Michael Phillip Ullmann v Lars G. Abrahamsson
| Jurisdiction | St Vincent and the Grenadines |
| Judge | Farara JA |
| Judgment Date | 16 December 2022 |
| Neutral Citation | VC 2022 CA 2 |
| Docket Number | SVGHCVAP2018/0010 |
| Court | Court of Appeal (Saint Vincent) |
The Hon. Mr. Gerard St.C. Farara Justice of Appeal [Ag.]
The Hon. Mde. Margaret Price Findlay Justice of Appeal [Ag.]
The Hon. Mr. Sydney A. Bennett Justice of Appeal [Ag.]
SVGHCVAP2018/0010
THE EASTERN CARIBBEAN SUPREME COURT
IN THE COURT OF APPEAL
Civil appeal — Contract Law — Joint venture — Unsigned written agreement — Elements of a valid contract — Inadequate pleadings — Part 10 of the Civil Procedure Rules 2000 — Whether pleading of ‘consensus’ enough to establish a binding agreement — Whether the appellant established a binding agreement between the appellant and the first respondent — Whether first respondent was under a contractual duty to account to the appellant — Section 3 of Registration of Documents Act — Whether the judge ought to have made an order restoring the appellant to the Board of Directors of LUMA
The appellant, Michael Phillip Ullman, commenced a claim against the respondents Lars Abrahamsson (“the first respondent”) and LUMA LTD. (“LUMA”) by Fixed Date Claim Form (“FDCF”) seeking certain declarations and orders. At paragraph 4 of his statement of claim, the appellant pleaded that in 2007 he had several discussions with the first respondent in respect of a proposed joint venture investment project involving mainly the purchase and sale of real estate by participating in a land development programme organized by the Government of Saint Vincent and the Grenadines. It was the appellant's pleaded case at paragraph 5, that in accordance with the said discussions and negotiations the appellant and the first respondent arrived at a ‘consensus which they reduced into writing in the form of an agreement dated 29 th August 2007' (“the unsigned written agreement”) or (“the written agreement”). The appellant also pleaded that ‘the principal framework of the written agreement was that the appellant and the first respondent would establish a jointly owned limited liability company to be called ‘LUMA LTD’, to be based in Bequia in the State of Saint Vincent and the Grenadines’, and to operate on the terms and conditions set out at sub-paragraphs (1) to (8) of paragraph 5 of the statement of claim. The said written agreement dated 29 th August 2007, which was not signed, was exhibited and marked “M.P.U.1” to the affidavit of the appellant which was filed on the same day and accompanied the Fixed Date Claim Form and statement of claim. The unsigned written agreement contained terms and conditions concerning the ownership, purpose, capitalization, operation, and future split of profits of LUMA. It also contained provisions not pleaded by the appellant at paragraph 5 of the statement of claim as the terms and conditions of the alleged written agreement between the appellant and the first respondent.
The unsigned written agreement contained provisions relating, inter alia, to TERRA CARIBBEAN (a company incorporated in the Grenadines as CASA LTD) acting as the real estate agent when LUMA buys and sells real estate, the ownership of TERRA CARIBBEAN, and the investment by the first respondent of all commissions due to TERRA CARIBBEAN as equity in LUMA, and the release of the said commissions to TERRA CARIBBEAN ‘when each project is completed, sold out and all money collected’, less a retention by TERRA CARIBBEAN of 8% accrued interest on the commissions invested in LUMA. The unsigned written agreement also provided at paragraph 6 for GRECO LTD to ‘administrate the operation of LUMA’ and to be ‘paid a sum which equals 2% on working invested capital’, which sums were to be used by GRECO LTD ‘to pay for rent of office, telephone, fax, internet services and other related expenses such as transportation and administration.’ Paragraph 8 of the unsigned written agreement stipulated: ‘Any profits, commissions and fees from the operation of LUMA LTD to [the first respondent] will be regulated in a separate agreement between LA [the first respondent] and TERRA CARIBBEAN/GRECO LTD.’
There was no pleaded case and no evidence was adduced at trial in relation to who drafted or prepared the unsigned written agreement, nor was any signed version produced during the proceedings or at the trial in the court below.
