The Judicial Committee of the Privy Council Decisions

Chaitlal & Ors v. Ramlal Trinidad and Tobago [2003] UKPC 12 (5 February 2003)

ADVANCE COPY

Privy Council Appeal No. 36 of 2001

(1) Joyce Chaitlal and Ganga Persad Chaitlal

(in substitution for Kanhai Mahase, deceased)

(2) Dhanierami Jaglal and

(3) Maharani Jaglal Appellants

v.

Chanderlal Ramlal Respondent

FROM

THE COURT OF APPEAL OF TRINIDAD AND TOBAGO

---------------

JUDGMENT OF THE LORDS OF THE JUDICIAL

COMMITTEE OF THE PRIVY COUNCIL,

Delivered the 5th February 2003

------------------

Present at the hearing:-

Lord Hope of Craighead

Lord Hutton

Lord Scott of Foscote

Lord Walker of Gestingthorpe

Sir Martin Nourse

[Delivered by Sir Martin Nourse]

------------------

1. This is a purchaser's action for specific performance of an open contract for the sale of land in Trinidad. The action was dismissed by Brooks J in the High Court, but the Court of Appeal (Ibrahim, Hamel-Smith and Jones JJA) allowed an appeal by the purchaser. The vendor now appeals against the decision of the Court of Appeal. As the argument before the Board developed, it became apparent that the principal question for decision is whether, at a time when no abstract or document of title had been delivered to the purchaser, the vendor was entitled to give him a notice making the time thereby specified for completion of the essence of the contract.
2. Earlier disputes having largely fallen away, the facts can be stated more briefly than was necessary in the courts below. Kanhai Mahase, the first defendant in the action, owned land at Orange Field Road, Chase Village in the ward of Chaguanas. In 1964 part of that land (not the land now in dispute) was purchased by the plaintiff, Chanderlal Ramlal. There he built a house and carried on a hardware business with his wife. Also living nearby were the second, third and fourth defendants: a father, Seegoolam Jaglal (since deceased) and his two children, Dhanieram and Maharani Jaglal ("the Jaglals").
3. Adjoining Mr Ramlal's land was another parcel of land, also owned by Mr Mahase ("the disputed land") with an area of 21,585 square feet. The disputed land was subject to three tenancies held by third parties, which, between 1969 and 1970, were acquired by Mr Ramlal, together with the chattel houses standing on the land. It appears that Mr Ramlal gave Mr Mahase notice of the assignment of the tenancies and that no objection was made by Mr Mahase. Rent was tendered by Mr Ramlal to Mr Mahase, but the amount could not be agreed. The premises being rent controlled, Mr Ramlal applied to the Rent Assessment Board for the amount of the rent to be determined.
4. On 13th October 1971 the parties attended before the Rent Assessment Board together with their respective solicitors: Mr Marcial for Mr Mahase and Mr Simbhoonath Capildeo for Mr Ramlal. Before the hearing started the parties entered into an agreement for the sale of the disputed land by Mr Mahase to Mr Ramlal at a price of $5,000. In consequence, the application for the determination of a rent was withdrawn. The agreement was embodied in a manuscript document, which, with amendments found at trial to have been incorporated before it was signed, reads as follows:

"Rent Assessment Board 13.X.71. We hereby agree for a sale to the tenant by the landlord of the parcel of land comprising 3¾ lots or thereabouts, with the access thereto, on which the three tenancies have been created for the sum of Five Thousand Dollars. In addition the tenant will pay one year's land rent, water rates and taxes."

Further words, evidently intended to describe the land by reference to the tenancies but of no significance in the present context, were added. The agreement was signed by Mr Mahase and by Mr Ramlal, who was described as "Tenant". It was witnessed by Mr Capildeo. It was found at trial that Mr Capildeo orally represented to Mr Mahase that the transaction would be completed within a period of 14 days. Although the Court of Appeal appears to have thought that that was a term of the agreement, it is clear that that was not the view of Brooks J, who said that the contract was a patently "open contract" and that no date was fixed therein for the completion of the sale. Their Lordships proceed on the judge's view of the transaction.

