Spiricor of Saint Lucia Ltd Appellant v (1) The Attorney-General of Saint Lucia (2) Hess Oil St.Lucia Ltd Respondents [ECSC]

JurisdictionCaribbean States
CourtEastern Caribbean Supreme Court
JudgeBYRON, C.J.[Ag.].,C. M. DENNIS BYRON,Chief Justice [Ag.],SATROHAN SINGH,Justice of Appeal,ALBERT REDHEAD
Judgment Date26 May 1997
Judgment citation (vLex)[1997] ECSC J0526-1
Docket NumberCIVIL APPEAL NO.3 OF 1996
[1997] ECSC J0526-1

IN THE COURT OF APPEAL

Before:

The Hon. Mr. C. M. Dennis Byron Chief Justice [Ag.]

The Hon. Mr. Satrohan Singh Justice of Appeal

The Hon. Mr. Justice Albert Redhead Justice of Appeal

CIVIL APPEAL NO.3 OF 1996

Between:
Spiricor of Saint Lucia Limited
Appellant
and
(1) The Attorney-General of Saint Lucia
(2) Hess Oil St.Lucia Limited
Respondents
Appearances:

Mr. Dexter Theodore for the appellant

Mr. Parry Husbands Q.C. and Mr. Winston Hinkson for the first respondent

Mr. Michael Gordon for the second respondent

BYRON, C.J.[Ag.].
1

This is an appeal against the judgment of D'Auvergne J. delivered on the 30 th April, 1996 dismissing the appellant's case against both respondents and the first respondent's counterclaim.

The Dismissed Claims
2

The appellant claimed to be entitled to Declarations that. the appellant is the owner and entitled to possession of the Cul-de-Sac Distillery and is entitled to delay payment of the balance of the purchase price until the disturbance of his possession ceases to exist by virtue of a deed of sale dated 20 th July, 1987 evidencing that the first respondent sold certain registered lands, buildings and equipment, known as the Cul-de-Sac Distillery to the appellant (with a balance on the purchase price to be paid over five years, secured by Privilege of vendor); and to a further declarartion that the agreement for sale made on 1 st February, 1990 whereby the first respondent wrongfully agreed to sell the said Cul-de-Sac and other lands to the secondent respondent is null and void. The appellant also claimed Special Damages for eviction or conspiracy in the sum of $86,625,000.00 and general and exemplary damages on the basis that the second respondent aided and abetted by first respondent wrongfully evicted the appellant from the premises and by their agreement the two respondents conspired to injure the appellant by causing the first respondent to break its contract of sale.

3

The first respondent counter-claimed for Recission of a Memorandum of Understanding it made with the appellant for the development of the said distillery, the refund of $212,015.43 being moneys expended to secure the distillery after the appellant failed to supervise, utilize or maintain it and damages.

The Background
4

The background facts are that in 1974 the Government of St. Lucia (the first respondent) had granted concessions to the Intercontinental Distilleries Ltd. for the production of industrial and beverage alcohol. That company after commencing its operations ran into financial difficulties and was forced into liquidation by its creditors. In 1984 the first respondent purchased the entire property at a price which was accepted by the secured creditors. The Government's title to the land was registered under the Land Registration Act 1984. In 1986 Mr. Pierre La Traverse, the former owner of Intercontinental, made an offer to purchase and develop the property on behalf of the appellant. The first respondent entered into a Memorandum of Understanding which was not exhibited at the trial, and its terms were not proved in any other way. On 1 st July 1987 an Aliens Landholding Licence was granted to the appellant in respect of the said property. On 20 th July,1987 the deed of sale was executed. This deed evidenced that the sale was for the sum of U.S.$1,130,000.00 of which U.S.$250,000.00 had been paid and that the appellant covenanted to pay the balance of U.S.$880,000.00 together with interest at 11% within five years secured by Privilege of Vendor. On 25 th July 1987, the Fiscal Incentives (Spircor of Saint Lucia) Order,1987 was passed. There were various other actions taken by the first respondent to facilitate the project.

5

It was accepted by all sides that the appellant went into occupation of the property. This occupation was characterised by the presence of its Distillery Manager, Mr. Allan Hurley, the taking out of insurance policies and the employment of Security personnel. However, there was an early indication that all was not well. On 21 st August 1987, a letter written to Mr. La Traverse by solicitor Vernon Cooper was copied to the Prime Minister. This accused Mr. La Traverse of not remitting the money to pay the stamp duty and thereby causing the non-registration of the deeds and jeopardising the first respondent's security. It referred to the fact that cheques for his conveyancing fees and for insurance premiums had bounced.

