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THE REPUBLIC OF TRINIDAD AND TOBAGO

IN THE HIGH COURT OF JUSTICE

CV 2012-02269

Between

DONRIDGE HEIGHTS LIMITED

Claimant

AND

GREENFIELD PROPERTIES LIMITED

1st Defendant

FREDERICK DONOWA

2nd

Defendant

VIGILIA BERNARD

3rd

Defendant

NEVILLE DONOWA

4th

Defendant

MARIA DONOWA

5th

Defendant

BEFORE THE HONOURABLE MR. JUSTICE PETER A.RAJKUMAR

APPEARANCES:

Ms. Asha Watkins-Montserin instructed by Ms. Jacqueline Chang for the Claimant

Mr. Navindra Ramnanan for the 2nd, 3rd and 5th Defendants

Mr. Joseph Sookdeo instructed by Mr. Lemuel Murphy for the 4th Defendant

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TABLE OF CONTENTS PAGE

BACKGROUND 3

ISSUES 4

o Whether the Actions of the First Defendant were as Agent of

the 2nd

to 5th

Defendants so as to be binding on them 4

o Whether the Development Agreement was in fact an agreement for the sale

of land to the first defendant by the second to fifth defendants 5

o Whether, under the Development Agreement, the first defendant had actual authority

to act on behalf of the second to fifth defendants in selling the 12 lots to the claimant

under the 2008 Sales agreements or whether the scope of the first defendant’s

authority was limited to sale of developed land only 7

o Whether the first defendant had apparent authority or appeared to be authorized,

or was held out as being authorized, to act as agent of the 2nd

to 5th

defendants

in selling lots under the 2008 Sales Agreements which had not yet been developed 8

ORDERS 10

ANALYSISAND REASONING 11

Law 11

The Documentary Evidence 13

Development Agreement dated 19th

May 2006 13

Sale Agreement dated 9th

June 2008 14

The 2006 Agreement 15

FINDINGS 19

CONCLUSIONS 22

ORDERS 23

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JUDGMENT

BACKGROUND

1. The second to the fifth named defendants are the children of Marion Donowa, who

passed away on September 23rd

1999, seised of a 70 acre parcel of land at St. Rose Estate,

Maraval, leaving portions of that parcel to them by will. (12 acres to Frederick, 10 acres to

Vigilia, 10 acres to Neville, and 12 acres to Maria.)

2. On 24th

January 2003, probate of her will was granted to Maria and Vigilia.

3. The second to fifth named defendants wanted to sell the land but had been unsuccessful

in so doing. They eventually entered into an agreement with the first named defendant dated 19th

May 2006, (the Development Agreement). Under that agreement the first named defendant was

to develop a 30 acre portion of the land and sell developed property to third party purchasers.

4. On 9th

June 2008 – the first named defendant entered into written agreements (the

written sale agreements) with the claimant for the sale of 7 lots, and on 29th

October 2008

entered into an oral agreement to sell a further 5 lots – together the 2008 Sale Agreements).

5. Under the 2008 Sale Agreements the claimant paid to the first defendant sums as follows-

i. 26th

May 2008 - $2,057,770.00

ii. 27th

October 2008 - $130,000.00

iii. 29th

October 2008 -$140,000.00

iv. 29th

October 2008 - $130,000.00

6. The first defendant was to develop these lots on or before December 31st 2009, which

period could have been extended by a further 9 months in the event of, for example, delay in

obtaining permissions for executing the infrastructural work.

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7. In fact the lots were not developed in accordance with the Sale Agreements and the

claimant sought the return of the monies it had paid.

8. It instituted action against the first named defendant as Developer, and also against the

second to the fifth named defendants, claiming that the Developer, in entering into the 2008 sale

agreements, was acting with their actual authority as their agent, or was held out as having

apparent authority from them, either rendering them liable for his default and breach of contract.

9. Under the written 2008 Sale Agreements – (clause 7) - the claimant was entitled to a

refund of monies paid with interest at the rate of 12% per annum.

