River Doree Holdings Ltd Appellant v Attorney General of St. Lucia Respondent [ECSC]

• Jurisdiction: St Lucia
• Judge: Carrington JA [AG.],Justice of Appeal [Ag.],Chief Justice,John Carrington, QC,Dame Janice M. Pereira, DBE,Davidson K. Baptiste,Justice of Appeal
• Judgment Date: 25 November 2013
• Judgment citation (vLex): [2013] ECSC J1125-3
• Court: Court of Appeal (Saint Lucia)
• Docket Number: SLUHCVAP2012/0028
• Date: 25 November 2013

[2013] ECSC J1125-3

THE EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Before:

The Hon. Dame Janice M. Pereira, DBE Chief Justice

The Hon. Mr. Davidson K. Baptiste Justice of Appeal

The Hon. Mr. John Carrington, QC Justice of Appeal [Ag.]

SLUHCVAP2012/0028

Between:

River Doree Holdings Limited

Appellant

and

Attorney General of St. Lucia

Respondent

Civil appeal — Lease agreement — Lease of Crown lands to Danish owned and controlled company — Lease containing sub-clause providing for option to purchase property after specified term — Interpretation of sub-clause containing option to purchase — Whether proper construction of option clause in lease required that appellant should have satisfactorily carried out terms and conditions of lease in order to be able to either exercise option or compel Government to execute Deed of Sale — Whether appellant rightly exercised option to purchase — Whether Government breached terms of lease agreement — Whether proper construction of sub-clause which provided for grant of Aliens Landholding Licence was that conditions stated therein were conditions precedent to grant of licence — Whether learned judge erred in finding that Government could not have bound itself in advance to issue Aliens Landholding Licence for purchase of remaining lands under lease

On 20^th February 1987, the Danish owned and controlled appellant company entered into a lease agreement with the Government of Saint Lucia. By this agreement, 1,337 acres of land belonging to the Crown was to be leased to the appellant for a term of 50 years with the appellant having the option to renew the lease for a further 25 years. The lease agreement contained sub-clauses 9(9) and 9(10) which gave the appellant the option of purchasing the lands and buildings then subject to the lease at any time after the 10^th year of the term of the lease and stipulated a purchase price of EC$10.00. Sub-clause 9(11) provided for the grant of a licence under the Aliens (Landholding Regulation) Laws free of charge, for the lessee to hold as owner the land and buildings then subject to the lease. Additionally, the preamble of the lease contained a recital 'E' which stated that at the end of the first 10 year period of the lease, the lessee will be permitted by the Government to purchase the then remaining lands and buildings subject to the lease provided that the lessee has satisfactorily carried out the terms and conditions of the lease including 'the Development Program'. Recital E further set out the purchase price of EC$10.00 and made provision for the grant of an Aliens Landholding Licence to the lessee. The Development Program mentioned in recital E was contained in Schedule 6 to the lease and set out the initial framework and objectives for the development of the land subject to the lease.

On 10^th January 1997, a few months after the expiration of the first 10 years of the term of the lease, the appellant gave notice to the Government of its desire to purchase the freehold interest in the remainder of the lands and buildings which comprised the leasehold property. Upon receipt of this notice, Government began conducting a series of investigations to review the operations of the appellant on the leasehold property and concluded that the Development Program had not been satisfactorily carried out. The Government refused to convey the property into the appellant's name and subsequently gave notice to the appellant of its intention to determine the lease as a consequence of the appellant's failure to comply with specific obligations set out in the agreement and eventually of its intention to acquire the leased lands compulsorily.

The appellant instituted legal proceedings against the respondent in the court below, seeking, inter alia, a declaration that it was entitled to have the lands then in its possession transferred to it by the Government at any time after the 10^th year of the term on payment of the prescribed price of EC$10.00. Government contended that on the basis of various reports and investigations, the appellant had failed to carry out the said terms and conditions of the lease satisfactorily and either no longer wished to, or no longer had the capacity to perform its obligations under the lease. On 27^th October 2006, a master ruled on a pre-trial preliminary point as to the true construction of sub-clause 9(9), which created the option to purchase. He held that in construing the meaning of the option itself, regard must be had to recital E in the preamble of the lease and that when this is read in conjunction with sub-clause 9(9) it was clear that the option to purchase was and is conditioned upon the lessee having satisfactorily carried out the terms and conditions of the lease including the Development Program. The learned trial judge fully concurred with the ruling of the master and ultimately found that the appellant had failed to comply with the terms of the Development Program and dismissed the appellant's claim, holding that the appellant was not entitled to the declarations that it sought. The appellant appealed to this Court.