5. On the following day, 14th October 1971, Mr Capildeo's firm ("Capildeos") sent Mr Mahase a cheque for $59.80 in respect of one year's rent, water rates and taxes. No deposit was paid under the agreement. About 14 days after the date on which it was signed Mr Mahase went to Capildeos' office for the purpose of signing the deed of conveyance but was told that Mr Ramlal had left no instructions for the preparation of the deed. Mr Mahase went back again 10 days or so later, when he was told that a deed would be prepared soon. Nothing further appears to have happened until April 1972.
6. The remaining material evidence consists almost entirely of correspondence between the parties and their solicitors starting on 15th April 1972 and ending on 15th November 1974. In the early part of this period it was Mr Ramlal who was pressing for completion. Capildeos addressed letters to Mr Mahase dated 15th April, 29th April and 5th June 1972. In the first of these, headed "Re: Chanderlal Ramlal", they asked Mr Mahase to come to their office "with respect to the above named" and to "kindly bring all documents in your possession with respect to same". In their third letter they said that Mr Ramlal was ready, willing and able to complete the purchase. None of the three letters was answered and Mr Mahase said in evidence that he did not receive them. With some hesitation Brooks J accepted that evidence, but the Court of Appeal were of the view that his finding could not be upheld. The point was hotly contested in the Court of Appeal, but it has receded in importance before their Lordships, who do not find it necessary to express a view of their own.
7. On 19th September 1972 Capildeos wrote to Mr Marcial's firm referring to the agreement of 13th October 1971 and requesting them to use their good offices to arrange for the early completion of the sale. Again, there was no reply and Mr Mahase denied any knowledge of that letter. Almost a year later, on 5th September 1973, Capildeos wrote to Mr Mahase, this time by registered post, threatening proceedings if the matter was not resolved by 15th October. By that time Mr Marcial was dead. On 3rd October 1973 another firm of solicitors, J B Wilson & Co ("Wilsons"), wrote to Capildeos stating that they were instructed to reply to the letter of 5th September. They said:

"Our client denies entering into any written agreement as alleged in your first paragraph. Accordingly, we shall be grateful for inspection of and/or copy of the same."

8. It is agreed that the letter of 3rd October constituted a repudiation of the agreement of 13th October 1971, available for acceptance by Mr Ramlal. However, it was not accepted and on 12th December 1973 Capildeos wrote to Wilsons enclosing a photocopy of the agreement of 13th October 1971 and stating that the matter must be resolved one way or the other. They added that Mr Ramlal had "made arrangements for" the sum of $5,000 since the date of the agreement and was paying interest on the same. On 7th February 1974 Wilsons wrote to Capildeos as follows:-

"We are instructed to inform you that our client is prepared to complete the sale on the basis of the original agreement.

Please forward your engrossment to us for execution together with your client's cheque for the consideration."

9. The next letter produced in evidence was one of 14th May 1974 (see below). However, Brooks J recorded in his judgment that it was common ground that prior to that letter there was in existence a letter dated 4th April 1974 written by Wilsons to Capildeos communicating a deadline date to Mr Ramlal for completion of the purchase. Although the judge thought it abundantly clear that Capildeos duly received that letter, they did not produce it in evidence and maintained that it could not be located following diligent searches by them to unearth it. Nor could Wilsons produce a copy from their files, which had been consumed in a fire at their offices at some time prior to the start of the trial. Although the position remains obscure, their Lordships proceed on the basis, first, that a letter dated 4th April 1974 was written by Wilsons and duly received by Capildeos; secondly, that that letter did purport to make time of the essence of the contract by requiring Mr Ramlal to complete the purchase by a specified date (which must have been prior to 21st August 1974); thirdly, that the period so limited was in itself reasonable. As will appear, the question which arises in relation to the letter of 4th April is whether Mr Mahase was at that date entitled to make time of the essence of the contract.
10. On 14th May 1974 Capildeos wrote to Wilsons as follows:-

"Re: Chanderlal Ramlal –vs– Khanhai Mahase

We refer to previous correspondence re the above.

We have now obtained the survey plan with respect to the parcel of land being conveyed to our client, a copy of which we enclose for your files.

Kindly let us have the number or a copy of your client's vesting deed. Upon receipt we shall forward the engrossment and our client's cheque."