10. Claimant claims that the Defendants owe the Claimant the total sums it paid to date to the

1st Defendant in addition to 12% contractual interest on the sums of $2,057,770.00 and

$400,000.00.

ISSUES

Whether the Actions of the First Defendant were as Agent of the 2nd

to 5th

Defendants so as

to be binding on them

11. The first defendant did not participate in the trial and default judgement was sought

against it. The second to fifth defendants deny that the first defendant, in entering into the 2008

Sale Agreements with the claimant, acted as their agent.

12. The fourth defendant was separately represented. Neville Donowa’s contention was that

the first defendant had no authority to sell land which had not been developed because the first

defendant’s authority under the 2006 agreement was to sell developed land only.

13. Maria Donowa on behalf of defendants two, three and five, contended that the first

defendant was not their agent at all, as the Development Agreement was actually an agreement

for the sale of land to him. Thereafter his dealings with it were for his own account.

14. It is essential therefore to analyse the Development Agreement to ascertain:-

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a. Whether, as contended, the Development Agreement was in fact an agreement for the

sale of land to the first defendant by the second to fifth defendants, and/or;

b. Whether, under the Development Agreement, the first defendant had actual authority to

act on behalf of the second to fifth defendants in selling the 12 lots to the claimant under

the 2008 Sales Agreements, or whether the scope of the first defendant’s authority was

limited to sale of developed land only, and/or;

c. Whether the first defendant had apparent authority or appeared to be authorized, or was

held out as being authorized, to act as agent of the 2nd

to 5th

defendants in selling lots

under the 2008 Sales Agreements.

Whether the Development Agreement was in fact an agreement for the sale of land to the

first defendant by the second to fifth defendants

15. It was contended that:

a. the 2006 agreement, under which they were to receive a payment representing the value of

the undeveloped land, together with 55 % of the net profit after deducting costs of

development, was a Sale Agreement to the developer. A conveyance of the land to him

had not been executed so as to remove the need for upfront payment of stamp duty, as in

any event the lots were to be transferred on sale to third parties after they were developed;

b. that they had been paid sums of $250,000.00 each;

c. that as the first defendant executed the written 2008 Sale Agreements with the claimant as

beneficial owner, this established or evidenced that the prior 2006 development

agreement was one for the sale of the land to the first defendant; and

d. accordingly the developer could not have been acting as their agent as they had simply sold

the land to him, and he was the beneficial owner, acting on his own behalf in subsequently

selling lots to the claimant.

16. This argument is curious, and takes the second to fifth claimants no further. The assertion

that the development agreement was actually an agreement for the sale of the land to the

developer /first defendant, who was not therefore their agent, carries with it the risk of not

permitting them to resist the Claimant’s claim for specific performance of the sales agreements

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against the first defendant. This follows if in fact they had agreed to divest themselves of the

entire parcel to the first defendant, even without having received payment in full for it.

17. If, as they contend, the land had been sold to the developer, but they had not been paid in

full for it, then the claimant would be entitled to claim as it does, against the first named

defendant, the developer, for specific performance of the sale agreements for the 12 lots it had

purchased. The second to fifth defendants, no longer being the owners of the land, could hardly

resist that claim, even though they had not been paid in full for the land. As the land was not

developed and there is no evidence of subdivision with planning approvals, this would present

practical difficulties if ordered.

18. On the other hand they would, if successful on this scenario, be in a position to contend that

the first defendant, having purchased their land, could not be their agent. If the first defendant

were in breach of the 2008 Sale Agreements with the claimant, the claimant could not claim

against these defendants for recovery of its monies paid to the developer, as the developer would

not be their agent.

19. In fact this distinction, raised as an afterthought for the purpose of a defence to the claim of

the claimant, was simply not an issue beforehand.

20. The 2006 agreement did not transfer the interest of the second to fifth defendants in the

land to the developer. The contention that he could not be their agent under the 2006 agreement

because he had actually become the owner or beneficial owner of the land, and was therefore

acting entirely on his own behalf in selling lots therefrom, is therefore simply not sustainable.

