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Court of Appeal of Fiji |
IN THE COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT
CIVIL APPEAL NO. ABU 0024 of 2010
(High Court Civil Action No. HBC 438 of 2003L)
BETWEEN:
RAP CHAND HOLDINGS LIMITED
Appellant
AND:
NATIVE LAND TRUST BOARD
Respondent
Coram : Calanchini AP
Chandra JA
Mutunayagam JA
Counsel : Mr. E. Maopa for the Appellant
Mr. C. Tuberi for the Respondent
Date of Hearing : 13 February 2013
Date of Judgment : 13 March 2013
JUDGMENT
Calanchini AP
[1] I have had the opportunity of reading the judgment of Chandra JA and agree with his proposed orders.
Chandra JA
[2] This is an appeal from the judgment of Justice S.Inoke delivered on 16th June 2010 at the Lautoka High Court.
[3] The Appellant filed a writ of summons in the High Court challenging the cancellation of the lease given to it by the Respondent on 19th November 1999.
[4] The Appellant sought the following orders in his amended statement of claim:
(a) A declaration that the notice given by the Defendant to the Plaintiff on the 11th September, 2003 and re-entry made on the 1st October, 2003 in respect of the Company as described in Native Lease No.25050 known as NL Legalega part Lot 1, 2 and 3 SO 3201 situated in the Tikina of Nadi in the province of Ba containing 3478 square meters is unlawful, null and void.
(b) An injunction restricting (sic) the Defendant and/or its servant/agents and/or workmen from repossessing the land known as Native Lease No. 25050 known as NL Legalega part Lot 1, 2 and 3 SO 3201 situated in the Tikina of Nadi in the Province of Ba containing 3478 square meters in any manner whatsoever until further order of this Honourable Court.
(c) For an injunction restraining the Defendant and/or its servants/agents and/or workmen for (sic) interference with the Plaintiffs development of its land known as Native Lease No.25050 known as NL Legalega part Lot 1, 2 and 3 SO 3201 situated in the Tikina of Nadi in the Province of Ba containing 3478 square meters.
(d) Special damages in the sum of $137,095.50 under paragraph 32 hereof.
(e) Damages (including punitive and exemplary damages) in the sum of $8,000,000.00 (Eight Million Dollars).
(f) Costs of this action on Solicitor/Client indemnity basis.
(g) Such further and/or other order that the Honourable Court (deems) just equitable and expedient.
[5] The learned trial Judge by his judgment dated 16 June 2010 dismissed the Appellant's action with costs fixed at $ 4000.
[6] The Appellant in his notice of Appeal appealed against the said judgment on the following grounds:
[7] As much of the material placed before Court comprised of documents which were not disputed, it would be relevant to set out the Pre Trial Conference Minutes which were the Agreed Facts between the parties which are as follows:
[8] The Agreed Issues were the following:
[9] As the land which was the subject matter of the lease had been sold to a third party subsequently, the Appellant did not pursue the orders it sought under paragraphs (b) and (c) set out in the statement of claim which were injunctions.
[10] The Lease between the Appellant and the Respondent was executed on the 19th of November 1999. As seen from the Agreed facts 1 to 6 in paragraph 5 above, prior to the Appellant executing the lease with the Respondent the lease had been with Ramend Kumar Charan and the Respondent executed on 6th September 1994.
[11] The said lease between the Appellant and the Respondent which was numbered 2050 and bore Ref. No.4/10/1581 was for a period of Ninety Nine (99) years to be effective from 1st July 1994. The lease which had been executed between Ramend Kumar Chandran and the Respondent was not available in the record as neither party had produced it.
[12] Though the said Lease was executed on the 19th of November 1999, it was only by letter dated 26th April 2000 (Agreed Fact No.9) that the Respondent informed the Appellant (Lessee) that the Lease had been stamped and registered and available for collection.
[13] In the said Lease No.2050, Clause 3(b) was to the following effect:
"To prepare and lodge with the lessor for the lessors approval on or before the first day of September 1994 detailed design plans, elevations and specifications (hereinafter called "the plan) of a tourist resort to be constructed of substantial native materials on the land for tourism, hospitality, entering, offices, shops and accommodation purposes and any other building ancillary to the Resort operations."
