Coral Isle Beach Hotel Ltd v Durand and Foster

• Jurisdiction: Barbados
• Judge: Husbands, P.J.
• Judgment Date: 17 December 1981
• Neutral Citation: BB 1981 HC 84
• Docket Number: No. 1111 of 1978
• Date: 17 December 1981
• Court: High Court (Barbados)

High Court

Husbands, J.

No. 1111 of 1978

Coral Isle Beach Hotel Ltd.

and

Durand and Foster

Appearances:

Mr. L. Greenidge for the plaintiff.

Mrs. B. Walrond in association with Mrs. V. Blenman of Messrs. Smith and Smith for the defendants.

Contract - Breach — Oral Agreement.

Contract - Breach — Damages.

Contract — Breach — Oral Agreement — Purchase of Condominiums.

Husbands, P.J.

1 The plaintiff company is the owner of a dwellinghouse and condominium units at Landsdown, Christ Church. The defendants are visitors to the Island from Holland.

2 In June 1977, in Barbados, the defendants met a Mr. Gluckstal, a director of the plaintiff company and expressed an interest in the plaintiff Company's condominium units. They were shown artist's drawings of the project setting in which the condominium units were to be sited. In October 1977 the defendants entered into an oral agreement with Mr. Gluckstal to purchase two condominium units, numbered 8 and 10. The price was Barbados $55,440 each. It was agreed that a down payment of U.S. $2,500 would be made in respect of each unit and the balance of the purchase price paid at the rate of U.S. $1,000 per month per unit over a three year period. Interest on the unpaid principal was fixed at 10 per cent. Payments were to be made through First National City Bank, Barbados.

3 It was further agreed that, if at the end of 3 years the defendants so desired, the plaintiff company would repurchase the condominium units for U.S. $28,000 each. The defendants went into possession in October 1977. According to the Bank records the down payments were duly made and the monthly installments paid from November 1977 until May 1978. Thereafter all payments ceased in circumstances which gave rise to this action.

4 At or about the same time as this agreement was entered into, Gluckstal agreed to permit the defendants to use an old dwellinghouse at the said premises free of rent for a period of 10 – 12 months. This period was dictated by the anticipation that in 12 months time the land on which the old house stood would be required for the further development of the condominium project. There is a difference between the parties as to the uses to which it was agreed the old house could be put. Gluckstal says that when the defendants informed him that they had plans to start a school of yoga dream interpretation and meditation, he offered them the use of the old house for use as a school. The old house needed to be cleaned up but he advised them not to spend too much money on it since it would soon have to give way to the project. Despite this the defendants carried out extensive repair works on the old house and began to use it as a hostel for their students. The defendants on the other hand claim that Gluckstal offered them the old house free of rent and encouraged them to use it as a hostel and restaurant, which they did. He told them that after 10 – 12 months the old house was to be demolished and advised them not to spend too much money on it. However the condition of the house was so bad that they spent $20,000 on materials and $11,000 in labour to make it habitable.

Circumstances in which old house vacated.

5 Gluckstal says that on different occasions he spoke to each of the defendants about the use by them of the old house as a hostel and restaurant. In May 1978 after further speaking with defendant Durand to no avail, Gluckstal consulted his lawyers who sent the defendants a letter dated 13th June, 1978, Exhibit “1” which reads –

“Dear Sir & Madam:

We have been instructed by our client Coral Isle Beach Hotel Ltd., the owners of a dwellinghouse situate at Landsdown, near Silver Sands, Christ Church that by agreement between Mr. Alfred Gluckstal, a director of the said Company, and yourselves permission was given to you for the use of the said dwellinghouse for a period of ten to twelve months with effect from 19th October, 1977 as a school for yoga and meditation.

Our client has instructed us that the dwellinghouse was never used for that purpose, but instead has been used by you as a hostel for the purpose of housing and accommodating guests as well as for use as a restaurant.

Our client has drawn this misuse to your attention and has shown its objection to same, but you continue to violate the terms of the permission which were given verbally.

You are now instructed to vacate the said property within seven days of the receipt of this letter failing which our client will take necessary action for the recovery of possession.

Yours faithfully,

Cottle Catford & Co.

cc: Mr. A. E. Gluckstal”

6 The defendants sought a period of extension and vacated in November 1978 but before doing so Gluckstal says they did considerable damage to the old building, tearing electrical wires and fittings from the wall, removing doors and breaking glass windows. A police sergeant was summoned and shown the damage. He spoke to the defendants. The plaintiff company seeks to recover for damage done.

7 The defendants deny that they used the old house for purposes other than those agreed. The defendants claim the plaintiff company gave them notice to vacate the old building because they had ceased the installment payments on the condominium units in May 1978. The defendants deny they did damage to the house. They said that before vacating they did remove doors, basins, water pipes and other materials and fittings they had installed but claimed that after doing this the old house was in no worse condition than it was in October 1977 when they moved in.

8 The question here however is whether the plaintiff company can succeed in respect of any damage proved to have been done to the old building. It is common ground that the old building was in a state of disrepair when the defendants moved in in October 1977. No survey or inventory of the building and its contents was taken at the time and there is nothing against which the evidence of their condition on vacation in November 1978 may be compared. On this aspect of the case the plaintiff cannot succeed.

Circumstances in which condominium installment payments ceased.

9 The defendants say that when the oral agreement was made in October 1977 it was their understanding that the plaintiff company would have a written contract drawn up and submitted for signature in due course. When in May 1978 no such contract was forthcoming they stopped payment of the installments on the condominiums. It is agreed by all that in May 1978 the defendants asked Gluckstal for the formal agreement and said they would make no further payment until they received the written contract. It is also agreed that at this time the plaintiff company instructed its attorneys-at-law to “negotiate” with the defendants. The plaintiff company contends on the other hand that it was because the defendants were given notice to quit the old house in May 1978 that they stopped payment and demanded the written contract.

10 On the evidence it is not possible to say with certainty what was the true state of affairs. What was cause and what was effect. Everything happened in the month of May. One cannot be sure which happened first, the notice to quit or the stopping of the payments. Whatever the order, there is no doubt that they were closely interrelated. Tending as I do to the defendants' version of these events one must ask was it unreasonable for them to stop the payments in the circumstances. I think not. At that time some U.S. $19,000 of the purchase price had been paid and it had been agreed that there would be a formal contract. It does not appear that the plaintiff company thought the request for a written contract unreasonable for it instructed its attorneys to “negotiate” with the defendants. As a result their attorneys sent to the defendants' attorneys Messrs. Smith and Smith, a form of agreement with a covering letter dated June 27th, 1978. The letter Exhibit “8” reads –

“Dear Sirs,

Re: Purchase of Condominium Units 8 & 10 Coral House Condominium Foster &...