More so as this argument involves accepting that the defendants 2 to 5, actually had agreed to

divest themselves of their interest in 30 acres of land while receiving only $1 million dollars of

an unascertained price of the undeveloped land. (The land had not been valued in its

undeveloped state. It appears that the further payments to them, contemplated under the

Development Agreement, for the value of the land in its undeveloped state, plus profits when

developed, had not been made).

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21. It is not clear whether attorneys for the defendants, in seeking to evade liability to the

claimant, appreciate that the effect of their argument taken to its illogical conclusion could be:-

a. that the defendants two to five could be divested of their right title and interest in the entire 30

acres of land, with the first defendant becoming the beneficial owner thereof, despite their not

having been paid in full for it, and

b. that the claimant could seek to enforce against first named defendant in default of defence, the

claimant’s claim to specific enforcement of its agreements for sale of 12 lots of that land.

Whether, under the Development Agreement, the first defendant had actual authority to

act on behalf of the second to fifth defendants in selling the 12 lots to the claimant under

the 2008 Sales agreements or whether the scope of the first defendant’s authority was

limited to sale of developed land only

22. The agreements for sale in 2008 contemplated that the land would be developed by

December 31 2009, or if not, by a period extended therefrom by a further 9 months.

23. If the developer had complied with its obligations under the sale agreements then he would

have been selling developed land, and been unquestionably acting within a scope of authority

expressly conferred by the 2006 agreement.

24. However even if he sold undeveloped land I find that this was not, and could not, have

been a surprise to the second to fifth defendants. They were aware that the developer did not

have enough money to purchase the land from them outright. They were aware that their share in

the profits of the developed land would only come after the land had been developed. It must

have been within their contemplation that the developer, who did not have enough money to buy

the land outright, may have had to resort to selling lots to finance development works.

25. Maria in fact acknowledges that the developer’s financing would depend on when he got a

sale, that he did not have the money to purchase the lands prior to embarking upon the

development project , and that he would pay them when he got income from selling the property.

– see paragraphs 7, 8, and 9 of her witness statement.

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26. It is doubtful whether he had actually exceeded his authority by selling then undeveloped

lots, as he was in fact selling lots that were, under the Sales agreements, to have been developed

by December 31st 2009. This was clearly within the scope of the Development Agreement as the

lots being sold and paid for were not lots that were to remain undeveloped. They were in fact

sold as lots shortly to be developed- lots under, or in the process of, development. The fact that

the Developer was fortunate enough to have secured a sale of those lots before the development

and infrastructural works had been completed certainly does not mean that the Developer

exceeded his authority. The Development Agreement expressly conferred authority on him to

develop the Owners’ land with a view to its sale. He was to finance the development. Under the

Sales Agreements he received payment for lots of the owners’ land in anticipation of, and in

advance of the development.

27. I find that the Developer did not exceed his authority in selling undeveloped lots as:

a. it was contemplated that the lots would have been developed by the time of completion of sale;

b. the second and fifth defendants did not object. They were primarily concerned to receive

payment for their land;

c. Sale of lots, developed or not, was one mechanism that could reasonably have been, and

actually was, contemplated for financing the development project;

d. the Developer was clearly acting on his own behalf and on behalf of the second to fifth

defendants in taking steps under the 2006 agreement that would have enabled him to further the

development and arrange financing of the development for their joint benefit;

Whether the first defendant had apparent authority or appeared to be authorized, or was

held out as being authorized, to act as agent of the 2nd

to 5th

defendants in selling lots under

the 2008 Sales Agreements which had not yet been developed

28. The fact is that the first defendant would not have been in a position to obtain millions of

dollars from the claimant were it not for the fact that the second to fifth defendants cloaked him

with the authority to deal with and even to dispose of portions of their land.

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29. Even if they became aware of the agreements for sale after the fact, it is undisputed that

they did so become aware.

30. There is no evidence that they at any time objected to the agreements for sale, or

complained that the developer could not have entered into those agreements because they were

of undeveloped land as opposed to developed land, even when some of them were present at

meetings subsequently at which the fact of sales to the claimant must have been raised.