[14] By letter dated 21 August 2002 (Agreed Fact No.10) the Appellant's Solicitors informed the Respondent that the Appellant had done soil/land development and that the soil had to settle before any construction could take place, and requested for extension of time for construction of tourist development and that the plans would be submitted in due course.
[15] By letter dated 17th July 2003 (Agreed Fact No.11) the Respondent had been informed by Ramend Kumar Charan that the fill which was made for the property had settled down and the plans would be forwarded for approval and endorsement.
[16] The Appellant had submitted the Plan on 17th July 2003 for approval by the Respondent and the Respondent had on the 21st of July 2003 approved the Plan and the Nadi Rural Local Authority had approved same on the 1st of August 2003 (Agreed Fact No.16).
[17] By letter dated 11th September 2003 (Agreed Fact No.12) the Respondent gave notice under Section 105 of the Property Law Act to the Appellant and terminated the lease and required the Appellant to quit and give vacant possession of the land to the Respondent immediately. Attention was drawn in the said letter to the following effect:
"Our records show that you have committed a fundamental breach of a term or condition of your Lease namely that you have failed to comply with the requisite Clause 2(b) of the Lease. Clause 2(b) states that you were required to prepare and lodge with the Board on or before the First day of September 1994 detailed design plans, elevations and specifications of a Tourism Resort to be constructed on the subject land for tourism and resort purposes. To date no such building has even been erected on the site."
[18] By letter dated 19th September 2003 (Agreed Fact No.13) The Appellant's Solicitors replied to the said letter dated 11th September 2003 drawing the Respondent's attention to their letter dated 21st August 2002 and that the Plans which were submitted had been approved by the Senior Estate Officer of the Respondent on 21st July 2003 and requested that further action should be taken and that they would be proceeding with the developments.
[19] Replying to the letter of the 19th September 2003(Agreed Fact No.14) the Respondent had informed the Appellant's Solicitors that Legal Action would be taken unless there was a firm undertaking that the development will get off the ground within the next 3 months and that if they did not receive any favourable response from the Appellant within that period that they would have no other alternative but to instigate legal action for the cancellation of the lease.
[20] By letter dated 30th September 2003 (Agreed Fact No.16) the Respondent referred the Appellant's Solicitors to the earlier letters dated 22nd September 2003 and 11th September 2003 and informed that the Respondent's position remained the same and that there can be no consideration with regard to the status of the notice of re-entry and that the Appellant should quit and give vacant possession immediately. The Respondent further stated in the said letter that their position regarding re-entry remained unaltered due to the seriousness of the various fundamental breaches of the lease conditions committed by the Appellant.
[21] On 30th September 2003 the Respondent through its Manager (South-Western Region) issued a notice on the Appellant to the following effect:
"EXECUTION OF RE-ENTRY POWERS
UNDER CLAUSE 2 OF THE NATIVE LEASE AGREEMENT
PURSUANT to powers granted by clause 2 of the Tourism Lease Agreement dated the 6th day of September 1994 and there being a Notice having been issued on the 11th day of September 2003 and with the Notice having now expired and no rectification of the said breach having been implemented, the Lessor is now left with no other option but to exercise its re-entry powers pursuant to the powers granted by the above-mentioned clause in the Lease Agreement.
UPON re-entry now effective this day, the lease shall pursuant to clause 2 absolutely cease forthwith.
DATED 30th day of September 2003."
[22] The Respondent through its Legal Officer (South Western) issued a notice dated 1st October 2003 to the following effect:
"EXECUTION OF RE-ENTRY POWERS
UNDER CLAUSE 3 OF THE NATIVE LEASE AGREEMENT
PURSUANT to powers granted by clause 3 of the Tourism Lease Agreement registered on the 9th day of December 1999 and there being a Notice having been issued on the 11th day of September 2003 and with the notice having now expired and no rectification of the said breach having been implemented, the Lessor is now left with no other option but to exercise its re-entry powers pursuant to the powers granted by the above mentioned clause in the Lease Agreement.
UPON re-entry now effective this day, the lease shall pursuant to clause 3 absolutely cease forthwith.
DATED this 1st day of October 2003."