No reply having been received, on 10th July 1974 Capildeos wrote again to Wilsons enclosing a copy of their letter of 14th May. On 1st August 1974 Wilsons replied as follows:

"Further to the previous correspondence on the above subject we have been instructed to inform you that our client has decided to stand firm on the deadline communicated in ours of the 4th April, last – but will be prepared to compromise on the following conditions:-

(a) payment for the land in excess of 3¾ lots;

(b) completion by the 21st August 1974.

Our client's title deed is Numbered 575 of 1953."

11. The terms of the letter of 1st August are confirmatory both of the existence of a letter of 4th April and of its having specified a date by which Mr Ramlal was required to complete the purchase. It also proposed a variation of the contract in two respects. On 16th August 1974 Capildeos wrote to Wilsons as follows:

"Please refer to your letter of 1st August, 1974.

We are ready to complete pending the following.

(a) We cannot trace what has become of the interest of one 'Chuniah' in Deed No: 4353 of 1929.

(b) We note that land in excess includes the access road which comprises some 2000 sq. ft. and should be deducted from the original parcel contracted to be sold.

That will leave some 800 sq. ft. in excess.

Please let us hear from you before the 21st August."

12. On 5th September 1974 Capildeos wrote Wilsons a letter headed "WITHOUT PREJUDICE", in which they referred to the letter of 16th August and the agreement of 13th October 1971. Having dealt with the area of the excess land, the letter continued:-

"Having regard to (a) the fact that the issues have now been considerably narrowed in this protracted affair and (b) the relatively small pecuniary consideration payable on the excess, we shall appreciate a compromise and shall await your views by return.

Meanwhile, we have written to our clients on the issue of the extent of 'Chuniah' in Deed 4353 of 1929."

13. There was no further correspondence between the parties until 8th November 1974, when Capildeos wrote to Wilsons referring to their letter of 15th September "and the last paragraph thereof" and, as to the penultimate paragraph, requesting their views as to what sum over $5,000 they wanted. On 15th November Capildeos wrote again to Wilsons purporting to enclose their cheque for $5000 and the original deed for approval. They gave their undertaking that as soon as the balance due was agreed their cheque would be forthcoming. The judge found that no cheque was enclosed with that letter, which crossed with one from Wilsons to Capildeos, also dated 15th November. Wilsons' letter stated that they no longer acted for Mr Mahase. Soon afterwards Mr Ramlal learned that Mr Mahase had sold the disputed the land to the Jaglals for $10,000.
14. On 19th November 1974 the writ in the action was issued against Mr Mahase. The proceedings were later amended to add the Jaglals as defendants. The principal relief claimed was specific performance of the agreement of 13th October 1971; a declaration that the deed dated 5th November 1974 by which Mr Mahase had conveyed the disputed land to the Jaglals as joint tenants was void and of no effect and an order setting aside and striking it out; alternatively, a declaration that the purported conveyance to the Jaglals was subject to the agreement of 13th October 1971 and an order that the Jaglals should transfer the disputed land to Mr Ramlal.
15. The trial began on 12th April 1991 and the evidence was concluded by 10th May of that year. There were then lengthy submissions on each side which took place over a number of days between May 1991 and January 1993, when judgment was reserved. Judgment was delivered on 23rd February 1994.
16. On the question of title Brooks J observed that it was not pleaded by Mr Ramlal that Mr Mahase's title to the disputed land was defective or that the interests of Chuniah materially affected the plaintiff's title. (An application made late in the trial to amend the statement of claim in order to raise those points had been refused.) In any event the judge thought that the evidence on the whole did not disclose any defect in Mr Mahase's title. He then turned to the proof of title:

"Undoubtedly, independent of any condition for that purpose, a vendor of unregistered land (as in this case) is under a duty to deliver an abstract of title to the purchaser, and to do so within a reasonable time. What is a reasonable time is a question of fact for determination by this Court. Here, there was in the agreement no stipulation as to title. And, Mahase did not deliver an abstract of title to Ramlal in the first instance, or provide him with any information as to his title deeds. It was not until the 14 May 1974 … that Ramlal's Solicitors requested for the first time a copy of Mahase's vesting deed, as they were entitled to do. That was fairly late in the day. Nonetheless, the information was supplied by Mahase's Solicitors (Wilson & Co) by letter dated 1 August 1974 … In other words, an abstract or root of title not having been provided by Mahase within the first two or three months of the agreement, the plaintiff Ramlal or his Solicitors should have applied for it or for the necessary information as respects the title deeds at a much earlier date – rather than some 2½ years later. The plaintiff then was guilty of some neglect in failing to apply for information as to the first Defendant's title deeds at an earlier date."

