River Doree Holdings Ltd Claimant v Attorney General of St. Lucia Defendant [ECSC]
| Jurisdiction | St Lucia |
| Judge | Georges J. [AG.] |
| Judgment Date | 30 July 2012 |
| Judgment citation (vLex) | [2012] ECSC J0730-4 |
| Court | High Court (Saint Lucia) |
| Docket Number | SLUHCV 2005/0544 |
| Date | 30 July 2012 |
IN THE HIGH COURT OF JUSTICE
SLUHCV 2005/0544
On 20th February 1987 the Government of St. Lucia ('the defendant') entered into a Lease Agreement with the claimant River Doree Holdings Limited ("the company") in which it purported to lease 1,337 acres of land situate in the Quarter of Choiseul and Laborie for a term of 50 years with an option to renew for a further period of 25 years. The lease also contained an option for the claimant to purchase the lands "at any time after the end of the tenth year of the term thereby created and prior to the expiration of such term by giving notice in writing to the Government of its desire to purchase the absolute ownership of the lands and buildings then subject to the lease in which event……the Government will forthwith execute in favour of the Lessee a Deed of Sale of the lands and buildings then subject to the lease in a form to be settled by lawyers for the Government and the Lessee."
By letter dated 10th January 1997 addressed to Mr. Cosmos Richardson, Permanent Secretary in the Ministry of Agriculture and Lands Mr. Stephen McNamara acting on the instructions of his client River Doree Holdings Limited wrote giving notice in accordance with Clause 9(9) of the Lease of the company's desire to purchase the absolute ownership of the lands and buildings which constituted the remainder of the property then in the possession of the company River Doree for a purchase price of EC$10.00 in accordance with the terms and conditions of the Lease adding that his client's right to purchase those lands became exercisable at the end of the 10th year of the Lease to wit on the 23rd day of October 1996.
Government refused to convey and after protracted negotiations and extensive exchange of correspondence between the parties and their legal advisers and with Government alleging that there were breaches of covenants of the Lease by River Doree and declining on that account to execute a Deed of Sale of the remaining lands of the Lease to the company, the claimant's Solicitors (Messrs McNamara & Co.) finally on 14th June 2005 gave Notice of Intention to the Honourable Attorney General to file suit pursuant to Article 28 of the Civil Code of Procedure and Section 13 of the Crown Proceedings Ordinance against the Government of St. Lucia for breach of the Lease Agreement by its failure to execute a Deed of Sale and to convey the remaining lands of the Lease to the claimant.
In these proceedings the claimant seeks inter alia a declaration that it is entitled to have the lands then in its possession transferred to it by Government at any time after the 10th year of the term on payment of the prescribed price of EC$10.00. Government on the other hand contends that on the basis of various reports and other information available regarding the performance by the company of the terms and conditions of the Lease including the Development Programme that the company had failed to carry out the said terms and conditions satisfactorily and either no longer wished to or had the capacity to perform its obligations under the Lease.
A declaration is also sought that the claimant on the 10th day of January 1997 became legally entitled to the grant of an Alien's Licence by the Government of Saint Lucia for the purpose of holding the freehold interest in the said lands and that as of the same date the Government of Saint Lucia became a trustee on behalf of the claimant in respect of the said lands and remained and continues to remain trustee thereof on behalf of the claimant.
Damages for breach of the terms and conditions contained in the said Deed of Lease between the Crown and the claimant as well as interest and costs and such further and other relief as may be just are also claimed.
On a pre-trial preliminary point the defendant ("Government") applied to the Court for a ruling as to the true construction of Clause 9(9) of the Lease which created the option to purchase and which in a sense lies at the heart of this dispute.
Clause 9(9) stipulates that:
"At any time after the end of the tenth year of the term hereby created and prior to the expiration of such term The Lessee may give notice in writing to The Government of its desire to purchase the absolute ownership of the lands and buildings then subject to this Lease in which event subject to sub-clauses (10) ( 11) and (12) below The Government will forthwith execute in favour of the Lessee a Deed of Sale of the lands and buildings then subject to this lease in a form to be settled by Lawyers for The Government and The Lessee so as to be consistent with the obligations of the Lessee in this Lease and to enable restrictions and positive obligations for the benefit of the River Doree Holdings Limited Development to be imposed and enforced by The Government and The Lessee."