[23] The Appellant's Solicitors by letter dated 7th October 2003 (Agreed Fact No.22) referring to the notice of re-entry dated 1st October 2003 requested that the Appellant be allowed to proceed with the venture as the Appellant had invested monies in acquiring the lease, landfill, bulldozer works etc and that the Appellant was ready to commence with the construction of buildings. There was no response to this letter.
[24] The Appellant filed a writ of summons in the High Court at Lautoka on the 8th of December 2004 seeking the reliefs set out in paragraph 4 above.
[25] The Respondent filed its statement of Defence on 7th September 2004 seeking to justify the cancellation of the lease and stated therein that the lease interest in the said lease had after re-entry been sold to Sun Beach Fiji Limited.
[26] At the commencement of the hearing, the Respondent raised a preliminary issue on the basis that it would decide the case. The issue was that the Registrar of Titles had already exercised his powers under Section 57 of the Land Transfer Act (Cap.131) and cancelled the Appellant's interests in the Lease, and that brought an end to the matter in dispute.
[27] The learned trial Judge dealt with this issue exhaustively, dismissed same and proceeded with the trial on the basis that the issue of the cancellation of the lease was one between the Appellant and the Respondent and all that the Registrar of Titles had done was to register the cancellation of the lease.
[28] Since the issues raised in the grounds of appeal 1 to 4 are inter-related it is intended to deal with them together.
[29] During the trial, the Company Accountant, the principal of the Appellant Company Mr. Ramen Charan and Mr.Lawrence Charles Browne of Queensland Australia who was expecting to go into a joint venture with Mr. Charan gave evidence for the Appellant while an Officer of the Respondent, Ms.Senimelia Karikaritu gave evidence for the Respondent.
[30] The learned trial Judge in his judgment dealt with the issue of liability in respect of the Appellant's claim for a declaration that the notice of 11 September 2003 and re-entry on 1 October 2003 was unlawful and null and void.
[31] The learned trial Judge having stated at paragraph 49 that the lease was executed on 19 November 1999 and registered on 9 December 1999 and was to run for 99 years from 1 July 1994 went on to state in relation to the notice of 11 September 2003 as follows:
[51] "So by the time the lease was executed and registered in 1999 the time set by clause 3(b) had already expired and the lessee's obligations under the clause had not and could not have been complied with unless the plans were lodged some 5 years earlier, i.e. before 1994, which was not in fact done. The plans were only lodged on 17 July 2003 and approved four days later."
[53] The notice of 11 September 2003 referred to clause 2(b) of the lease but it is obvious from the content of the notice and the subject matter, "Lease No:4/10/4581", that the notice was referring to clause 2(b) of the first lease which was in exactly the same terms as clause 3(b) of the registered lease NL 25050. Also, I think it was quite clear to the Plaintiff and Mr.Charan and their solicitors that the termination of the lease was principally on the basis of alleged non-compliance with the "building clause", clause 3(b). I do not think that they can now complain that they were mistaken as to the reason for purported termination.
[54] Counsel for the Plaintiff submitted that the NLTB had waived any breach of clause 3(b) by executing the lease in November 1999. Thus, although counsel did not say so in so many words, the Plaintiff's case was run on the premise that clause 3(b) was operative at the time the lease was executed despite the fact that the time for compliance had expired some 5 years earlier. Indeed, the Plaintiff's case rested primarily on the submission that whatever the breach, by the time the Plaintiff became lessee, the building clause had already been breached by the previous lessee. The clause can only be breached once so the Plaintiff cannot be said to have breached it again.
[55] Dr.Sahu Khan cited the unreported decision of this Court in Danam & Co Ltd v A.G. [2002] FJHC; HBC 209 of 2002L (17 October 2003) as supporting his submission. In that case, the building covenant required the lessee to erect an industrial building within 2 years from the commencement of the lease, that, compliance by 31 December 2000. The original lessees had not complied with the covenant when they obtained the consent of the Director of Lands to transfer the lease. The land was subsequently transferred and on the second attempted transfer, an issue arose as to whether the breach was a continuing one. ByrneJ, as he then was, adopted what was said by Lord Denning MR in In re King, Deceased, Robinson v Gray [1963] 1 Ch 459, 478, that:
"Where the relevant obligation is to perform an act by a given date or within a reasonable period of time, it will fall to be classified as an obligation that can be broken only once. Thus if the particular act has not been performed by that date or within a reasonable time (as the case may be) there is a single breach of covenant. He asked himself the question: Can the assignor in those circumstances after wards sue the lessee for the breach that occurred, before the assignment, of the covenant to keep in repair? Clearly not: for that would mean that the lessee would be made liable twice over".