31. Whatever the reason for the developer selling lots, they raised no objection to the fact that

undeveloped lots were being sold. They attended meetings and there is no evidence that this was

a concern expressed by any of them, (save that the 4th

defendant says that he attended no

meetings with the claimant and he was unaware).

32. The effect of this was that the developer was held out as having apparent authority to sell

the lots to the claimant:-

a. By the development agreement – which though it authorized him to sell developed lots , did

NOT restrict him to selling only developed lots

b. By the defendants simply not raising this as an issue at their meetings with the claimant.

Even if they only attended such meetings after the 2008 agreement had been executed they

must have been aware that 12 lots from their land had been sold. Yet they made no

objection, implicitly ratifying the authority of the developer to enter into those agreements,

even if he had initially exceeded his authority.

33. The defendants wanted money from the sale of their land. In fact, most curiously, they

even claim to have been under the impression that the 2006 agreement had been for the sale of

their land, all 30 acres of it. This however ignores the fact that under that agreement they

continued to have responsibilities to the developer. For example, they were to provide him with

legal instruments as necessary, and even to assist in perfecting their title, which at that point was

sufficiently imperfect to have hampered sales to third parties.

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34. The presence of any of the defendants at meetings with the claimant and the developer in

such a scenario where they had divested themselves of ownership of the land is not reasonably

explicable solely on the basis that these defendants simply wanted the rest of their money.

35. The discussion at such meetings centered around giving control of the development of the

land to the claimant. Obviously the second to fifth defendants were recognized as retaining

sufficient control over the land as to have a role to play in that proposal.

36. They cannot claim that they knew nothing, saw nothing, and are responsible for nothing,

when it was the Development agreement, under which they took the benefit of payment that

empowered the first defendant to purport to sell land to the claimant.

37. Without that agreement, which was for the joint benefit of all the defendants, the claimant

would not have parted with its funds.

38. The first defendant was their agent in developing the lands as they had an interest in the

profits from the developed lands over and above the value of the land in its undeveloped state.

Their rights responsibilities, obligations and benefits, did not end upon their executing the 2006

agreement. In fact they were, for example, under a duty to execute transfers to purchasers of

developed lots and all other necessary legal documents required by the developer.

39. I find that the second to fifth defendants clothed the developer with apparent authority to

sell their land, and subsequently effectively ratified, by the presence of some of the owners at

meetings with the Claimant, any possible exceeding of that authority by the developer’s sale of

undeveloped lots.

ORDERS

40. The Defendants are to pay to the Claimant:

a. Damages for breach of contract in the sum of $2,057,770.00.

b. Damages for breach of contract in the sum of $400,000.00.

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c. Contractual interest on the sum of $2,057,770.00 calculated at a rate of 12% per

annum from May 26th

2008 to October 31st 2014.

d. Contractual interest in the sum of $400,000.00 at the rate of 12% per annum from

October 29th

2008 to October 31st 2014.

e. Costs on the basis prescribed by the Civil Proceedings Rules for a claim in the total of

the above amounts.

ANALYSIS AND REASONING

LAW

The effect of Actual Authority

41. Halsbury Laws of England 5th

ed Volume 1

“125. Rights and liabilities of principal

As a general rule, any contract made by an agent with the authority of his principal may

be enforced by or against the principal where his name or existence was disclosed to

the other contracting party at the time when the contract was made.

Apparent (or ostensible) authority

42. Bowstead on Agency 18th

Edition at pages 335-336 at paragraph 8-013 states:-

“Where a person, by words or conduct, represents or permits it to be represented that

another person has authority to act on his behalf, he is bound by the acts of that other

person with respect to anyone dealing with him as agent on the faith of any such

representation, to the same extent as if such other person had the authority that he was

represented to have, even though he had no actual authority”.

43. In Freeman and Lockyer v Buckhurst Park Properties (Magnal) Ltd [1964] 2 QB

480 at 502-503:-

“It is necessary at the outset to distinguish between an "actual" authority of an agent on

the one hand, and an "apparent" or "ostensible" authority on the other. Actual authority

and apparent authority are quite independent of one another. Generally they co-exist and

coincide, but either may exist without the other and their respective scopes may be

different. As I shall endeavour to show, it is upon the apparent authority of the agent that

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the contractor normally relies in the ordinary course of business when entering into

contracts.

