Price et Al v Hickok

• Jurisdiction: British Virgin Islands
• Court: High Court (British Virgin Islands)
• Judge: Joseph J.
• Judgment Date: 14 April 1987
• Neutral Citation: VG 1987 HC 2
• Docket Number: No. 33 of 1980
• Date: 14 April 1987

High Court

Joseph, J.

No. 33 of 1980

Price et al

and

Hickok

Appearances:

Mr. J. Archibald Q.C., Mr. G. Farara and then Mrs. Janice Creque for plaintiffs.

Mr. Mc Welling Todman, Q.C. and Mr. Paul Webster for defendant.

Contract - Breach — Damages — Agreement to effect land improvements — Defendants committing breach by ordering plaintiff to close down operation of guest house on land, thus striking at the root of the contract — Quantum.

Joseph J.

1 By a writ of summons filed on 29th April, 1980 the plaintiffs claim –

• a. declaration that a written agreement made between the plaintiffs and the defendant whereby the defendant agreed for certain consideration to make a disposition to and for the benefit of the plaintiffs of 50% of iris interest in land improvements therein situate at Eustatia Island, British Virgin Islands, is a valid agreement binding upon the defendant:

• b. an order for specific performance by the defendant of the said agreement to make the said disposition:

• c. damages for breach of the said agreement in lieu of or in addition to specific performance.

• d. further or other relief as may be just and costs.

2 The plaintiffs claimin a statement of claim filed on 23rd September, 1981 that:

1

They are husband and wife and that the defendant is the registered proprietor of leasehold land together with a building thereon commonly known as the Arches and also as Mountain top situate at Eustacia is in the Virgin Island and recorded as parcel 2/1/3 of block 5547 A of Virgin Gorda East Registration section (the parcel). 2. the parcel was encumbered by a charge (the bank charge) registered in favour of first Pennsylvania Bank N.A. in the Virgin Island to secure the repayment by November first 1992 of a principal sum of $53, 000 together with interest on that sum by consecutive monthly instalments. 3. On March 14 and 15, 1978 in Rochester, New York U.S.A. the plaintiffs, the defendant and the defendant's son, Stephen Rae Hickok, thereafter referred to as the agent) discussed a proposal whereby in consideration of the plaintiffs assuming responsibility for paying off the bank charge and undertaking certain other financial obligations for the improvement of the parcel and building, the defendant would transfer to the plaintiffs half of his lease-hold interest in the parcel 4. the defendant stipulated that for all necessary transactions in this matter his son would be the defendant's agent with full powers to so act. 5. the parties entered into a written agreement dated 9th September, 1978, which agreement was signed by the agent. 6. In pursuance of the agreement and to tile knowledge of the defendant, the plaintiffs between the date of the agreement and January 4, 1980:- (a) paid the monthly instalments on account of the bank charge and the yearly capital sum of $6,000 for three years; (b) obtained an Aliens Land Holding Regulation Licence in the name of the male plaintiff to hold an interest in the parcel; subject to a condition that the licensees shall, within eighteen months from the date of the licence, complete and make fit for habitation, the partially constructed building and expend not less than $80, 000.00 upon labour and materials for that purpose. 7. they sold their dwelling house in the U.S.A., resigned their respective employments with Raythe on Aerospace Industry in the U.S.A. and took up residence on Eustatia Island. 8. they employed staff and workmen at their expense of the parcel and generally did all that was reasonably necessary or required of them under the agreement. 9. on 15th November, 1979 the defendant and his agent visited the parcel and told the plaintiffs that they (the plaintiffs) had done everything required of them under the agreement entitling them to the transfer of 50% interest in the parcel. 10. From October 1979 to January 1980 the defendant in breach of the agreement permitted certain of his business associates namely, Don B. Schindler and David M. Hamilton, to interfere with the plaintiffs in their work on the said parcel and prevent the plaintiffs from carrying on any business therein, despite the agent's written appeal to the defendant dated 22nd October, 1979. 11. in breach of the agreement, the defendant refused and failed to transfer to the plaintiffs the agreed half of the defendant's leasehold interest in the parcel and has thereby repudiated the agreement. Consequently, the plaintiffs were forced to leave the parcel and in March 1980 they returned to the U.S.A.