[56] Stephen v Junior Army & Navy Stores Ltd [1914] UKLawRpCh 103; [1914] 2 CH 516, 523 Lord Cozens-Hardy MR; Jardine v AG for Newfoundland [1932] AC 275, 292 (PC) and Larking v Great Western (Nepean) Gravel Ltd [1940] HCA 37; [1940] 64 CLR 221, 236/7 Dixon J were also referred in Danam & Co (supra) as supporting the proposition that a building covenant can only be breached once.
[57] The facts in Danam & Co (supra) however, are different from the present case for several reasons. The time for compliance had already expired when the lease was signed in 1999. The plaintiff's case is that it was Charan that committed the breach. However, it was he who wanted the lease assigned or issued to his company, the Plaintiff. I do not think that he should be allowed to take advantage of his breach by hiding behind his company. (Emphasis added)
[58] In any event, it is my view that it was the same lessee throughout. Although the PTC Minutes state as an agreed fact that the first lease, which was in Charan's name, was later assigned to the Plaintiff and then subsequently became Native Lease 25050, the two lease documents in the Agreed Bundle of Documents (12 and 23) show that the Plaintiff Company was the intended lessee and the lessee in fact..(Emphasis added)
[32] Although the lease was executed on 19 November 1999, it was to run from 1 July 1994 for 99 years. No explanation had been forthcoming by either party as to why the effective date was predated by 5 years.
[33] The effective lease being the one executed on 9th December 1999 between the Appellant and the Respondent it would be the effective document in relation to the lease as far as the parties were concerned. Therefore it is the clauses therein that would bind them to their obligations.
[34] One of the key clauses in the said lease was Clause 3(b) which was in relation to the submission of the proposed plans for construction to be approved by the Respondent. This clause was a non-starter at the inception itself as it was to be effective from 1st September 1994 was five years prior to the execution of the lease. It was a condition that was impossible of being performed. Here again there was no evidence forthcoming from either party as to why that date was inserted. This gives rise to a situation where the clause becomes ineffective which would mean therefore that there is no effective date as regards the submission of the plans by the Lessee for approval. No notification has emanated from the Respondent from the time that the lease was executed in 1999 upto 11th September 2003 regarding any the breach of the conditions in the lease whereas the Lessee has after 1999 kept the Respondent informed by its letters dated 21 August 2002 and 17 July 2003 that it was taking steps towards developing the leased land. If there were any breaches of the conditions in the lease the Respondent could have notified the Lessee when these letters were sent, but no such action had been taken.
[35] The Appellant had submitted its Plans in July 2003 and they had been approved without any objection by the Respondent. The Respondent could have refused to approve the Plans submitted if the Respondent was relying on any breach of the conditions in the lease by the Appellant.
[36] With respect the learned trial Judge erred when he stated at paragraph [51] that the time set by clause 3(b) had already expired and that the lessee's obligations under the clause had not and could not have been complied with unless the plans were lodged some 5 years earlier, i.e. before 1994, which was not in fact done, as the said clause 3(b) was not capable of being put into effect when the lease was executed in 1999.
[37] Despite the approval of the Plans that were submitted by the Appellant, the Respondent sent letter dated 11 September 2003 terminating the lease on the basis that the Appellant had committed a fundamental breach of a term of condition, namely Clause 2(b) to the effect that plans had not been submitted before 1 September 1994. A perusal of the lease executed by the Appellant with the Respondent that there is no such Clause 2(b) in the said lease.
[38] The learned trial Judge referring to the said notice of 11 September 2003 stated at paragraph [53] that the notice was referring to clause 2(b) of the first lease which was in exactly the same terms as clause 3(b) of the registered lease NL25050. The earlier lease was not operational and it was the lease of 1999 that was operational. The earlier lease was not a production in the case going by the documents that were in the record of the High Court and there was no evidence to the effect that it had been produced by either party.