6

On 3 rd November 1987 Mr. Cooper officially informed the Government that the appellant had not put him in funds to register the security in accordance with the laws relating to the Registration of Real Rights. The importance of this is based on the Civil Code which provides as follows:

Article 1906

"The vendor has a privilege upon the immovable sold for the price due to him…

Article 1907:

"With regard to immovables, privileges produce no effect among creditors, unless they are made public in the manner determined in the Book respecting Registration of Real Rights, saving the exceptions therein mentioned."

7

The privilege of the vendor is not excepted from registration, so that the appellant's solicitor was giving due warning to the first respondent that the appellant's obligation to pay the balance of the purchase price was not secured in the agreed manner.

8

Mr. Hurley left St.Lucia in September 1987 and never returned. It appears that after he left the wages of the security personnel were not paid. Mr. Lisle Chase who gave evidence for the appellant said that he had been the secretary of the appellant company until he ceased when his fees had not been paid. He remembered that four watchmen came to his office on more than one occasion for payment but he was unable to pay them because he was not put in funds. He said that he paid the watchmen on one occasion when he got money from the company but he does not recall what year that was but it certainly after the deed of sale was signed.

9

It was accepted that the first respondent paid salaries and wages for the security personnel working on the property in the sum of $125,858.43, insurance premiums in the sum of $55,986.00 and legal fees totaling $30,171.00. from the 10 th August, 1988 to 31 st March, 1990.

10

On 28 th January, 1988 Barclays bank applied to the first respondent for a refund of the sum of $228,825.00 alleging that in good faith it had negotiated a personal cheque issued by Mr. La Traverse on a Canadian Bank and issued a Bankers cheque in favour of the Accountant General for the payment of Aliens Landholding taxes, and that the personal cheque had not been honoured and despite other actions and promises it had not recovered the advance.

11

Eventually, on 9 th August, 1988 the Prime Minister wrote Mr. La Traverse. The letter included this paragraph:

"Because of your failure to meet numerous undertakings previously given by you regarding the distillery, including the non-payment of (1) interest, (2) the insurance on the property, (3) the worker's wages, (4) your attorneys fees and (5) the dishonouring of one cheque presented to pay the Alien's Licence fees, Government no longer has any confidence in your ability to meet your commitments to get the distillery operational and consequently is terminating any agreement Government may have made for the sale of property to your company.

Government intends to repossess the property on 15 th August, 1988. Government however as an ex gratia gesture will refund you in full the deposit made on the purchase price and will pay to Barclays Bank the cheque which has been dishonoured by the Bank upon which it was drawn, and which is now the subject of litigation in St. Lucia."

12

On the 15 th November, 1989 the Government did make the refund to Barclays Bank.

13

Subsequent to the letter from the Prime Minister of 9 th August, 1988, the appellant embarked on correspondence asserting its rights and offering to complete its obligations, and indicating an intention to enforce its right under the Memorandum of Understanding to Arbitration by the International Center for the Settlement of Investment Disputes under the auspices of the World Bank. In my opinion the ensuing correspondence from the appellant reinforced the impression that they could not meet their commitments. The overall impact was that the appellant was unable to meet its commitments, was unable to find any investor willing to do business with them, and was seeking to renegotiate a fresh arrangement with the Government.

14

I will refer to a few extracts from the correspondence on which these impressions are based.

15

On the 11 th August, 1988 responding to the letter of 9 th August, 1988, in which the Prime Minister said that the first respondent was terminating the contract for the sale, Mr. La Traverse wrote:

"At our meeting of June 20, 1988, I introduced to you Robert Whyte, of Whyte Equity Corporation, and Carson J. Wynne of General Discovery & Supply Company Limited. You indicate in your letter that one of these gentlemen has sent you "privileged and confidential" correspondence stating that his company had terminated discussions with me and had no further interest in the project. As recently as July 28, 1988, Mr. Whyte made an offer to purchase outright my interest in the project. Negotiations are not terminated."

On 17 th August, 1988 Mr. La Traverse wrote:

"For the last few days, I have explored with a major International distiller the sale of the property to them."

16

On 19 th September, 1988 Mr. La Traverse wrote:

"Mr. Prime Minister we would like to repeat that no one, including the Tri Star Group, can deal directly with your Government for this property. We have indicated to you our desire to sell outright or lease with a purchase option, the Cul-de-Sac property……

A formal proposal for a lease of the property was made by Spiricor to Tri Star on April 4, 1988. Tri Star terminated...

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