17. Later, the judge referred to Wilsons' letter dated 7th February 1974, which he described as "a simple and straightforward request [to complete] – and one which could easily have been acceded to by Ramlal". He added that no information as to title had been sought by Mr Ramlal up to that stage. It was on the basis that Mr Ramlal ought to have requested such information that the judge held that Mr Mahase was entitled, by the letter of 4th April 1974, to make time of the essence of the contract. Accordingly, in his view, Mr Ramlal's failure to complete by the revised date of 21st August 1974 amounted to a repudiation of the contract which Mr Mahase was entitled to accept, and did accept, by selling the disputed land to the Jaglals.
18. Mr Ramlal having appealed to the Court of Appeal, an injunction was granted restraining the Jaglals from entering onto the disputed land pending the determination of the appeal. The Court of Appeal delivered judgment on 12th May 1999. Ibrahim JA gave a reasoned judgment, with which Hamel-Smith and Jones JJA agreed. The Court allowed the appeal, holding, first, that Mr Ramlal had not been guilty of the delay attributed to him, so that the sale by Mr Mahase to the Jaglals was unlawful; secondly, that the Jaglals were aware of the agreement of 13th October 1971 and had accordingly purchased subject to that agreement. Ibrahim JA expressed the view that the preferable form of relief would be to order the Jaglals to convey the disputed land to Mr Ramlal. Mr Mahase and the third and fourth defendants appealed against the decision of the Court of Appeal, the second defendant having died meanwhile. Mr Mahase is also now deceased and the action has been reconstituted by the joinder of the executors of his will.
19. In giving judgment, Ibrahim JA said that the real issue in the case was the effect of the letters of 4th April and 1st August 1974 and the failure to complete on the dates set out in those letters. Having referred to the obligations of a vendor under an open contract to make a good and marketable title to the property sold and to deliver an abstract of his title to the purchaser within a reasonable time after the date of the contract, he continued:

"In Trinidad, since there is a system of registration of deeds, a vendor seldom, if ever, has in his possession an abstract of title similar to a vendor in England. What happens in practice is that the vendor supplies the purchaser with information that evidences his acquisition of the land in question and the purchaser's attorney uses that information as a starting point to search the title. While therefore the onus remains on the vendor to produce a proper title, in reality the purchaser's attorney is the one who confirms whether the title is good or not. It is in this context that Capildeo, once Mahase had acknowledged the contract for sale, requested Wilson to supply the registered number of Mahase's title deed."

20. Ibrahim JA did not decide whether Mr Mahase was entitled to make time of the essence of the contract by the letter of 4th April 1974. But it seems that he thought that the answer to that question was, at the least, doubtful. The basis on which he decided that Mr Ramlal was not at fault in not meeting the deadline of 21st August 1974 was that he was entitled, by Capildeos' letter of 16th August, to raise a requisition as to the interest of "Chuniah", and that that requisition had not been answered by 21st August. Ibrahim JA concluded:

"Mahase had fixed the new date for completion and it was as a result of his failure to respond in time to Capildeo's legitimate request that the deadline was not met. It is quite clear, therefore, that Ramlal was not guilty of the delay attributed to him and the sale by Mahase was unlawful.

The Jaglals were aware of the agreement for sale to Ramlal and, therefore, they purchased subject to that contract."

