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Father of Health Minister loses court battle – Part III

Attorney -at-law Gregory Delzin - was brought in to act on behalf of Derek Steele

A high court judge in Grenada has thrown out a case brought by the father of Grenada’s Health Minister Nickolas Steele seeking damages amounting to nearly EC$2 million against the operators of Prickly Bay in the Lance Aux Epines area in the south of the island.

The owner of Steele’s Auto, Derick Steele took court action against Prickly Bay Waterside Limited in relation to a property transaction between the two sides that dates back to 2007.

Steele is known to have been annoyed with a building constructed by Prickly Bay which reportedly blocked out the view of his home in Lance Aux Epines.

The two sides settled the matter that went before the court and reached a compromise agreement in which Prickly Bay agreed to purchase Steele’s property and the sale was to be completed on May 18, 2009.

THE NEW TODAY understands that in accordance with clause 4 of the sale agreement, Prickly Bay agreed to pay interest in the sum of US $225,000.00 which was calculated on the balance of the purchase price in the sum of US $2,250,000.00.

The business tycoon later filed a court case seeking US$728,039.40 in interest as damages pursuant to the agreement and consent order made on 18th May 2007, with interest at a rate of 6% per annum, among other reliefs.

In response to the claim, Prickly Bay asserts that Mr. Steele is not entitled to interest on damages and in any event the claim is statute barred.

Justice Agnes Actie who heard the matter informed the parties that the main issue for determination in the case is whether Steele is entitled to payment of interest in the sum of US $728,039.40, together with interest at a rate of 6% per annum from the date of filing of the claim to present.

Steele was represented in the matter by attorney-at-law Gregory Delzin and the wife of the Minister of Health, Michelle Emmanuel-Steele while Prickly Bay retained the services of Amicus Attorneys Claudette Joseph and Ian Sandy.

As a public service, THE NEW TODAY reproduces the decision of the high court judge which went against the father of the island’s Health Minister:-

[44] Counsel for Mr. Steele raised the issue of Estoppel and submits that Prickly Bay has by its defence (1) denied there was an “agreement or understanding between the parties that settlement of the claim with the defendant fully complying with the clear terms of Henry J’s order was without prejudice to any right the claimant felt he had to pursue a fresh claim against the defendant.”; (2) averred that Mr. Steele is “estopped from re-litigating the matter or asserting any entitlement for interest as damages as claimed or at all”.

[45] Counsel submits that Mr. Steele relies on statements made in correspondence between the parties leading up to the second consent order of 4th November 2015 that there was a clear understanding and underlying assumption between the parties that the negotiation and entering into of the second consent order was without prejudice to Mr. Steele pursuing his claim for interest.

[46] Counsel contends that an estoppel by convention arose, and Prickly Bay is estopped from seeking to deny this understanding or to defeat this claim by such denial. Mr. Steele relies on the emails annexed to the claim which he believes expressly disclose the underlying assumption between the parties that led to the agreement of the consent order. Counsel submits that Prickly Bay is bound by the express terms contained in the emails which formed the basis of the underlying assumption and agreement that led to the consent order where the parties agree that the question of the claim for interest would be pursued by Mr. Steele in a subsequent action.

[47] Counsel posits that Mr. Steele’s reliance of the emails prevents Prickly Bay from disputing the right of Mr. Steele to bring the claim for interest as damages. It creates, it is submitted, an estoppel by convention. Counsel notes that in the case of Johnson v Gore Woods, the House of Lords considered that the circumstances of the estoppel by convention could also be an estoppel by representation each having the same effect, that is it would be unconscionable to allow Prickly Bay, to abandon or claim a different state of affairs either in fact or in law. Counsel relies on the learning from Halsbury’s Laws of England, where the learned authorities defined what is meant by estoppel by convention and the case of Amalgamated Investment & Property Co Ltd (in liquidation) v Texas Commerce International Bank Ltd.

[48] With respect to the issue of estoppel, Counsel for Prickly Bay argues that the rationale behind Mr. Steele’s reliance on the doctrine of estoppel is not clear. Counsel submits that there was no agreement between the parties that Mr. Steele is entitled to additional interest or to maintain this action. Mr. Steele’s claim that there was an agreement between the parties that the compromise of the appeal was without prejudice to any right that Mr. Steele had to subsequently claim interest on the balance of the purchase price is incorrect. In fact, Prickly Bay took the view and maintained it throughout the negotiations that Mr Steel had no right to interest over and above that which was stipulated in the first consent order. Counsel says that the second consent order on the appeal represents the entire agreement between the parties in compromise of the appeal. Had the parties reached such agreement as alleged, it would have been reflected in the second consent order as a specific term, especially since the parties vigorously debated the issue.

