Jada Construction Caribbean Ltd v The Landing Ltd

• Jurisdiction: St Lucia
• Judge: RAWLINS, C.J.,Hugh A. Rawlins,Ola Mae Edwards,Davidson Kelvin Baptiste,Chief Justice,Justice of Appeal
• Judgment Date: 08 March 2011
• Judgment citation (vLex): [2011] ECSC J0308-1
• Date: 08 March 2011
• Court: Court of Appeal (Saint Lucia)
• Docket Number: HCVAP 2009/011

[2011] ECSC J0308-1

IN THE COURT OF APPEAL

Before:

The Hon. Mr. Hugh A. Rawlins Chief Justice

The Hon. Mde. Ola Mae Edwards Justice of Appeal

The Hon. Mr. Davidson Kelvin Baptiste Justice of Appeal

HCVAP 2009/011

Between

Jada Construction Caribbean Limited

Appellant

and

The Landing Limited

Respondent

Undertaking guaranteeing damages which may arise from arbitration or court order — undertaking secured by judicial hypothec on 9 parcels of condominium development — order varied to secure the undertaking on 3 alternative parcels — allegation that counsel represented from the bar that the 3 alternative parcels were good for securing the guarantee — conditional support in letter from a valuer — whether the varied order should be set aside

The respondent, the Landing Limited ("the Landing") engaged the appellant, Jada Construction Caribbean Ltd. ("Jada") to manage certain construction works in a hotel and condominium development. Their agreement was terminated and their ensuing dispute was referred to arbitration under the arbitration clause therein. In court proceedings, Jada obtained orders by which the court eventually ordered the Landing to enter into a guarantee in the sum of US$2 million secured on their property for any damages which Jada might be awarded in the arbitration or court proceedings. In an order of 1^st April 2009, a high court Judge directed the registrar of lands to enter an inhibition on the Land Register against 3 parcels in the condominium development which the Landing offered as security for the guarantee. These were Block 1257B parcels 182/v/63, parcel 182/v/66 and parcel 182/v/67 (parcels 63, 66 and 67"). The judge ordered the removal of the restriction that was earlier placed on 9 other parcels in the said development.

Jada appealed on the ground that in making the order, the judge relied upon evidence which then legal counsel for the Landing gave from the bar, without oath, and a valuation report concerning the value and encumbrance status of those parcels. Jada's objection to any reliance on the valuation report was particularly because the authors of the report specifically stated that they could not vouch for its accuracy. Fresh evidence which Jada was permitted to adduce in the appeal showed that at the time when the order of 1^st April 2009, was made, parcels 63, 66 and 67 were encumbered for a sum well in excess of the US$2 million which was to be guaranteed.

A single judge of the Court of Appeal made an order on 16^th April 2009, which directed the Development Control Authority to provide the registrar of lands with a status report regarding the state of completion of the units on parcels 63, 66 and 67. The order also reflected that by consent, counsel for the parties agreed that restrictions be placed on 3 alternative parcels of land, to wit, Block 1257B parcels 182/v/15, 182/v32 and 182/v42 ("parcels 15, 32 and 42") in the meantime. In a subsequent order of 5^th August 2009, the single judge noted that parcels 63, 66 and 67 were so heavily encumbered that the court did not consider that they sufficed for the purpose of securing the guarantee, which the order of 1^st April 2009, sought to have identified for that purpose. Accordingly, the single judge confirmed the removal of the inhibition against parcels 63, 66 and 67; directed the retention of the restriction against parcels 15 and 42, and the removal of the restriction that was placed upon parcel 32.

Held: allowing the appeal, setting aside paragraphs 2, 3 and 5 of the order of 1^st April 2009, with the Landing to pay costs to Jada in the High Court and in this appeal to be assessed pursuant to rules 65.12 and 65.13 of CPR 2000, if not agreed:

• 1. The order of 1^st April 2009, is vitiated, first, because no cogent reasons were given for the decision to secure the guarantee on parcels 63, 66 and 67, and, second, because it is obvious that the judge made it on a conditional valuation and in the absence of disclosure of the exact encumbered status of the parcels 63, 66 and 67. In effect, the reason for decision is unsatisfactory and was made without all of the relevant facts to permit the court to make a dispassionate decision in violation of the Benmax principles.

  Dictum in Michel Defour et al v Helenair et al (1996) 52 WIR 194 and in Golfview Development Limited v St. Kitts Development Corporation and Another, Saint Christopher and Nevis Civil Appeal No. 17 of 2004 (20^th June 2007), at paragraphs 23 and 24, applied.