[39] At paragraph [54] the learned trial Judge had assumed that the Appellant had proceeded with his case on the premise that clause 3(b) was operative at the time the lease was executed despite the fact that the time for compliance had expired some 5 years earlier. The learned trial Judge clearly erred in stating so as has been said above Clause 3(b) was not capable of being performed at the time that the lease was executed. Further the learned Judge erred by stating that the clause can only be breached once, apparently going on the basis that the earlier lease was still operative and was being continued by the Appellant which was not the case. If there was a breach of the said clause it was a breach of a clause by the lessee in the previous lease which ceased to be operational once the lease between the Appellant and the Respondent was executed.
[40] The learned trial Judge referred to several authorities at paragraph [55] starting with the decision in Danam & Co Ltd v A.G. (Supra) and accepted the principle that a breach by a previous lessee cannot be considered as a continuing breach when the lease in question had been assigned to a new lessee in relation to a covenant to perform an act by a given date or within a reasonable period of time.
[41] However, in paragraph [57] the learned trial Judge sought to distinguish the decision in Danam & Co from the present case by stating that it was Charan (the former Lessee) who had wanted the lease assigned or issued to his company, the Appellant and that he should not be allowed to take advantage of his breach by hiding behind his company. The learned trial Judge went further in paragraph [58] by stating that in his view it was the same lessee throughout and that the two lease documents in the Agreed Bundle of Documents (12 and 23) show that the Appellant company was the intended lessee and the lessee in fact. It is to be noted that Document 23 is a document which has not been signed by the Respondent and therefore could not have been taken into account as a valid document.
[42] The learned trial Judge erred by treating the former Lessee and the Appellant as the same person and embarked upon an area which dealt with the concept of 'corporate personality'. It is a well established principle of law emanating from the decision in Saloman v Saloman & Co Ltd (1897) AC 22 that the legal personality of an individual is different from that of a corporate body, such as the Appellant Company. The legal personality of the lessee although he was the principal person behind the company Rapchand Holdings Limited was legally quite distinct from the legal personality of Rapchand Holdings Limited. The breach of a condition if ever there was one, was in respect of the former lease between Ramen Charan and the Respondent and that breach cannot be attributed to the Appellant Company which had executed the lease with the Respondent although it was in respect of the same land.
[43] The learned trial Judge at paragraph [62] stated that it was Charan who had promised to build a motel on the premises in 1992 and that he would start the development in a few months and that was the basis on which the Respondent had granted the lease. He then stated that the lessee building a tourism type development on the site became a fundamental term. Here again the learned trial Judge had lost sight of the fact that the present case dealt with the lease of the Appellant with the Respondent executed in 1999 and thereby erred in attributing the obligations cast on the previous Lessee to the Appellant. This error is carried further by the learned trial Judge at paragraph [67] of the judgment further by stating that the Appellant knew as far back as 1994 that it had to build and operate a tourist development by 1999.
[44] When the Appellant responded to the letter of 11 September 2003 by their letter of 19 September 2003 regarding previous correspondence seeking extension of time for construction and the fact that the Plans that had been submitted had been approved by a Senior Estate Officer of the Respondent, the Respondent by letter dated 22 September 2003 informed the Appellant that it was almost 10 years since the issue of the lease in 1994 and that the action that was contemplated was in line with the contractual obligations they had with them and that legal action would be taken unless there was a firm undertaking that the development would get off the ground within the next three months.
[45] The letter of 11 September 2003 refers to Clause 2(b) in a lease executed in 1994 which apparently was the lease that the Respondent had executed with Ramen Charan the former Lessee. The Respondent had failed to consider that the situation had changed from 1994 in that a new lease had been executed between the Appellant Company and the Respondent in 1999. The Respondent has not been diligent in checking on the nature of the lease that was in operation when this letter was dispatched to the Appellant.
[46] The letter of 22 September 2003 sent by the Respondent again refers to the lease issued in 1994 and that a period of almost 10 years had passed since then. However, this letter gave the Appellant three months time to give a firm undertaking that the development will get off the ground.
[47] Nevertheless, by letter dated 30 September 2003, the time given to the Appellant was taken away and notified that the Respondent was re-entering the land and that the Appellant was to quit and give vacant possession of the land immediately. This was followed by the two notices dated 30 September 2003 and 1 October 2003 regarding the execution of Re-Entry Powers, the first notice referring to Clause 2 of the lease dated 6 September 1994 and the second notice referring to Clause 3 of the lease registered on 9 December 1999.