Master Brian Cottle (as he then was) opined at paragraphs 7 and 8 of his decision rendered on 27th October 2006 that:
"[7] The clause in question in my view is quite clear. It obliges the defendant to convey to the claimant, the lands which are the subject matter of the lease once certain conditions are met. The claimant's position is that the relevant conditions are to be found at clauses 9(10) 9( 11) and 9(12) only.
[8] The defendant on the other hand urges that the lease must be read as a whole. The true intent and meaning of the option to purchase can only be understood if the Clause is read in context."
Counsel for the claimant argued that the option to purchase was separate and distinct from the lease itself but although agreeing with the submission and holding that there was no bar to enforcing an option to purchase even if a lessee has breached a condition of the lease, the Master nevertheless held that in construing the meaning of the option itself regard must be had to the preamble of the lease at letter E which reads:
'The Lessee at the end of the first ten (10) year period of this Lease will be permitted by the Government to purchase the then remainder of the land and buildings in Schedule 5 provided The Lessee has satisfactorily carried out the terms and conditions of this Lease including the Development Programme for the sum of East Caribbean Currency Ten Dollars (EC$10.00) and The Government will grant to the lessee a licence under the Aliens (Landholding Regulation) Laws of Saint Lucia to hold as owner such lands and buildings."
The importance of the preamble to the parties the learned Master noted was emphasized by the fact that it is here that the parties have provided for payment of the lease rent. I fully agree.
In conclusion the Master held that read in conjunction with Clause 9(9) it was clear thatthe option to purchase was and is conditioned upon the Lessee having satisfactorily carried out the terms and conditions of the lease including the Development Programme. I fully concur. (Emphasis supplied)
Further Clause 9(9) is specifically made subject to Clause 9(11) which requires the defendant to grant to the claimant a Licence under the Aliens (Landholding Regulation) Laws free of charge which was to contain conditions"designed to ensure that so far as practical the Development Programme, on pain of forfeiture of the said lands and buildings, shall be carried out in accordance with the terms and conditions of this Lease." I wholeheartedly agree and that in my view underscores the core of the Lease Agreement. (Emphasis supplied).
As indicated earlier the claimant's claim is for a declaration that it is entitled after the expiration of ten (10) years from 24th October 1986 to have the title to the subject lands then in its possession conveyed to it in accordance with the terms and conditions of the Lease Agreement dated 20th February 1987 having discharged its obligations either wholly or substantially arising under the deed of lease and having validly exercised its option to purchase/acquire the said lands (described in the Lease Agreement as 1,337 acres) by notice in writing dated 10th January 1997 to the defendant/lessor.
The defendant resists the claim on the basis that the claimant failed to discharge its obligations satisfactorily more specifically those set out in clause 9(11) of the Lease Agreement relating to the granting to the claimant of an Alien's Landholding Licence containing conditions designed to ensure that as far as practicable the Development Programme, on pain of forfeiture of the said lands and buildings, shall be carried out in accordance with the terms and conditions of the lease. The claimant contends that these may be described as conditions subsequent to its grant.
Surely the grant of an Alien's Licence to hold property as owner as referred to in clause 9(11) of the Lease Agreement cannot be construed to be an automatic grant since the grant of the Alien's Licence in this case would invoke the exercise of a future executive discretion the exercise of which could not be circumscribed by an agreement entered into by hand.
The claim is further opposed by particulars set out at paragraph 15 of the defendant's defence which alleges failure by the claimant:
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(i) to submit to and comply at all times with the Development Programme and any modification thereto as required by Schedule 3 of the Lease Agreement;
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(ii) to follow a condition of the lease with regard to the sale of farmlands, and to have in fact sold more farmlands than was stipulated in the lease;
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(iii) to adequately or at all construct a proper road infrastructure;
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(iv) to adequately or at all adhere to the production program specified in the lease including but not limited to Cocoa, Fruit Trees and Pineapple Production;
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(v) to...
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