• 2. This court is not seized of all of the facts to permit it to determine which parcels the Landing should retain for securing the guarantee, but notes that a single judge of this court made an order on 9^th August 2009, upon receiving information as to the status of parcels 63, 66 and 67 and the value of parcels 15, 32 and 42 of the Landing development. The order of 9^th August 2009, retained a restriction on parcels 15 and 42 and this court would maintain this restriction and give liberty to Jada to apply to the High Court for any other order that Jada think is necessary to secure the guarantee.

RAWLINS, C.J.

1 This appeal raises the question whether a High Court Judge erred when he made an order in which he purported to correct a prior order, removed restrictions which he had placed on 9 parcels of property of a condominium development and instead entered inhibitions on 3 alternative parcels in the said development.

Factual and procedural background

2 The appellant, Jada Construction Caribbean Ltd. ("Jada"), was engaged by the respondent, the Landing Limited ("the Landing") to manage certain construction works. The Landing is involved in a hotel and condominium development in the Quarter of Gros Islet. The agreement was terminated. The parties embarked on proceedings under the arbitration clause and as the matter came to court, Jada sought to obtain security for any damages which may be awarded in the arbitration or court proceedings.

3 On 16^th October 2006, a High Court Judge ordered the Landing to execute an undertaking guaranteeing the payment of damages up to US$4 million for any damages that may be awarded to Jada in the arbitration proceedings. At Jada's request, the Registrar of Lands entered a judicial hypothec against the Landing's properties, namely, Block 1257B Parcels 182/v/17, 18 and 44 ("parcels 17, 18 and 44"). The Landing's applied to the Registrar to remove the hypothec on the ground that it was wrongfully registered. The Registrar refused to remove them. The Landing appealed the registrar's order to the High Court by way of application filed on 27^th June 2008.

4 On 29^th July 2008, Jada applied for an order to require the Landing to comply with the order of 16^th October 2006. The application also sought an order placing inhibitions on parcels 17, 18 and 44. These were to restrain the Landing from disposing of or encumbering its properties registered at the Registry of Lands, including parcels 17, 18 and 44, until such time as the Landing executed the guarantee in a form satisfactory to Jada. The application sought, alternatively, to order the Landing to execute a guarantee in a form satisfactory to Jada within 7 days, failing which Mr. John Lucas, the corporate secretary of the Landing, be considered in contempt of court with liberty to Jada to file committal proceedings.

5 The Landing responded by filing an application on 29^th August 2008, seeking an order for security for costs against Jada.

6 On 5^th November 2008, the Landing appeal against the registrar's refusal to remove the judicial hypothecs from parcels 17, 18 and 44 and their application for security for costs, as well as Jada's application of 29^th July 2008, were heard by a High Court Judge. On 5^th November 2008, the judge ordered1 the removal of the judicial hypothec against parcels, 17, 18 and 44 but ordered the Landing to execute a guarantee in a form satisfactory to Jada to ensure that the Landing retained identified property to a value of at least US$2 million as security pending the determination of the claim. The order specifically gave no direction for security for costs on the Landing's application of 29^th August 2008.

7 Jada has asserted that the removal of the hypothec in exchange for the order for the execution of the guarantees was occasioned on an undertaking which the then counsel for the Landing gave orally to the court at 9^th November 2008, hearing to provide Jada with a list of properties which could be retained to secure US$2 millions.2 Jada asserted that it was in reliance on that undertaking that the order to remove the hypothec was made.3

8 In any event, no list of properties was provided to Jada by then counsel for the Landing. It however became apparent that the order of 5^th November 2008, was not filed with the Land Registry so that the hypothec was not removed.

9 By letter of 5^th December 2008, to the Registrar of Lands, Jada requested that restrictions be placed against parcels, 17, 18 and 44 until the Landing complied with the order of 5^th November 2008. At the hearing before the Registrar, former counsel for the Landing denied giving an undertaking to provide a list.4 The Registrar removed the judicial hypothec against parcels 17, 18 and 44 and invited Jada to identify alternative parcels against which restrictions could have been placed to secure the US$2 million. After a search of the Land Registry, Solicitors for Jada became aware of 9 parcels of the Landing's development which were apparently unencumbered. The Registrar obliged and entered a restriction against the 9 parcels. The restriction was placed against that many parcels because Jada was unaware of the exact value of those parcels at the time.

10 By application dated 7^th January 2009, Jada applied to the court for an order to correct omissions and errors in the order of 5^th November 2008, under the slip rule (rule 42.10 of CPR 2000). Jada also applied for...