Honiara Refrigeration Air Conditioning v Leong [2007] SBHC 59; HCSI-CC 198 of 2004 (11 June 2007)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 198 of 2004

HONIARA REFRIGERATION AIR CONDITIONING

v

PATRICK LEONG

Date of Hearing: 8 & 14 May 2007
Date of Judgment: 11 June 2007

P. Lavery for the plaintiff.
A. Radclyffe for the defendant.

JUDGMENT

Brown, J: By statement of claim the plaintiff pleaded specific performance of a contract for the sale of a commercial parcel of land at Ranandi. The plaintiff had been using the premises and land for its refrigeration business leading to and since the time of a document dated 9 October 1995 which the plaintiff pleads as a sufficient note or memorandum for the purposes of s. 117(2) of the Land and Titles Act to justify this courts order directed to the defendant to specifically perform his contract for sale.. In part performance of the contract, the plaintiff paid moneys to the defendant in the sum of $390,000 and claimed an additional sum of $50,000 for "work done and materials provided" the defendant at the defendants request. The contract price was $450,000. No moneys have been paid since the year 2000.

The plaintiff further pleaded that by notices sent the plaintiff on the 17 March 2004 and 10 May 2004, the defendant was guilty of trespass, for the notices asserted rights of possession as a landlord and threatened to sell the property to some else.

The defendant admitted that the plaintiff had been in occupation of the property with the defendant’s knowledge and consent since 1995 as a tenant. The defendant joined issue with the plaintiff over the sufficiency of the "note or memorandum" in terms of s. 117(2) of the Land and Titles Act, but admits a contract dated 9 October 1995 with one "James John Cheffers" whereby Mr. Cheffers agreed to buy the property at Ranandi for $450,000 payable by instalments for $100,000 in September 1995 with the balance payable by instalments of $10,000 per month thereafter. The due date for payment was September 1998 and the plaintiff has breached the contract as to payment. In the alternative (since the plaintiff company was not named on the document pleaded as the contract for sale dated 9 October 1995) the defendant says, the plaintiff is barred by laches from claiming relief against the defendant for it would be inequitable and unjust to grant such relief. Trespass is denied.

The Evidence

The document on which the plaintiff relies as a "note or memorandum" was exhibited. Headed "Agreement", it recites an agreement between Patrick Leong and James Cheffers of Honiara Refrigeration and Air Conditioning.

It further recites that the cost of the workshop on sale is $450,000 and Mr. James agrees to pay $100,000 initially and minimum monthly payments of $10,000 every month until he pays it off.

Both individuals signed the paper dated 9 October 1995 and stamp duty of $200 was paid, on the 8 March 2007.

In argument, and on the evidence, there was no issue about the description of the "workshop on sale" being the property at Ranandi. The defendant has raised the issue of sufficiency in terms of s. 117(2) of the Act. Certainly there is no evidence who actually owns the property the subject of the proposed sale.

Mr. Radclyffe says the plaintiff is a legal entity in its own right. The document does not afford rights to the company, Honiara Refrigeration and Air Conditioning Ltd. Mr. Cheffers did not sign for the company but as an individual. Any agreement was with Mr. Cheffers. With that I agree.

In addition, it is not proven from where Mr. Cheffers sourced his funds to pay moneys to Mr. Leong although receipts were made out to both Mr. Cheffers and H.R.A.C. There is no note or memorandum on which the plaintiff can rely in terms of s. 117(2) of the Act. The plaintiff must fail on that point. (SI Housing Authority v Onio Court of Appeal No. 2/89 dated 11 December 1989).

If I should subsequently be shown to be wrong, I should also say that the agreement by Mr. Cheffers has been breached in a material part, for the requirement to meet the instalments is a condition of the contract. Specific performance is an equitable remedy and in these circumstances I am not satisfied the plaintiff is entitled to the remedy.

By refusing to place the contract back on foot after the two letters of demand, (for that no balance of money owing was offered nor transfer document tendered) the plaintiff has been guilty of laches, and is disentitled to relief.

It cannot avail the plaintiff to more recently submit an invoice for work done and materials supplied so long ago and expect it now to be unilaterally offset against the balance of moneys owing under the agreement without the defendant’s earlier consent to that course and agreement as to the value of the debt itself, at the time the work was done.

Mr. Lavery’s argument that possession is 9/10ths of the law cannot avail in circumstances where the Statute of Frauds, reflected in s. 117(2) of the Act applies. Where land is to be purchased, strict compliance is necessary and the court cannot circumvent the requirements of the Act for a proper note or memorandum between the parties to be bound, notwithstanding the parties’ apparent cavalier approach at the time. The balance of moneys was due for payment in 1998. Despite Mr. Cheffers assertion that the two demands caused the breakdown in relations between the two men, the fact is that the agreement by Mr. Cheffers to pay $415,000 had been breached, earlier and the later notices of demand, however worded cannot be pleaded as justification for refusal to pay or tender a transfer.

There shall be a verdict and judgment for the defendant. The plaintiff shall pay the defendants costs.

THE COURT