21. In his argument before the Board Mr Guthrie QC, for Mr Mahase and the Jaglals, submitted that the basis of the Court of Appeal's decision was erroneous because it had not been pleaded on Mr Ramlal's behalf that Mr Mahase's title to the disputed land was rendered defective by the interest of Chuniah and, more especially, because the judge had refused leave for that plea to be raised by way of amendment. On the other side, Mr Dingemans QC, for Mr Ramlal, did not strain to support the Court of Appeal's view and even went so far as to describe the Chuniah point as a red herring. The essence of his submissions was that it was Mr Mahase, not Mr Ramlal, who was in default on 4th April 1971, so that Mr Mahase was not entitled to give a notice making time of the essence at that date.
22. In evaluating Mr Dingemans' submissions it is convenient to start by considering the agreement of 13th October 1971 as if its performance was governed by English law and conveyancing practice. Being an open contract of unregistered land which did not specify a date for completion or for the performance of any other obligation, it contained implied terms: first, that Mr Mahase had a good and marketable title to the disputed land; second, that Mr Mahase would deliver an abstract of title to Mr Ramlal within a reasonable time from the date of the contract; third, that both Mr Mahase and Mr Ramlal would complete the contract within a reasonable time from the like date. The second of those periods would necessarily be of longer duration than the first. More significantly, it would not be until after Mr Mahase had delivered an abstract that Mr Ramlal would come under an obligation to complete.
23. What differences are there in the law and conveyancing practice of Trinidad and Tobago? Mr Guthrie referred their Lordships to The Land Laws of Trinidad and Tobago (1986) by Professor J C. Wylie, who was a part-time legislative draftsman to the Government of Trinidad and Tobago between 1978 and 1982. From this it appears that, before 1981, while conveyancing in Trinidad and Tobago was based largely on the pre-1926 English system, most land there was subject to a universal registration of deeds system, registration being effected by the insertion of the original deed into the Registry books. That meant that a land-owner was unable to keep his original title documents; the most he could do was to retain copies of them. Under the heading "Investigation of Title" appear the following passages:

"2.19. Once a contract for sale was entered into, the purchaser's solicitor or barrister would usually instruct a searcher to make a search of the indexes relating to deeds kept in the Registrar General's office. The principal index was the Index of Deeds, which was essentially a 'names' index based on an alphabetical list of the names of the parties to every registered deed …

2.20. There was no system of official searches made by Registry officials, in respect of which a guaranteed certificate could be issued, as is common in other jurisdictions with a Registry of Deeds. Instead, the private searcher was expected to draw up from his searches what was in effect an abstract of title. This, it should be noted, was furnished by a searcher employed by the purchaser's solicitor or barrister and not furnished by the vendor by way of deduction of title, which was, of course, the traditional English conveyancing practice."

24. Mr Guthrie relied on those passages as support for a submission that in Trinidad and Tobago a vendor is not only under no obligation to deliver an abstract of title; he is under no obligation to provide the purchaser with any information as to the title, unless and until he is requested to do so. Their Lordships are unable to accept that submission. It is clear from the judgments in the courts below (see paragraphs 16 and 19 above) that it would not have been accepted either by Brooks J or by the Court of Appeal. Although the view of Brooks J is not as clearly expressed as that of Ibrahim JA, it seems that he thought that the vendor would be under a duty to provide the purchaser with information as to his title deeds, at any rate for the first two or three months after the date of the contract. Ibrahim JA said that what happened in practice was that the vendor supplied the purchaser with "information that evidences his acquisition of the land in question" and that the purchaser's attorney used that information as a starting point to search the title. In their Lordships' view the practice there stated must be taken to represent an obligation imposed by law on the vendor. It is inconceivable that the law, at any rate in the first instance, would relieve the vendor of all responsibility for doing what he could to satisfy the purchaser as to his title.
25. In the present case, by their letter of 15th April 1972, Capildeos asked Mr Mahase to bring to their offices all documents in his possession with respect to the transaction. Mr Guthrie sought to suggest that that request did not extend to documents of title, but if that was so it would be difficult to know to what it did extend. Between then and 3rd October 1973 the delay seems to have been all on the part of Mr Mahase. On the latter date he denied having entered into any written agreement for the sale of the disputed land. It was not until 7th February 1974 that he affirmed the agreement of 13th October 1971. Wilsons' letter of that date included a request for the forwarding of an engrossment for execution, but it is impossible to see how that could have been done without Capildeos being supplied with information that evidenced Mr Mahase's acquisition of the land, in particular a copy of, or access to, the conveyance to him of the disputed land. In their Lordships' opinion, on 7th February 1974 Mr Mahase came under a duty to give that information to Mr Ramlal; conversely, Mr Ramlal was under no obligation to request Mr Mahase to give it to him.
26. Their Lordships are of the further opinion that there was no change in the position during the eight weeks between 7th February and 4th April 1974. The obligation on Mr Mahase to supply Mr Ramlal with the appropriate information continued, it being impossible to say either that there was a waiver of the obligation during that period or that Mr Ramlal himself came under an obligation to request the information. The question is whether, in that state of affairs, Mr Mahase was entitled to give Mr Ramlal a notice making time of the essence of the contract.
27. On either or both of two related but distinct grounds that question must be answered in the negative. The first ground, the ground preferred by Mr Dingemans, is that when time is not originally made of the essence of the contract one of the parties is not entitled by notice to make it so unless the other party is in default. In the case of an open contract, where it is implied that completion or the performance of any intermediate obligation will take place within a reasonable time, it is only after the passage of such a time that a notice can be given because, until then, there has been no default in the performance of the contract. Thus in Green v Sevin (1879) 13 Ch D 589, Fry J said, at p 599:

