ltd

• Jurisdiction: Saint Kitts and Nevis
• Judge: Mr. Davidson Kelvin Baptiste,Mr. Mario Michel,Mr. Louise Esther Blenman
• Judgment Date: 29 January 2019
• Judgment citation (vLex): [2019] ECSC J0129-1
• Docket Number: SKBHCVAP2011/0020
• Year: 2019
• Court: Court of Appeal (Saint Kitts and Nevis)
• Date: 29 January 2019

[2019] ECSC J0129-1

EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Before:

The Hon. Mr. Davidson Kelvin Baptiste Justice of Appeal

The Hon. Mr. Louise Esther Blenman Justice of Appeal

The Hon. Mr. Mario Michel Justice of Appeal

SKBHCVAP2011/0020

Between:

Ramsbury Properties Limited

Appellant

and

Ocean View Construction Limited

Respondent

Appearances:

Ms. Emily Prentice-Blackett for the Appellant

Ms. Rochelle Duncan for the Respondent

Civil appeal — Breach of lease agreement — Whether learned judge erred in principle by failing to deal with cause of action pleaded — Specific performance — Summary termination — Whether Court should interfere with findings of fact of trial judge — Whether oral agreement made — Parol evidence rule — Implied terms — Whether learned judge erred in implying terms into agreement — Repudiatory breach — Whether appellant repudiated agreement — Damages — Whether appellant entitled to compensatory damages and special damages

The appellant, Ramsbury Properties Limited (“Ramsbury”), entered into a lease agreement with the respondent, Ocean View Construction Limited (“Ocean View”) for the provision of accommodation for workers in premises owned by Ramsbury. The lease was executed on 18 ^th June 2009 and was for a period of seven months at a monthly rental of US$56,000.00. The workers went into accommodation of the demised premises on or about 20 ^th June 2009. Ocean View wrote Ramsbury informing of its intention to vacate the premises on 17 ^th July 2009, complaining that the workers were denied quiet enjoyment of the property in contravention of the lease agreement. Ramsbury rejected that it had breached the agreement and warned that it would treat a termination of the lease as a breach of contract entitling it to damages.

The workers vacated the premises and Ramsbury instituted legal proceedings, claiming, inter alia, specific performance of the lease agreement, and damages for breach of contract in the sum of US$280,000.00 in lieu of specific performance. Ramsbury contended that it had not breached the lease agreement as the lease specified “sleeping accommodation only for 250 workers” and that there was no agreement for the workers to cook and eat on the premises. In response Ocean View alleged, inter alia, that the agreement was subject to both oral and written terms. In addition to the terms of the written lease agreement, the parties agreed that Ramsbury would provide pitch tent facilities with tables and chairs where the workers could have their meals, and for Ramsbury to install appropriate laundry facilities for the workers. Ocean View argued that Ramsbury breached the agreement by failing to carry out any of those obligations.

The learned judge held that Ramsbury had repudiated a fundamental term of the lease and was not entitled to the orders it sought, as it was unreasonable for Ramsbury to insist that the lease provided for sleeping only and excluded consuming any food on the demised premises.

Ramsbury, being dissatisfied with the learned judge's decision, appealed. Ramsbury's grounds of appeal raise the following issues: (i) whether the learned judge erred in principle by failing to order specific performance and by failing to deal with the issue of summary termination; (ii) whether the learned judge erred in finding that there was an oral agreement; (iii) whether it was proper for the learned judge to imply terms into the written lease agreement and then find that Ramsbury repudiated the agreement upon application of the implied terms; (iv) whether the learned judge erred in finding that Ramsbury repudiated the lease agreement; (v) whether Ramsbury is entitled to compensatory damages, if it is found that Ocean View repudiated the contract; and (vi) whether Ramsbury was entitled to special damages relating to the re-fitting of the building to accommodate Ocean View's workers.

Held: dismissing the appeal; awarding prescribed costs to the appellant in the court below and two-thirds on appeal, that:

• 1. Specific performance is not a cause of action but is an equitable remedy to a cause of action for breach of contract. Therefore, the trial judge's finding that Ramsbury breached the agreement between the parties, necessarily disengages specific performance and puts that remedy outwith its purview. It follows that Ramsbury would not be entitled to specific performance.

• 2. The judge's findings as to Ramsbury's breach indicate a rejection of its claim that Ocean View summarily terminated the agreement. One party to a contract may, by reason of the other's breach, be entitled to treat himself as discharged from liability. In a case where a party by his conduct considers himself no longer bound to perform his part of the contract, the other party may accept the repudiation and bring the contract to an end. Therefore, Ocean View treated itself as discharged from the agreement by virtue of Ramsbury's breach.