The appellant did not plead in his statement of claim any oral agreement between himself and the first respondent, nor were any particulars pleaded as to the discussions and negotiations between them in 2007 leading to the ‘consensus’. The only evidence produced of the discussions prior to the alleged consensus and written agreement, was a two-page document sent by the first respondent to the appellant by email dated 21 st August 2007. This document was said by the first respondent in his said email to be a ‘general proposal’ on how to proceed with the discussed joint venture, and invited the appellant's comments and inputs thereon. No evidence was led as to what, if any, response or comments or inputs the appellant may have made to the said proposal. LUMA was not a party to the said unsigned written agreement and the appellant did not plead how or under what circumstances LUMA became bound by the alleged agreement between himself and the first respondent. Likewise, the entities TERRA CARIBBEAN/CASA LTD and GRECO LTD were not parties to the unsigned written agreement.
The appellant pleaded at paragraph 12 of the statement of claim, that ‘in keeping with [his] undertaking to provide the working capital for LUMA’, he had, between 7 th September 2007 and 19 th December 2007, transferred to the first respondent, in five unequal tranches, particulars of which were set out therein, the total sum of US$ 570,473.00 (equivalent to EC$ 1,553,545.51). At the trial no documentary or other evidence of these pleaded bank money transfers or of any such payments or transfers were put into evidence by the appellant. This was so even though the appellant had both at paragraph 12 of his statement of claim and at paragraph 13 of his affidavit filed 15 th December 2014, stated or averred that he can provide details of the said money transfers in the event that the first respondent or anyone else is minded to dispute his figures.
The appellant also pleaded that pursuant to the terms of the alleged written agreement, the first respondent had a contractual obligation, as did LUMA, to account to him in relation to the joint venture, and in relation to two real estate transactions undertaken by LUMA, and to share the profit derived therefrom with him in accordance with the terms of the said contract. His case was that both the first respondent and LUMA had breached that obligation. The appellant also claimed that the first respondent has been guilty of oppressive conduct towards him, in that he and his wife had wrongfully removed the appellant from the Board of Directors of LUMA against his will, and that the first respondent and his wife have been operating LUMA without regard to the appellant's interests.
In their joint defence, the respondents admitted the main (or opening) part of paragraph 5 of the statement of claim that in accordance with the discussions and negotiations between the appellant and the first respondent in 2007 they ‘arrived at a consensus which they reduced into writing in the form of the unsigned written agreement.’ The respondents however pleaded that they had not seen a signed written agreement, but did not deny or admit having previously seen the unsigned written agreement.
The respondents also admitted at paragraph 28 of their joint defence, that the sums of money sent by the appellant ‘represents part of the investment in [LUMA]’, but did not admit to any of the specific sums or to the total sum pleaded by the appellant at paragraph 12 of the statement of claim. The respondents also pleaded in their joint defence that the appellant ‘withdrew from his commitment to invest the initial funds and the project came to a stop several years ago.’ The respondents also pleaded at paragraph 52 of the joint defence that in discussions between the first respondent and the appellant regarding the joint venture, the latter ‘had no more interest in any investments in Saint Vincent and the Grenadines and agreed to accept a lump sum from his investment once the land is sold. Therefore, the first respondent removed him as a director of LUMA and if [the appellant] so wishes [the first respondent] can reinstate [the appellant] as a director but will at the same time remove [the first respondent] and his wife as directors.’
The learned judge identified three issues for consideration and determination. These were whether the first respondent or LUMA has breached the purported agreement between him/it and the appellant; whether the first respondent and/or LUMA have operated in breach of a duty to account to the appellant for the financial management of LUMA; and to what relief is the appellant entitled.
The learned judge found that the unsigned written agreement cannot be accepted as a written agreement that is binding on the appellant or on LUMA, and that it will have limited evidentiary weight unless there is other evidence which collectively establish a prima facie case. The learned judge also found that while there was a valid offer and acceptance between the appellant and the first respondent, it is not clear what was actually offered and accepted, apart from a consensus to engage in a joint venture investment project for the purchase and re-sale of land through LUMA. The judge also found that the consideration for any such agreement is unclear, as is whether the first respondent intended to enter into legal relations. She concluded that the ‘arrangement was seemingly so informal and unstructured as to appear to have been based on a changing paradigm.’ Accordingly, the judge found that there was no valid and legally binding agreement between the appellant and the first respondent...
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