An "actual" authority is a legal relationship between principal and agent created by a

consensual agreement to which they alone are parties. Its scope is to be ascertained by

applying ordinary principles of construction of contracts, including any proper

implications from the express words used, the usages of the trade, or the course of

business between the parties. To this agreement the contractor is a stranger; he may be

totally ignorant of the existence of any authority on the part of the agent. Nevertheless, if

the agent does enter into a contract pursuant to the "actual" authority, it does create

contractual rights and liabilities between the principal and the contractor……

An "apparent" or "ostensible" authority, on the other hand, is a legal relationship

between the principal and the contractor created by a representation, made by the

principal to the contractor, intended to be and in fact acted upon by the contractor, that

the agent has authority to enter on behalf of the principal into a contract of a kind within

the scope of the "apparent" authority, so as to render the principal liable to perform any

obligations imposed upon him by such contract. To the relationship so created the agent

is a stranger. He need not be (although he generally is) aware of the existence of the

representation but he must not purport to make the agreement as principal himself. The

representation, when acted upon by the contractor by entering into a contract with the

agent, operates as an estoppel, preventing the principal from asserting that he is not

bound by the contract. It is irrelevant whether the agent had actual authority to enter

into the contract.

In ordinary business dealings the contractor at the time of entering into the contract can

in the nature of things hardly ever rely on the "actual" authority of the agent. His

information as to the authority must be derived either from the principal or from the

agent or from both, for they alone know what the agent's actual authority is. All that the

contractor can know is what they tell him, which may or may not be true. In the

ultimate analysis he relies either upon the representation of the principal, that is,

apparent authority, or upon the representation of the agent, that is, warranty of

authority.”

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44. In Hely-Hutchinson v Brayhead Ltd. and Another [1967] 3 All ER 98 at 104, Lord

Wilberforce considered Diplock LJ's judgment in Freeman & Lockyer v Buckhurst Park

Properties (Mangal) Ltd ([1964] 1 All ER at p 647, [1964] 2 QB at p 502.

45. In Bowstead on Agency 18th

Edition at page 337 paragraph 8-017 it is stated:-

“There must be a representation, or in Restatement, Third terms a manifestation. This

seems to occur in three main ways. It may be express (whether orally or in writing); or

implied from a course of dealing; or it may be made by permitting the agent to act in

some way in the conduct of the principal’s business with other persons.”

THE DOCUMENTARY EVIDENCE

Development Agreement dated 19th

May, 2006

46. Clause 1 of the Agreement is as follows:

“1. a) In August 2005, The Owners negotiated with the Developer, to develop 30 acres

more or less…

Clause 2 (a) states that “the Owners shall make the property available to the developer

for development”.

47. By Sub-clauses (d) – (f) The First Defendant was required to:-

i. secure financing for the execution of the entire project

ii. execute the development works for phase 1

iii. manage, market and enter into sale agreements with willing purchasers for the developed

property in respect of Phase 1.

48. Clause 4 (Compensation for the Owners) provides as follows:

“A sum of money equivalent to the market value of the land in its present undeveloped

condition

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55% of all net profits realized from the sale of the developed property after all costs

associated with the development and sales have been accounted for and deducted and the

accounts have been certified by qualified independent accountant …”

Sale Agreement dated 9th

June, 2008

49. This Agreement is as follows:

“The Vendor, being a development company, has entered into an agreement with the

legal owners of the parcel of land described in the First Schedule hereto (hereinafter

called “the Development Property”) to develop the Development Property into

residential and institutional building lots as a leasehold building scheme and to enter

into sale agreements with willing purchasers and under the terms of the said agreement

the owners have agreed to execute the required deeds and instruments to demise

leasehold interest of the lots to the purchasers. The Purchaser has had sight of this

agreement and is aware of its contents.” (emphasis added)

50. At clause D:

“The Vendor also proposes to incorporate a company (hereinafter called “the

Company”) to act as a service company for the Development Property providing the

services set out in Schedule 4 of the Draft Lease (hereto attached and marked “A” and

signed by the parties hereto for the purpose of identification) and the Vendor will cause

the Owners to convey the freehold reversion in the Development Property to the

Company after leases in respect of all the lots have been granted.”