[49] In the court’s view, a fair reading of the email of 9th October 2015 reveals that notwithstanding Prickly Bay’s statement that Mr. Steele was at liberty to pursue a claim for additional interest, the court notes that Prickly Bay stated categorically that such a claim had no basis in law and would be vigorously opposed. Given the context in which this statement was written, it does not suggest that Prickly Bay agreed with Mr. Steele that he should pursue a separate claim for interest. The statement suggests the contrary. The statement placed Mr. Steele on notice that Prickly Bay did not agree that he was entitled to any further interest as damages and if he desired to pursue such a claim, it would be vigorously opposed.

[50] Therefore, the court does not accept Mr. Delzin’s contentions that the email created an understanding or agreement between the parties that, without prejudice to the settlement, Mr. Steele still had a right to pursue a separate claim for interest as damages. There appears to be no agreement to this end. Further, the court notes that the parties settlement discussions on terms of Henry J’s judgment occurred between late September 2015 and early October 2015 during the pendency of the appeal. The email correspondence also reveals that the issue of additional or further interest as damages was very much a live issue between the parties. Those discussions led to a second consent order which was entered on 4th November 2015 with no express or implied provision for the payment of interest. Therefore, the court accepts Ms. Joseph’s submission that had those settlement discussions between the parties on the issue of additional interest materialise into an understanding or agreement, such a term would have been entered as a clear term in the consent order on appeal.

[51] Given the above evidence and facts, the court is not satisfied that there was an understanding or agreement between the parties to settle the terms of the Henry J judgment, without prejudice to Mr. Steele right to file a separate claim for interest as damages. In the premises, Mr. Steele’s arguments on the principle of estoppel by convention does not arise in the circumstances. Further, the court is of the view that the consent order dated 4th November 2015 before the Court of Appeal discharged and settled the obligations of Prickly Bay under Henry J’s judgment of 26th August 2015. There are no special circumstances that give way for this present claim for additional interest as damages. Therefore, Mr. Steele is estopped from litigating an issue which could have or should have been pursued in his 2011 enforcement application before Henry J and in the consent order before the Court of Appeal. The claim accordingly fails on this ground as well.

Whether the claim for interest is statute barred.
[52] In determining whether the claim is statute barred, the issue is whether the claim for interest emanates from a simple interest debt, specialty debt or judgment debt.

[53] Prickly Bay in its defence contended that Mr. Steele’s case is statute barred as the cause of action is outside of the six-year limitation period under Section 40 of the Limitations of Action Act. Section 40 of the Limitations of Actions Act provides that no action for debt (not on specialty), shall be brought but within six years next after the cause of action.

[54] Conversely, counsel for Mr. Steele argues that the contract between the parties is a contract under seal and the consent order being a contract of record are both considered contracts by specialty. Counsel relies on the authority of Aiken and others v Stewart Wrightson Members’ Agency Ltd and others and the learning from the authors of Law of Contracts: Historical Writings in Law and Jurisprudence18. The learning provides that:

“Contracts by specialty are those which are reduced to writing and attested by seal – or, to use the common phase, contracts under seal, and contracts of record. These last are judgments, recognisances, and statutes staple. But the term ‘contracts by specialty’ is sometimes confined to contracts under seal.” (Bold emphasis mine)

[55] Mr. Delzin submits that the claim is not statute barred as Section 36 of the Limitation of Actions Act provides that the applicable limitation period to bring an action on specialties is 20 years. Section 36 of the Limitation of Actions Act states:

Limitation of actions of debt on specialties, etc.
“No action of debt for rent upon an indenture of demise, of covenant or debt upon any bond or other specialty, of debt upon any recognisance, or debt upon any award where the submission is not by specialty, for an escape, or for money levied under any writ of execution, and no action for a penalty, for damages, or for a sum of money given to the party grieved by any statute now or hereafter to be in force, shall be commenced but within the periods hereinafter expressed, that is to say: the said actions of debt for rent upon an indenture of demise, of covenant or debt upon any bond or other specialty, and of debt upon any recognisance, within twenty years after the cause of such actions; the said actions by the parties grieved, within two years after the cause of such actions: Provided that nothing herein contained shall extend to any action given by any statute where the time for bringing the action is by any statute not hereinafter mentioned specially limited.” (Underlining supplied)

[56] Further, it is submitted that actions upon the specialties in this claim include an action for general damages for breach of an obligation comprised thereunder. Mr. Steele was not only entitled to bring an action to enforce Prickly Bay’s primary obligation under the contract but is also entitled to bring an action against Prickly Bay for damages which is considered a secondary obligation.