"It is to be observed that the contract for purchase had limited no time for completion, and that, therefore, according to the rule in this country, each party was entitled to a reasonable time for doing the various acts which he had to do. What right then had one party to limit a particular time within which an act was to be done by the other? It appears to me that he had no right so to do, unless there had been such delay on the part of the other contracting party as to render it fair that, if steps were not immediately taken to complete, the person giving the notice should be relieved from his contract."

In the present case, as at 4th April 1974 there had been no delay, and therefore no default, on the part of Mr Ramlal. Not until Mr Mahase had supplied him with the appropriate information as to title could he have come under any obligation to complete.

28. The related but distinct ground is that the party serving the notice purporting to make time of the essence must himself be ready, able and willing to complete at the date when the notice is served. This is an express requirement of the conditions commonly incorporated in contracts for the sale of land in this country, but it does no more than express what would in any event be implied by law; see Halsbury's Laws of England, 4th edition, vol 42 (1999 reissue), para 121, note 7 and the cases there cited. It is evident that the requirement cannot be satisfied where the party serving the notice is himself in default. In the present case, on 4th April 1974, Mr Mahase was in default through not having supplied Mr Ramlal with the appropriate information as to title.
29. For these reasons, their Lordships are of the opinion that the letter of 4th April 1974, whatever its terms may have been, could not have made time of the essence of the contract. Nor was there anything in the subsequent correspondence to make it so. In their letter of 1st August 1974 Wilsons informed Capildeos that Mr Mahase had decided "to stand firm on the deadline communicated in ours of the 4th April, last", but that he would be prepared to compromise on two conditions: first, that Mr Ramlal should make payment for the excess land; second, that completion should take place by 21st August 1974. While it could perhaps be argued that the final paragraph of Capildeos' reply of 16th August constituted a recognition of the revised completion date, no agreement was ever reached as to the amount to be paid for the excess land. In the circumstances, there was never any concluded agreement for a compromise as proposed in Wilsons' letter of 1st August and time was never made of the essence of the contract. Accordingly, Mr Ramlal, not having been in default on 5th November 1974 when Mr Mahase conveyed the land to the Jaglals, thereupon became entitled to relief against Mr Mahase.
30. As for the Jaglals, Ibrahim JA was of the view that they were aware of the agreement for sale to Mr Ramlal and therefore that they purchased subject to that agreement. In their Lordships' view, however, it is doubtful whether the evidence adduced at the trial established that the Jaglals had actual notice of the agreement of 13th October 1971. But whether they did or not, it is clear that they had actual notice of Mr Ramlal's occupation of the disputed land and were thus fixed with constructive notice of all his rights over it; see Hunt v Luck [1902] 1 Ch 428. Accordingly, Mr Ramlal also became entitled to relief against the Jaglals.
31. Their Lordships are of the opinion, though for somewhat different reasons, that the decision of the Court of Appeal was correct and ought to be affirmed. The Court of Appeal's order does not specify the relief to be granted to Mr Ramlal. It appears that he is entitled to a declaration that the agreement of 13th October 1971 ought to be specifically performed and an order that the two surviving Jaglals should convey the disputed land to him. The matter will be remitted to the High Court for the perfection of the order.
32. Their Lordships will accordingly dismiss the appeal with costs.