51. Clauses 5 and 7 are as follows:

“5. The Vendor shall complete or procure the completion of the Infrastructural Works

on or before the 31st day of December 2009 which date may be extended by a period of

nine months for any delay caused by reason of…

7. If for any reason whatsoever the date for the completion of the Infrastructural Works

specified in clause (8) above is extended for any period expiring more than nine (9)

months after such date the Purchaser shall have the option to determine this Agreement

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upon giving the Vendor fourteen (14) days notice in writing to that effect whereupon all

monies paid by the Purchaser to the Vendor shall be refunded and repaid to the

Purchaser by the Vendor with interest at the rate of twelve per cent (12%) per annum

from the date of payment thereof by the Purchaser until final repayment to the

Purchaser.”

52. No infrastructural works had been completed by December 31st 2009 or by September

30th

2010.

The 2006 agreement

53. The 2006 agreement lacks the detail and specificity that would be expected in an

agreement where millions of dollars in value was at stake. Nevertheless its structure is clear.

a. The second to fifth defendants were to be paid for the land - the value of the land in its

undeveloped state, plus 55% of the further profits realized by the development and

subdivision of the land.

b. The second to fifth defendants would seek inter alia, to obtain the necessary

documentation of their title, and would participate in conveyances to third party

purchasers of developed lots.

c. The developer bore the responsibilities for financing the development, making payments

to the second to the fifth named defendants for the value of the land, and finding third

party purchasers for the developed lots.

d. Nowhere in the agreement does it stipulate that the second to the fifth defendants divested

themselves of such title that they may have had or may have come to possess, or that they

transferred ownership to the first defendant developer. The development agreement refers

to a development, developers and a project.

e. Further the agreement was clear that the land was to be developed, but was not specific

as to how the development was to be financed.

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f. The fifth defendant acknowledged that the developer was not in a position to pay them in

full for the land. She asserted that that was one of the reasons why, although beneficial

ownership allegedly passed to him under the 2006 agreement, there was no conveyance

to him.

g. In fact the development agreement does not make it clear that beneficial ownership

was ever transferred to the developer.

54. The 1st Defendant was liable to pay a fixed ascertainable price for the purchase of the

land as set out in the development agreement under the heading “Compensation for the Owners”.

This was the base sale price of the undeveloped land plus 55 % of the net profit after the land

was developed.

55. The agreement was clearly not simply an agreement for the sale of the land. It was a

business arrangement under which the second to fifth defendants would be paid for their land

and would eventually benefit from the enhanced price that lots would realise when the land was

developed.

56. They were not strangers to the agreement - they knew that the land would be sold onto

third parties when developed. In fact it is clear that they also condoned and ratified the sale of

then undeveloped lots to the claimant, in anticipation of such eventual development.

57. The lots sold to the claimant were not sold without their knowledge. The presence of

some of the owners at meetings with the claimant, whether before or after the sale of land to the

claimant, would have led a reasonable purchaser like the claimant,

a) to form the view that they approved of or accepted the sale, and

b) that they recognised the authority of the first defendant to effect the sales to the claimant,

even of undeveloped land.

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58. The sale of undeveloped land, particularly as it was anticipated in the written sales

agreement that the land would be developed within a defined time frame, was merely an

extension of the authority that they had expressly conferred on the first defendant to sell

developed land.

59. There is no reason to doubt the claimant when it testifies that the second to fifth

defendants – (except for the fourth), were present at meetings where the sale of land to it had

been discussed, as:-

a) the fact of ownership by those defendants was adverted to in the 2008 agreement,

(Clauses a and d), and ,

b) the 2006 development agreement was also expressly referred to in that 2008 agreement.