Held: allowing the appeal and setting aside the order of the court below, that:

• 1. The operative words of a deed which are expressed in clear and unambiguous language are not to be controlled, cut down, or qualified by a recital or narrative of intention. In the instant case, the operative clauses 9(9)-(12) of the lease agreement appear to be unambiguous and complete so there is no need for recourse to recital E in the preamble to assist in their construction. The learned master and trial judge therefore erred in finding that the words of recital E should be incorporated in order to determine the proper construction of the option clauses 9(9)-(12) of the lease. There was therefore no requirement that the appellant should have satisfactorily carried out the terms and conditions of the lease including the Development Program in order to be able either to exercise the option or compel the Government to execute the Deed of Sale. Rather, the only condition precedent to the exercise of the option is that stated in sub-clause 9(9) itself, namely that the appellant should give notice to the Government of its desire to the exercise the option to purchase the leasehold property. The notice given to the Government on 10^th January 1997 was sufficient for this purpose.

• Mackenzie and Others v The Duke of Devonshire and Others [1896] AC 400 applied; Halsbury's Laws (4^th edn. reissue, 2007) vol. 13, paragraphs 218 and 219 cited.

• 2. The proper interpretation of sub-clause 9(11) is that the conditions stated therein are conditions to be included in the grant of the Aliens Landholding Licence and not conditions precedent to the grant of the licence.

• 3. The transfer of the beneficial interest in the property to the appellant, which would occur on the date on which the option is exercised, is independent of the grant of the Landholding Licence to the appellant.

In re Marlay [1915] 2 Ch 264 applied; Ho Young and Another v Bess [1995] 1 WLR 350 applied.

4. There is no specific statutory provision in the Aliens (Landholding Regulation) Act 1973 that prohibits the Government from agreeing to the grant in the future of an Aliens Landholding Licence. The Government had exercised its statutory discretion to grant the licence to hold the title to the land in the event that the lessee were to enforce the option to purchase, prior to or at the time of the execution of the lease which included the option agreement, in 1986. This was not a case of agreeing to restrict the way in which Government would exercise its discretion in the future, but one of exercising that discretion in advance even if the result was that the discretion having been exercised, it was no longer available to be exercised in a different manner at a later date.

Regina v Hammersmith and Fulham London Borough Council, Ex parte Beddowes [1987] 1 QB 1050 applied.

Introduction

Carrington JA [AG.]

1 This is an appeal from the order of Georges J [Ag.] in the High Court dated 30^th July 2012 after a 5 day trial during the course of 2009 in which he dismissed the claim by the appellant, the claimant in the court below, and the counterclaim of the respondent, the defendant in the court below. The appellant was ordered to pay the costs of the respondent on the claim, such costs to be determined on the prescribed costs basis. The counterclaim was struck out with no order as to costs.

2 The appellant has appealed to this Court against the dismissal of its claim. There is no appeal by the respondent against the dismissal of the counterclaim.

3 In its claim that was issued in 2005, the appellant had sought against the respondent, the Government of Saint Lucia, several heads of declaratory relief and damages in respect of the Government's alleged breaches of the terms of its lease to the appellant of approximately 1337 acres of land in Saint Lucia. The substantive relief sought was:

• "(1) A declaration that the Claimant on the 10^th day of January, 1997 became legally entitled to the transfer and a Deed of Sale of and in respect of the freehold interest of and in the lands described in the First Schedule to [the] Deed of Lease dated 20^th February, 1987 between Her Majesty Queen Elizabeth the Second, represented by His Excellency Sir Allen M. Lewis, Governor-General of St. Lucia and the Claimant.

• (2) A declaration that the Claimant on the 10^th day of January, 1997 became legally entitled to the grant of an Alien's [Landholding] Licence by the Government of Saint Lucia for the purpose of holding the freehold interest in the said lands.

• (3) A declaration that on the 10^th day of January, 1997 the Government of Saint Lucia became trustee on behalf of the Claimant in respect of the said lands and from that date remained and continues to remain trustee thereof on behalf of the...