  Co-operative Insurance Society Ltd v Argyll Stores Holdings Ltd. [1997] UKHL 17 applied.

• 3. The parol evidence rule states that where a contract is made wholly in writing, evidence is not admissible to add to, vary or contradict the written terms except, for instance, where evidence is admissible to show that the writing was not intended to be the entire contract between the parties. The learned judge evaluated the evidence and explained how he arrived at the finding that there was an oral agreement. It was therefore open to the learned judge on the evidence so to find. It cannot be said that the learned judge was clearly wrong in his findings or reached a conclusion he was not entitled to reach.

  Gillespie Bros. & Co v Cheney, Eggar & Co. (1896) 2 QB 59 applied.

• 4. A term would be implied into a contract only if, on an objective assessment of the terms of the contract, the term to be implied was necessary to give the contract business efficacy or was so obvious that it went without saying. In this case, the lease agreement would lack practical coherence without the implied terms, in that the workers would not be able to perform activities that encompass a necessary part of daily living. The relevant implied terms are a natural corollary of living in the demised premises. Therefore, it cannot be said that the learned judge erred in implying terms into the lease agreement.

  Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd. [2015] UKSC 72 applied; Nasir Ali v Petroleum Company of Trinidad and Tobago [2017] UKPC 2 applied; Chartbrook Ltd. v Persimmon Homes Ltd. [2009] 1 AC 1101 applied; Arnold v Britton [2015] UKSC 36 applied; Holliday v Overton (1852) 14 Beav. 467 applied; Mackenzie v Duke of Devonshire [1896] AC 440. applied; Ex p. Dawes, Re Moon (1886) 17 QBD 275 applied.

• 5. To constitute repudiation, the threatened breach must be such as to deprive the injured party of a substantial part of the benefit to which he is entitled under the contract. The learned judge was correct to find that eating is such a vital aspect of one's existence, that to insist that the workers were not allowed to eat on the demised premises constituted a fundamental departure from an implied term of the lease. Ocean View was deprived of a substantial part of the benefit of the lease to which it was entitled. It would be unfair in the circumstances to hold it to the lease and leave it to a remedy in damages. Damages would not be an adequate remedy taking into account the nature and the circumstances of the breach. It was therefore open to the judge to find that Ramsbury had repudiated a fundamental term of the lease agreement.

  Hong Kong Fir Shipping Co. Limited v Kawasaki Kisen Kaisha Limited [1962] 2 QB 26 applied; Decro-Wall International SA v Practitioners in Marketing Ltd. [1971] 1 WLR 361 applied; Telford Homes (Creekside) Limited v Ampurius Nu Homes Holding Limited [2013] EWCA Civ 577 considered; Federal Commerce Ltd v Molena Alpha Inc (The “Nanfri”) [1979] AC 757 considered; Latvian Shipping Company and Others v Stocznia Gdanska SA v [2002] EWCA Civ 889 applied.

• 6. Special damages must be properly pleaded, particularised and proved. While Ramsbury pleaded and particularised its special damages, it failed to prove the loss suffered. After evaluating the evidence, the learned judge concluded that the assertion that Ramsbury spent the sum claimed as special damages on renovations is untrue. It has not been shown that the judge was clearly wrong or reached a conclusion which he was not entitled to reach on the evidence. In the circumstances, the judge did not err in rejecting the claim for special damages.

Baptiste JA

1 This is an appeal against the order of Redhead J [Ag.] dismissing a claim for specific performance and damages brought by Ramsbury Properties Limited (“Ramsbury”) against Ocean View Construction Limited (“Ocean View”). The appeal has its genesis in a dispute between Ramsbury and Ocean View with respect to a lease agreement they entered into to provide accommodation for 250 Mexican migrant workers in premises owned by Ramsbury. The workers were engaged in the reconstruction of the Four Seasons resort in Nevis which had been severely damaged in a hurricane. The lease was executed on 18 ^th June 2009 and was for a period of seven months at a monthly rental of US$56,000.00. The workers went into accommodation of the demised premises on or about 20 ^th June 2009. Central to the dispute was whether the workers were permitted to have their meals and launder their clothes on the premises.

2 On 13 ^th July 2009, Ocean View's solicitors wrote Ramsbury informing of its intention to vacate the premises on 17 ^th July 2009. Ocean View complained that the workers were denied quiet enjoyment of the property in contravention of the lease agreement. Since taking possession, they have been forbidden from cooking and eating on the rented premises; the air condition is inadequate and no provision...