60. The claimant therefore had very good reason to involve the owners in any discussions

that became necessary as a result of delay in the first defendant’s development of the land, more

so as the issue had been raised that it may have been the result of the inaction on the part of the

owners that the approvals for the development of the land were being delayed.

61. It is not necessary to address whether that was or was not the case. It is simply one more

reason why it is more plausible than not that the owners would have been at meetings with the

claimant at which they would clearly have become aware that the claimant had purchased lots of

the land from the first defendant and had paid significant sums for those lots.

62. At no time did any one of the owners protest that the first defendant did not have their

authority to do so.

63. Their attendance at such meetings, or any meetings, far less meetings where the

discussions involved appointing the claimant as developer in place of the first defendant, is

completely inconsistent with their having divested themselves of ownership of the land to the

first defendant.

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64. Clearly they still had a level of control via their ownership of the land and this was

recognised by all concerned – the claimant – the first defendant and the second to fifth

defendants themselves – (except for the fourth who claims not to have attended any of those

meetings and to have been kept out of the picture once he had signed the Development

Agreement). The fact, however, is that he did sign the development agreement.

65. The second to fifth defendants could not:-

a. permit the first defendant to deal with their land,

b. permit the first defendant to collect money from its sale,

c. expect to benefit from that money

i. by being paid from it directly ,or

ii. by having it used for the development and enhancement of their land, from

which they were to derive profit, and

d. make no protest that he was not authorised to do so,

yet then deny liability when the first defendant did not perform his obligations under the

agreement with the purchaser claimant despite receiving over $2 million..

66. In agreeing to develop the land the first defendant was clearly acting on his own behalf as

well as on behalf of the second to fifth defendants, for the benefit of all the defendants –

including the fourth defendant who had signed the development agreement. His sale of the

land to the claimant was predicated on that agreement to develop the land, and that agreement

and obligation is referenced in the agreement for sale of lots to the claimant.

67. It is beyond dispute that the owners, the second to fifth defendants, were fully aware of

that 2006 agreement which they all signed. By that agreement they:-

a) expressly authorised the first defendant to sell developed lots of their land, and

b) expressly authorised him to develop lots of that land.

68. The existence of that agreement enabled him to sell lots of land to third parties in

anticipation of the development works on the land being completed within a defined time frame,

and, on that basis, accept money in advance of the development works being completed.

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69. There is no express restriction on the first defendant’s selling undeveloped lots. Without

express and specific wording in the 2006 agreement it is not possible to construe it as divesting

the right, title, or claim to an interest in or ownership of the land, of the second to fifth

defendants especially to the first defendant, who never paid in full the amounts that he contracted

to pay under the 2006 agreement.

70. Neither is it possible to construe it as divesting the 2nd

to 5th defendants of all

responsibility to third party purchasers who purchased on the basis of the representation in the

2006 development agreement that:-

a. the owners had authorized the developer to develop their land

b. the owners had authorized the developer to sell lots in the proposed development.

FINDINGS

71.

a. Whether the second to fifth defendants or any of them were present at meetings

between the claimant and the first defendant.

The fourth defendant claims that he was never present at any meetings between the

claimant and the first defendant.

Maria claims that though she was present at at least one meeting between the claimant

and the developer, she was not a party to any agreements between them.

The claimant claims that Frederick was present at meetings between the claimant and the

developer. Frederick was not in a suitable mental or physical condition to testify at trial

and therefore was not in a position to refute that he was present.

The Claimant’s witness explained that Frederick Donowa was present when the

money was paid by the Claimant to Greenfield.

The Claimant’s witness stated that between July and September, 2009, the Claimant had

several meetings with Howard John of Greenfield, its C.E.O. and representatives of the

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Donowas, mainly the Second Named Defendant Frederick, three times with the Fifth

Named Defendant, Maria , once with the Third Named Defendant Vigilia, and never with

the Fourth Named Defendant, Neville.

It is not disputed that Maria and Frederick were present at such meetings. Maria admits

being present at at least one. I accept the claimant’s evidence that Frederick was present

at several such meetings. I am prepared to accept the evidence that Neville was not

present at any such meeting, and that Vigilia may have been present at at least one such

meeting.