[57] Mr. Delzin argues that the first consent order dated 18th May 2007 is a specialty debt. Given the learning above the court accepts Mr Delzin’s argument that the contract made under seal is created a binding obligation on the defendant and confirmed an interest, right and property in the claimant and accordingly attracts the twenty (20) years limitation period. In any event, the present proceedings were filed on 9th May 2016, and the first consent order was dated 18th May 2007 and crystallised into a consent order of the court and has the force and effect of a judgment of the court. Former Chief Justice Byron C. J. in the Court of Appeal case of Mirsand Town Planning and Architects Limited v Samuel S. Conde Associados C. Por. A21 “the prevailing legal principle is that the order being made by consent has contractual force.”. Therefore, Mr. Steele’s right to bring this action under the first consent order was not extinguished and was well within the twelve-year limitation period pursuant to section 30 of the Limitation of Actions.

[58] However, the claim is for interest for the late payment of the debt on 6th November 2015. Prickly Bay paid the balance of the purchase price some six years, five months and twenty days after the due date agreed in the first consent order. The claimant’s extant claim is for the payment of $728,039.40 as damages by way of interest for the period of May 18, 2009 to November 6, 2015. The parties were asked to address the court as to whether the provisions of Section 33 of the Limitation of Actions Act was applicable in the circumstances.

[59] Section 33 of the Limitation of Actions Act provides that no arrears of rent or interest to be recovered for more than six years. The section reads:

“No arrears of rent, or of interest in respect of any sum of money charged upon or payable out of any land or rent, or in respect of any legacy, or any damages in respect of such arrears of rent or interest, shall be recovered by any distress or action, but within six years next after the same became due, or next after an acknowledgment of the same, in writing, has been given to the person entitled thereto, or his or her agent, signed by the person by whom the same was payable, or his or her agent” (my emphasis)

[60] Thus, from the standpoint of the issues, the court is of the view that the limitation period for the filing of action on a specialty debt is twenty (20) years and twelve (12) years on a judgment which binds the debtor’s real estate as it applies to mortgages. Mr. Steele’s claim on the first consent order and on the judgment, debt is within the limitation period. However, Section 33 is pellucidly clear that an action for the recovery of damages in respect of such arrears of rent or interest shall not be recovered by action but within 6 years next after the same became due. It is the evidence that the defendant, Prickly Bay paid the debt in excess of six years after it became due. The court is of the view that the present action seeking interest as damages is statute barred considering the provision of Section 33. Accordingly, the claimant’s claim also fails on this point.

[61] Henry J’s judgment dated 26th August 2015 on the claimant’s enforcement proceedings ordered Prickly Bay to comply with the terms of the agreement/consent order to pay the balance of the purchase together with agreed interest. This was a judgment of the court and would have attracted post-judgment interest under section 27A of the Supreme Court Act at the rate of 6% from the date of judgment until the final payment. However, the court notes that the parties settled and discharged Prickly Bay’s obligations under Henry J’s judgment in the consent order dated 4th November 2015 before the Court of Appeal.

[62] Additionally, the court notes that the issue of interest on the delayed payment after the completion date under the first consent order was not pursued or canvassed before Henry J or on appeal in the second consent order. There must be an end to litigation. Both parties were represented by counsel, and it had always been open to the claimant to make express provision for the payment of interest on the late payment after the contractual date or to make the claim for damages in the action for the enforcement before Henry J or on appeal.

[63] Applying the legal principles to the facts of this case, this court is of the view that the claimant is not contractually entitled to accrued interest neither is he entitled to interest as damages, whether under statute or common law. Accordingly, the claim stands dismissed with costs to the defendant.

[64] For all these reasons, it is ordered as follows:

(i) The claim filed on 9th May 2016 is dismissed and

(ii) The Claimant, Derick Steele, shall pay prescribed costs to the Defendant Prickly Bay Waterside Limited pursuant to CPR 65.5, unless otherwise agreed.

Agnes Actie
High Court Judge
By the Court

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