3 The plaintiffs claim special damages totalling $855,759.68. In a defence filed on 23rd February, 1982 the defendant admitted that:

1

he is the registered proprietor of the parcel. 2. about March 1978 the plaintiffs, the defendant and the agent discussed a proposal whereby the defendant would transfer to the plaintiffs half of his leasehold interest in the parcel. 3. the plaintiffs and the agent signed a document dated 9th September, 1978 described by the signatories as “a basis of agreement.”

4 The defendant denies that:-

1

the plaintiffs generally did all that was reasonably necessary as required of them under the basis of agreement and that the defendant told the plaintiffs that they had done everything required under the agreement entitling them to the transfer of 50% interest in the parcel. 2. the directors were his business associates and states that the directors were directors of the Eustatia Corporation, (the Corporation) the landlord under the lease and that he did not permit either of the directors to interfere with the plaintiffs in their work on the parcel. 3. he repudiated the agreement by refusing and failing to transfer the agreed half of the defendant's leasehold interest to the plaintiffs.

5 The defendant claims that:-

1

in addition to the so-called “agreed upon commitments” mentioned in paragraph three of the basis of agreement there was also a commitment in paragraph one of the basis of agreement that the plaintiffs would pay to the defendant a cash balance of $22,000.00 and in paragraph four a commitment that, prior to the assumption by the plaintiffs of the responsibility for paying off the bank charge and paying the cash balance to the defendant, the plaintiffs would incur a capital expenditure of $10,000.00 in completing the following projects on the parcel. i. building a new bunk room with bathroom; ii. converting the workshop to a bathroom with bath; iii. installing a freezer plate freezer; iv. construct a walkway from the house to the warehouse; v. complete hot water and electrical systems; vi. rebuild the land rover; vii. paint the house; and viii. improve the dock. 2. the $10,000.00 was to be made up of the first annual capital payment of $6,000.00 in accordance with paragraph two of the basis of agreement together with $4,000.00 of the cash payment of $22,000.00; that the plaintiffs were to make a cash payment of $18,000.00 to the defendant but despite repeated requests the plaintiffs have paid only $13,500.00 and the sum of $4,500.00 is still owed to the defendant. 3. the plaintiffs knew or ought to have known that any business operation on the parcel would have to be consistent with the covenants of the underlease under which the defendant held the parcel and which is registered as Instrument No.511A of 1977 (the underlease) a copy of which was handed to the plaintiffs before they signed the basis of agreement. 4. at a meeting held on the 25th October, 1978 in St. Croix, U.S. Virgin Islands, between the plaintiffs and the directors of the corporation viz., Donn B. Schindler and David M. Hamilton (the Directors) the plaintiffs were informed by the directors that any business operation involving a restaurant, guest house, hotel or any other business open to the public would not be permitted on the parcel. 5. he was ready and willing to perform the terms of the basis of agreement by transferring to the plaintiffs a half of his interest in the parcel but that the plaintiffs failed to fulfill the undermentioned conditions of the basis of agreement. i. failed to pay to the defendant the full amount of the cash deposit of $18,000.00 in that an amount of $4,500.00 is still outstanding. ii. failed to complete the following projects on the parcel, viz. a. building a new bunk room with bathroom; b. converting the workshop to a bedroom with bath; c. installing a freezer plate freezer; d. completing hot water and electrical systems; e. improving the dock.

6 The defendant counterclaims:

• a. for loss and damage suffered by reason of the plaintiffs' failure to pay the full amount of the cash balance.

• b. that the plaintiffs, in breach of clause (g) of the Schedule to the underlease, constructed about the end of the year 1978 two additional rooms to the existing building on the parcel, without first obtaining the written consent of the corporation: that the corporation has requested removal of the rooms and that he (defendant) will incur expenses and thus suffer loss and damage in removing these rooms.

• c. that in breach of the basis of agreement the plaintiffs have failed to repay the monthly instalments on the bank charge.

• d. special damages of $49,408.00 damages, costs further and other relief.

7 In reply and defence to counterclaim filed on 15th March, 1982, the plaintiffs deny that:-

• a. the sum of $,500.00 is due or owing to the defendant.

• b. they have failed to carry out anything required of them under the agreement.

• c. any director of the corporation on 25th October, 1978, or at any time thereabout ever informed the plaintiffs that any business operation involving a restaurant, guest house, hotel or any other business open to the public would not be permitted on the parcel.

8 The plaintiffs:-

• a. allege that the defendant and the directors of the corporation countenanced all the acts and activities before and while they were being carried out on the parcel up to October 1979;...