I find however that even if they were not all present at all, or even if they were not

present at any such meetings, they had signed the Development agreement, and it was

the existence of that agreement and its terms which empowered and authorized the First

named defendant to sell the lots as he did to the Claimant.

b. Whether they were aware of the agreements for the sale of 12 lots to the claimant.

I find it makes little difference whether they knew of the Sale Agreements at the time

they were entered into, or only subsequently became aware of them.

The fact is that the presence of some of the Defendants at meetings thereafter, makes it

far more likely than not, on a balance of probabilities, that they did come to know of

those sale agreements, and none of them protested that those agreements were beyond

the scope of the authority of the First defendant.

Their evidence is that, one and all, their concern was receiving payments. The only way

they could receive payments was if the land was being sold. Whether developed,

undeveloped, or while under development, it simply did not matter to them at the time.

c. Whether they objected to the sale of the then undeveloped lots to the claimant by the

first defendant.

They do not claim to have done so and I find that they did not.

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d. Whether they or any of them received monies from the sale of the lots to the

claimant.

I find that it does not really matter, as monies from the sale of land, even if not passed

directly to the second to fifth defendants, was to be used to develop the land under the

Development agreement, and therefore benefit them indirectly. As the owners were to

receive 55 % of the net profits from the developed land, under the development

agreement they were to benefit from any monies paid by the Claimant.

On a balance of probabilities however, it is more likely than not that the money that was

distributed to the Second to the Fifth defendants actually came from the sale of lots to the

claimant. The suggestion that attorney’s letter made it clear that they had been paid much

earlier, in accordance with the terms of what was supposed to be the payment schedule in

the Development agreement, is not sufficient to find that this was what actually

happened.

The reality was that the First defendant could not pay for the land as Maria admits, unless

he secured sales of portions of the land, or secured financing. There is no evidence that he

secured any such financing, or given the state of title of the land, was even in a position

to do so. (In fact Neville’s evidence is that the lands were not vested in them, even

though the beneficiaries all signed the development agreement) it is therefore likely that

the defendant / owners actually received payment, either wholly or partially, when the

Claimant paid the First defendant.

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CONCLUSIONS

72.

i. The 2006 agreement did not transfer the interest of the second to fifth defendants in

the land to the developer. The contention that he could not be their agent under the

2006 agreement because he had actually become the owner or beneficial owner of the

land, and was therefore acting entirely on his own behalf in selling lots therefrom, is

therefore simply not sustainable.

ii. I find that the Developer acted within his actual authority and did not exceed his

actual authority in selling undeveloped lots as:

a. it was contemplated that the lots would have been developed by the time of

completion of sale;

b. the second and fifth defendants did not object. They were primarily concerned to

receive payment for their land;

c. Sale of lots, developed or not, was one mechanism that could reasonably have

been, and actually was, contemplated for financing the development project;

d. the developer was clearly acting on his own behalf and on behalf of the second to

fifth defendants in taking steps under the 2006 agreement that would have enabled

him to further the development and arrange financing of the development for their

joint benefit;

iii. I find that the second to fifth defendants clothed the developer with apparent authority

to sell their land, and subsequently effectively ratified, by the presence of some of the

owners at meetings with the Claimant, any possible exceeding of that authority by the

developer’s sale of undeveloped lots.

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ORDERS

73. The Defendants are to pay to the Claimant

i. Damages for breach of contract in the sum of $2,057,770.00.

ii. Damages for breach of contract in the sum of $400,000.00.

iii. Contractual interest on the sum of $2,057,770.00 calculated at a rate of 12% per

annum from May 26th

2008 to October 31st 2014.

iv. Contractual interest in the sum of $400,000.00 at the rate of 12% per annum from

October 29th

2008 to October 31st 2014.

v. Costs on the basis prescribed by the Civil Proceedings Rules for a claim in the total of

the above amounts.

Dated the 31st day of October, 2014

Peter A. Rajkumar

Judge.