Bartlett v Hai Way International Company Ltd [2011] SBCA 1; Civil Appeal 18 of 2010 (9 May 2011)

IN THE SOLOMON ISLANDS COURT OF APPEAL

NATURE OF JURISDICTION: Appeal from Judgment of the High Court of Solomon Islands (Family Name of HC Judge, J.)

COURT FILE NUMBER: Civil Appeal Case No. 18 of 2010 (On Appeal from High Court Civil Case No. 258 of 2007)

DATE OF HEARING: 3 May 2011
DATE OF JUDGMENT: 9 May 2011

THE COURT: Auld P
McPherson, CBA, JA
Williams, JA.

PARTIES:

ALEX BARTLETT
Appellant

V

HAI WAY INTERNATIONAL COMPANY LTD
First Respondent

AND

LEE KWOK KUEN & COMPANY LTD
Second Respondent

ADVOCATES:
Appellant: Keniapisia

Respondent: Tegovota for 1st Respondent
Dr. Tagini for 2nd Respondent

KEY WORDS: Contract – agreement in principle – further negotiation regard – void for uncertainty.

EX TEMPORE/RESERVED: Reserved
ALLOWED/DISMISSED: Dismissed
PAGES: 1 – 4

JUDGMENT OF THE COURT

BARTLETT v HIGHWAY INTERNATIONAL LIMITED and
LEE KWOK KUEN & COMPANY LIMITED

1. The appellant appeals against the decision of Chetwynd J. holding that the document of 28 February 2007 headed Memorandum of Understanding and signed by the appellant and first respondent was not a binding contract.

2. Prior to February 2007 the appellant and first respondent had been in dispute over certain lands and litigation had been commenced to resolve the issue in dispute. It was against that background that the document came into existence. In it the first respondent is described as “the complainant” and the appellant as “the respondent”.

3. The document is headed “Memorandum of Understanding” and after reciting the background there were seven clauses. It was stated the parties “hereby expressly agree” to those provisions. The following are the relevant clauses for present purposes:

1. That the matter as between them shall be settled amicably out of Court hence upon the signing of this Understanding the complainant shall forthwith cease all its endeavours to bring it before the Court.

2. Notwithstanding paragraph (1) hereof, it shall be condition precedent that the title to the said land be rectified to show the complainant as the legal owner failing which the complainant shall not be bound by the terms alluded thereto in paragraph (1) hereof

....

4. The complainant agrees in principle to partition the land subsequent to the rectification and allot to the respondent a portion thereof.

5. The portion that shall be so allotted to the respondent shall be identified by way of mutual negotiation and agreement by both parties at a later date subsequent to the completion of the rectification and registration of the complainant as the registered title holder of the land.

6. Further in consideration, the respondent shall also allot to the complainant a block of land within his estate at Tasahe.

4. Chetwynd J. found that the condition precedent in clause 2 had been satisfied by steps taken by the appellant. The judge then referred to the use of the words “in principle” in clause 4 and held the phase had “its natural meaning”. As he put it: “so far as a transfer of land....is concerned, the parties reached an agreement in principle only.....There was no complete or completed agreement” that the first respondent would transfer land to the appellant and that the appellant would transfer other land to the first respondent.

5. The judge arrived at that conclusion because “the details were left unsettled.” That led him to conclude that “the parties completed a contract to negotiate” which was “too uncertain to be enforced”.

6. On appeal it was submitted that the reasoning of the judge indicated that the meaning he attributed to the words “in principle” was central to his final conclusion.

7. As the passages quoted above from the judge’s reasoning demonstrate that is not so. It was the uncertainty as to the portion of land referred to in clause 4 and the block of land referred to in clause 6 which led to the conclusion that the purported contract was void for uncertainty. Clause 5 on its face in indicates that the portion referred to in clause 4 had to be “identified by way of mutual negotiation”. In other words there had to be further agreement before any land could be transferred. Even if the words “in principle” did not appear in clause 4 the result would be the same. But having said that, it is correct to say that the words “in principle” strongly suggest that no final agreement had been reached.

8. Counsel for the appellant submitted that the words of the document were clear and that can be accepted. It may also be accepted, as submitted for the appellant, that the document evidenced an intention to settle the pre-existing dispute and that the settlement would involve the transfer of land. But those considerations do not result in the document evidencing a binding contract if it is otherwise clear that further agreement is necessary before the settlement can be perfected.

9. The fact that the condition precedent in clause 2 has been satisfied does not assist the appellant. If further agreement is necessary before the provisions of clauses 4, 5 and 6 can be carried into effect the document is not a binding and enforceable contract.

10. There is no error in the reasoning of Chetwynd J. The lands to be transferred to give effect to clauses 4, 5 and 6 could only be identified by further agreement between the parties. The purported agreement evidenced by the document dated 28 February 2007 is therefore void for uncertainty.

11. The appellant abandoned ground 2 in the amended notice of appeal and only argued ground 1, namely that the learned that judge erred in finding that the memorandum dated 28 February 2007 was void for uncertainty and could not be enforced.

The appeal must be dismissed with costs.

Sir Robyn Auld
President

McPherson, CBE, JA
Member

Williams, JA
Member