[48] This course of action taken by the Respondent was contrary to the provisions in Section 105(1) the Property Law Act which states as follows:
"105(1) A right of re-entry or forfeiture under any proviso or stipulation in a lease for a breach of any covenant or condition, express or implied, in the lease shall not be enforceable, by action or otherwise, unless and until the lessor serves on the lessee a notice –
(a) Specifying the particular breach complained of; and
(b) If the breach is capable of remedy requiring the lessee to remedy the breach' and
(c) In any case, requiring the lessee to make compensation in money for the breach,
(d) And the lessee fails, within a reasonable time thereafter, to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor, for the breach."
[49] By its letter dated 11 September 2003 the Respondent terminated the lease without complying with the above provisions in S.105(1). By its letter dated 22 September 2003 the Respondent gave three months time within which to give an undertaking that the development will get off the ground which had the effect of nullifying the notice given by the letter of 11 September 2003. But by letter dated 30 September which again did not comply with the provisions of S.'105(1) the Respondent terminated the lease and without giving effect to the time granted by the letter of 22 September 2003. The final conclusive action by the Respondent was by the issue of the Execution of Re-Entry Powers notices dated 30 September 2003 and 1 October 2003 which finally terminated the lease.
[50] The learned trial Judge in paragraph [40] of the judgment said the Officer who gave evidence on behalf of the Respondent stated that the lease was terminated for non compliance with the "building clause" and that the Appellant had not complied within 2 years and that the Respondent proceeded with re-entry which course of action the learned Judge concluded as having followed the proper process in the case. A consideration of the letters commencing from the 11 September 2003 and ending with the notice of 1 October 2003 it would be seen that the learned trial Judge erred in law arriving at that conclusion. The cancellation of the lease following that process was clearly contrary to law and hence unlawful.
[51] Thus the grounds of appeal 1, 2, 3 and 4 in the notice of appeal have been substantiated and they succeed. Grounds 6 and 7 contain matters which are repetitive of the grounds 1 to 4 which have been dealt with above and need no further consideration.
[52] As the Appellant's action was dismissed damages were not granted although the learned trial Judge made certain observations regarding the claim for damages.
[53] It is significant to note that at the end of the trial in the High Court the Respondent in its written submissions stated as follows in paragraphs 25, 26, 32 and 33:
"25. The Defendant further submits that if in the event this Honourable Court adjudged that the re-entry process was unlawful hence found the Defendant liable, the Plaintiff is still not entitled to the full damages claimed because any breach by the Defendant should have caused the loss;
26. In other words, the Plaintiff did not improve the land and/or carry out any development on the said land hence during the trial, it only provided a projected amount of what it could make if the project actually kicked off;
32. The Defendant submits and reiterates paragraph 25 above where in any event that this Honourable Court finds the Defendant liable, the Plaintiff should prove its loss, however, it has merely depended on the financial projection of how much it could make hence his case should drastically fail in that regard;
33. The Defendant submits that it can agree to pay for the Plaintiff's costs of making a plan and its application costs for approval to the Town & Country Planning and Nadi Town Council and that's about all that the Plaintiff lost in this situation since it failed to provide audit of monies actually expended during the trial;"
[54] The concession made by the Respondent at paragraph 33 would indicate that the Respondent had in fact in hindsight realized that the course of action adopted by the Board was not in accordance with law. This concession makes the task of determining the damages to be granted to the Appellant for unlawful cancellation of the lease somewhat easier.
[55] The Appellant in its amended statement of claim, claimed special and general damages and listed out a number of matters in its claim as special damages.
[56] By cancelling the lease entered into between the Respondent and the Appellant unlawfully as stated above, the Respondent has committed a breach of the contract. The remedy that was resorted to by the Appellant was the claim for damages which was claimed as special and general damages. In a breach of contract what the innocent party could claim as damages would be damages suffered as a result of the breach limited by the concept of remoteness as set out in the leading authority of Hadley v Baxendale (1854) 9 Exch. 341, where Alderson B., delivering the judgment of the Court stated:
"Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either as arising naturally, i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probably result of the breach of it. Now, if the special circumstances, under which the contract was actually made were communicated by the plaintiffs to the defendants, and thus known to both parties, the damages resulting from the breach of such a contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under special circumstances so known and communicated. On the other hand, if the special circumstances were wholly unknown to the party breaking the contract, he at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases not affected by any special circumstances, from such a breach of contract."
