Williams v Smith

• Jurisdiction: St Vincent and the Grenadines
• Judge: Thom, J.
• Judgment Date: 08 December 2008
• Neutral Citation: VC 2008 HC 54
• Date: 08 December 2008
• Court: High Court (Saint Vincent)
• Docket Number: 321 of 2006

High Court

Thom, J.

321 of 2006

Williams

and

Smith

Appearances:

Mr. S.E Commissiong for the claimant.

Ms. E. St. Hillaire Bruce-Lyle for the defendant.

Real Property - Agreement for sale — Defendant permitted to occupy dwelling house pending completion of sale — Failure to complete — Whether claimant was entitled to compensation for use and occupation of the property.

Thom, J.

1 In January 2003, Harley Williams agreed to sell his property situate at Diamond in the State of St. Vincent and the Grenadines and Allan Smith agreed to purchase the said property. They agreed that the purchase price would be determined based on the valuation of the property by Mr. Sebastian Alexander. The parties also agreed that Allan Smith would purchase the furniture separately. Allan Smith was permitted to occupy the dwelling house pending the completion of the sale. The property was valued by Mr. Alexander for the sum of $430,884.00. The agreement for sale was not concluded. Allan Smith vacated the property after occupying same for forty months. The property was sold subsequently to a third party. On July 28th 2006 Harley Williams instituted proceedings claiming $160,000.00 being rent for forty months at a rate of $4,000.00 per month and alternatively for use and occupation of the property

2 Allan Smith in his defence admitted that he was in occupation of the property for forty months but alleged that he was permitted by Harley Williams to occupy the property pending the completion of the sale of the property to him. There was no agreement for rent or any compensation to be paid to Harley Williams for use or occupation of the property.

ISSUE

3 While Harley Williams in his claim form claimed $160,000 for rent and alternatively for use and occupation, it was agreed that there was no agreement for the payment of rent. The trial therefore proceeded as a claim for compensation for use and occupation.

4 The sole issue therefore is whether Harley Williams is entitled to be paid compensation by Allan Smith for use and occupation of the property for forty months. If he is entitled for compensation, what sum should be awarded to him?

EVIDENCE

5 Harley Williams gave evidence on his own behalf, he called no witnesses. Allan Smith gave evidence on his own behalf, and he called two witnesses being Arnott Edwards and Bertram Arthur.

6 Having considered the evidence of Harley Williams, Allan Smith and his witnesses, I found Allan Smith and his witnesses to be credible witnesses. Where their evidence differs from Harley Williams' evidence I accept their evidence.

7 During his testimony Harley Williams was, on occasions, very evasive in his answers, and his testimony, in relation to the US $25,000.00 that was paid to him, was contradictory. In his evidence-in-chief, he stated in effect that the furniture was to be sold separately and Allan Smith agreed to pay US $25,000 for them and the sum was paid to him in New York. This was consistent with his statement of case in which he pleaded that the US $25,000.00 was for the furniture. However under cross-examination he was adamant that the US $25,000 was a down payment on the purchase price. I do not believe him. Arnott Edwards who is a friend of both Harley Williams and Allan Smith and who had participated in the discussions for the sale of the property testified that the US $25,000 was for the furniture. His testimony was not challenged by Harley Williams. In fact, counsel for Harley Williams declined to cross-examine Arnott Edwards.

FINDINGS OF FACT

8 It is not disputed that Harley Williams agreed to sell his property at Diamond, and Allan Smith agreed to purchase same. The purchase price was to be based on the valuation of the property by Sebastian Alexander. The furniture in the house was to be valued separately. Allan Smith was let into occupation by Harley Williams pending the conclusion of the sale. There was no agreement for the payment of rent pending the conclusion of the sale. Indeed there was no discussion of any payment pending conclusion of the sale. Allan Smith paid Harley Williams in the United States US $25,000. For the reasons which I explained earlier I find that this sum was for the purchase of the furniture. It is also not disputed that Sebastian Alexander valued the property for $430,884. The sale was not completed after the valuation was done. Indeed the sale was not concluded between Harley Williams and Allan Smith. Allan Smith became engaged in divorce proceedings. His assets were frozen and this was communicated to Harley Williams.

9 Harley Williams decided to await the finalisation of Allan Smith's divorce to complete the sale. This was a period of about 3 years. Under cross examination Harley Williams explained why he waited as follows:

“Mr. Smith constantly in that period of time told me he would not proceed because his assets were frozen because of legal matters in New York and as far as he is concerned the matter would be resolved quickly, and please hold on while I get this matter resolved”.

And later:

“Because Mr. Smith had shown good faith by paying US $25,000.00 towards the purchase, he had expressed the view he had requested that I not proceed any further until he gets his personal matter resolved, and I took decision at that time. Mr. Smith given the relationship that we had I decided I would not pursue Mr. Smith whether legally or otherwise and would not offer the property for sale to any body else.”

10 Allan Smith subsequently informed Harley Williams that he would have to restructure the sale. Allan Smith sent contract documents for the sale to Harley Williams to be executed. Allan Smith was not named as purchaser on the documents and as a result Harley Williams decided not to execute the documents. Sometime earlier Allan Smith had sent contract documents to Harley Williams with Allan Smith named as the purchaser but before Harley Williams could execute them he informed Harley Williams not to do so as his assets were frozen as a result of the divorce proceedings. Subsequently, Allan Smith saw an individual taking measurements at the property and he vacated the property. He then received a letter from Harley Williams's solicitor claiming $160,000.00 for rent for the period of forty months that he had occupied the property. The property and the furniture were subsequently sold by Harley Williams to a third party.

11 At no time while Allan Smith was in occupation of the property did Harley Williams request or agreed with Allan Smith for payment for Allan Smith's use and occupation of the property. During the period of the divorce proceedings Allan Smith raised the issue of payment with Harley Williams who declined payment. Harley Williams' testimony is that he was not interested in rent but sale of the property.

12 The house was valued by Bertram Arthur who was deemed an expert to have a furnished rental value of $3,500.00 to $4,000.00 per month, and an unfurnished rental value of $2,000.00 per month. Mr. Arthur's testimony was not contradicted.

SUBMISSIONS

13 Learned counsel for Harley Williams submitted that at the commencement of the forty month period the relationship of Harley Williams and Allan Smith was that of vendor and purchaser and to some extent landlord and tenant. When Allan Smith was permitted to enter into possession as purchaser prior to completion he became either a tenant at will or a licensee, the preferred view being he became a licensee.

14 Learned counsel further submitted that compensation for use and occupation is payable where evidence showed it was agreed. Learned counsel referred the Court to Woodfall's Law of Landlord and Tenant 27th Ed. Vol. 1 Chapter 10. Harley Williams never intended Allan Smith to occupy the property free of cost until completion of the sale. When Allan Smith stated under cross-examination that he did not expect to live in Harley Williams' house rent free he admitted liability and the sole question is one of quantum.

15 Learned counsel further submitted that a vendor is entitled to compensation for use and occupation where the purchase remained in occupation after the contact for sale has been determined. Learned counsel referred the Court to the case of Howard v Shaw (1841) 8M & W 118 ER Vol. CI. 1 Exchequer Division V 11.

16 In relation to quantum of compensation learned...