A group of siblings have succeeded in their final appeal over being ordered to pay almost $2.5 million in compensation to a property development company that bought parcels of land in a failed development on their 70-acre estate in Maraval.
Delivering a judgment, last week, five Law Lords of the United Kingdom-based Privy Council upheld an appeal brought by Frederick Donowa, his brother Neville, his sisters Maria and Vigilia Bernar against Donridge Heights Limited.
According to the evidence in the case, when the siblings’ mother died in 1999, she left them a 70-acre plot in the St Rose Estate in Maraval.
In 2006, the siblings entered into an agreement with Howard John and his company Greenfield Properties Limited.
Under the agreement, the siblings agreed to vest the land to the company, which was required to develop it and sell subdivided parcels of land.
The siblings received a $1 million initial payment and were promised the balance of the market value of the land in its undeveloped condition and 55 per cent of the net profits from the development of the property following its completion and concluded sales.
In June 2008, Donridge Heights paid a $2.034 million deposit to Greenfield for seven lots within the development.
However, development work subsequently ceased and Greenfield “disappeared without trace”.
Donridge Heights filed a lawsuit against Greenfield and obtained a default judgment.
As the company was unable to enforce the judgment against Greenfield, it sued the siblings claiming that they should be held liable as Greenfield was acting as their agent.
In October 2014, the company’s case was upheld by former High Court Judge and current Appellate Judge Peter Rajkumar, who ordered the siblings to pay TT$2,457,770 in compensation.
The siblings challenged the outcome but their appeal was dismissed by Appellate Judges Alan Mendonca, Judith Jones, and Charmaine Pemberton in October 2019.
In their judgment, Lords Patrick Hodge, Michael Briggs, Nicholas Hamblen, Ben Stephens, and David Richards disagreed with the findings of both local courts.
“Much of the reasoning of both the judge and the Court of Appeal appears to be reliant upon an assumption that, having retained legal title to the property, and not having been paid for it in full, the appellants must be taken to have clothed Greenfield with their authority to sell lots to end-users, thereby necessarily constituting Greenfield as their agent for that purpose,” Lord Briggs, who delivered the Board’s reasoning, said.
“The Board prefers the analysis that, despite deferment of part of the purchase price, the 2006 Agreement conferred immediate beneficial ownership of the property upon Greenfield, which was free to develop, divide and on-sell it to sub-purchasers, like any buyer of land can do under an uncompleted contract for sale, with power to direct to whom the appellants should transfer legal title, subject to their unpaid vendors’ lien,” he added.
Lord Briggs stated that there was no agency between the siblings and Greenfield in the 2006 agreement, which indicated that the land was essentially sold to Greenfield.
“Although the 2006 Agreement is not expressly labelled a contract of sale, or of agency, there are a number of tell-tale indications within it that it is in substance a sale, in addition to the clear impression to that effect derived from looking at the consequences for the parties of its performance,” Lord Briggs said.
The outcome of the case means that Donridge Heights is unable to recoup its investment in the failed development.
The siblings were represented by Navindra Ramnanan and Riaz Seecharan. A representative of the company did not appear in the appeal and it was unrepresented.