[57] In the Appellant's amended statement of claim, special damages and general damages were referred to. According to Halsbury's Laws of England 4th Edition, Volume 12(1) para. 812:
"A distinction is frequently drawn between the terms 'general' and 'special' damages, which terms have different meanings according to the context in which they are used. In the context of liability for loss (usually in contract), general damages are those which arise naturally and in the normal course of events, whereas special damages are those which do not arise naturally out of the defendant's breach and are recoverable only where they were not beyond the reasonable contemplation of the parties (for example, where the plaintiff communicated to the defendant prior to the breach the likely consequences of the breach). The distinction between the two terms is also drawn in relation to proof of loss: here, general damages are those losses, usually but not exclusively non-pecuniary, which are not capable of precise quantification in monetary terms, whereas special damages, in this context are those losses which can be calculated in financial terms. A third distinction between the two terms is in relation to pleading: here, special damage refers to those losses which must be proved, whereas general damages are those which be presumed to be the natural or probable consequence of the wrong complained of, with the result that the plaintiff is required only to assert that such damage has been suffered. Finally, the expression 'special damage' may be used alone, not in conjunction with the term 'general damage'."
[58] The Appellant had only submitted the Plans for the construction of a Tourism Office which it was planning to have and the Plan for the proposed Motel was only given as a sketch which meant that the planning process was not completed. Further the evidence did not indicate as to how the funds that were required for the construction were to be obtained by the Appellant except for the evidence of the witness for the Appellant who was not a registered Director who said that he was proposing to invest on the project of the Appellant. The Accountant's statement was on the basis of projected profits once the project was completed which had not even started except the submission of a part of the development plan. In these circumstances, the Appellant would not be entitled for projected loss of business opportunity. The Appellant would not be entitled to any expenses incurred in the preparation of the report of the Accountant either as such expenses would become part of the expenditure that would be taken into account in estimating the profits of the project.
[59] Although the course of action taken by the Respondent in terminating the lease of the Appellant was unlawful, the Appellant too is not without blame. The Appellant had dragged its feet in the development process, and from December 1999 to the time that the lease was terminated in October 2003, during which time they had the full use of the land, all that they had done was to have done some filling on the land and submitting a plan for the Motel Project which was only a plan for part of the development project.
[60] In the written submissions filed on behalf of the Appellant there was no basis set out regarding the claim for damages except for listing out certain items claimed as special damages nor were any submissions made regarding same before this Court. At the conclusion of his arguments in the Court of Appeal, Counsel for the Appellant when inquired by Court as to what relief the Appellant was seeking, wanted costs and when it was pointed out by Court that the Respondent had made a concession in the written submissions in the Court below which is quoted as paragraph 33 above in paragraph 53, he stated that he would wish to have same.
[61] In view of the above position, the Court will not go into the question the claim of the Appellant as set out in its amended statement of claim regarding special damages and general damages on the basis of the principles set out in paragraphs 56 and 57 above. Since the Respondent had agreed to pay the cost for Survey and Planning permission, which the Appellant had stated was a sum of $4,592.93, the Appellant would be entitled to same with interest at 4%.
[62] In the amended statement of claim of the Appellant, a claim was also made for punitive and exemplary damages. According to Halsbury's Laws of England 4th Edition, Volume 12(1) para.949 "Punitive damages (also known as exemplary damages) are unavailable in action for breach of contract". Therefore the claim made on that basis by the Appellant would not arise in this case.
Mutunayagam, JA
[63] I also agree with the proposed orders of Suresh Chandra JA.
Chandra JA
Orders of the Court
[64] The Appeal of the Appellant is allowed and the judgment of the High Court is set aside.
Orders of Court:
(1) The Appellant is entitled to a sum of $4,592.93 with interest at 4% from 2003;
(2) The Respondent shall pay the Appellant costs in a sum of $5000.
Hon. Mr Justice W.D. Calanchini
Acting President
Hon. Mr Justice S Chandra
Justice of Appeal
Hon. Mr Justice A. Mutunayagam
Justice of Appeal
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