Sookraj v. Samaroo (Trinidad and Tobago)  UKPC 50 (12 October 2004)
Privy Council Appeal No. 60 of 2002
Jagdeo Sookraj Appellant
Buddhu Samaroo Respondent
THE COURT OF APPEAL OF TRINIDAD
JUDGMENT OF THE LORDS OF THE JUDICIAL
COMMITTEE OF THE PRIVY COUNCIL,
Delivered the 12th October 2004
Present at the hearing:-
Lord Nicholls of Birkenhead
Lord Scott of Foscote
Baroness Hale of Richmond
[Delivered by Lord Scott of Foscote]
"Ramute requested the deposit from the respondent and, being informed that he had it, took him to his attorney, Mr Sagar, to have it paid over. The respondent had been advised by the lender of the deposit to ensure that he obtained a proper receipt for it. Mr Sagar, on being told this, advised them to sign another agreement on the same terms and conditions, save that the date for completion was extended by ninety days (May 3, 1981). They followed his advice and the deposit was paid over to Ramute."
(i) that Mr Samaroo's 3 November 1980 contract lacked consideration, was nudum pactum and therefore unenforceable; and
(ii) that the agreement of 23 February 1981 must be taken to be in substitution for and to have replaced its 3 November 1980 predecessor and that, since Mr Sookraj's 8 January 1981 agreement was earlier in time than the 23 February 1981 agreement, Mr Sookraj's equity under his 8 January 1981 agreement has priority over Mr Samaroo's equity under his 23 February 1981 agreement.
Before the Board additional contentions were relied on:
(iii) it was contended (by Mr Ramdhun) that the facts required the conclusion that the 3 November 1980 agreement was either non-existent or was a sham;
(iv) it was contended (by Dr. Seepersad) that Mr Sookraj had the prior equity because he made payments under his agreement before Mr Samaroo had made any payments under his;
(v) it was contended (also by Dr Seepersad) that Mr Samaroo had repudiated his agreement by failing to pay the $50,000 deposit and that the repudiation had been accepted by Mr Mohammed on behalf of Mr Ramute.
(i) The proposition that Mr Samaroo gave no consideration for the 3 November 1980 agreement is inconsistent with elementary principles of the law of contract. Under the agreement of 3 November 1980 Mr Ramute agreed to sell, Mr Samaroo agreed to purchase and the price of $400,000 was specified. The proposition that this was a contract without consideration moving from Mr Samaroo is absurd.
(ii) The question whether the 23 February 1981 agreement replaced and discharged the 3 November 1980 agreement or simply effected a variation of the earlier agreement is a genuine question to which their Lordships will return.
(iii) Their Lordships have already referred (in paragraph 6 above) to the contention that the 3 November 1980 agreement was non-existent or a sham. The contention cannot be accepted. It was never put to Mr Samaroo in cross-examination. It is contrary to concurrent findings of fact made in the courts below. And it was never argued in either of the courts below. Bearing in mind that the unexpressed premise of the contention was that Mr Samaroo and Mr Ramute had dishonestly contrived to put forward a fictitious contract in order to deprive Mr Sookraj of the benefit of his 8 January 1981 agreement their Lordships are of the opinion that for the contention to be raised for the first time before the Board was wholly inappropriate.
"Mr Mohammed was however reluctant to accept the down payment from [Mr Samaroo] and this reluctance continued for some weeks. [Mr Samaroo] complained (by telephone) to Mr Ramute who reassured him that he would be coming to Trinidad shortly and that the situation would be remedied. The vendor came to Trinidad in February 1981. He informed [Mr Samaroo] that matters had been settled with Hazrath Mohammed and that the down payment could now be paid."
In the Court of Appeal Hamel-Smith JA, while expressing some misgivings about the judge's finding that Mr Mohammed had been reluctant to accept the $50,000, made no other criticism of her findings. Nor did Lucky JA. In their Lordships' opinion the contention that Mr Samaroo's failure to pay the $50,000 deposit constituted a repudiatory breach of contract must be rejected.
"A rescission of the contract will also be implied where the parties have effected such an alteration of its terms as to substitute a new contract in its place … it is necessary to distinguish a rescission of the contract from a variation which merely qualifies the existing rights and obligations. If a rescission is effected the contract is extinguished; if only a variation it continues to exist in an altered form. The decision on this point will depend on the intention of the parties to be gathered from an examination of the terms of the subsequent agreement and from all the surrounding circumstances."
"The criterion is in the question whether what is intended to be effected by the second contract is rescission or variation."
And Lord Parmoor, at page 36, said that the determining factor on which the appeal depended was the intention of the parties at the time when the second agreement was made. In British and Benningtons Ltd v North Western Cachar Tea Co Ltd  AC 48. Lord Sumner said this (page 68)
"It was, however, argued before your Lordships that … the old contracts were discharged because a varied contract is not the old contract, and as you cannot have a new and varied contract and an old and unvaried contract, regulating the same thing at the same time, the old contract, like other old things, must be disregarded. As a matter of formal logic, this may possibly be so, but such was not the view taken by this House in Morris v Baron, since, if their Lordships had thought that any variation whatever would make a new contract and discharge the old one, they would have said so expressly … The variation may be a new contract, so as to make writing, duly signed, indispensible to its admissibility, for this is a matter of form and of the words of the statute, but the discharge of the old contract must depend on intention, tested in the manner settled in Morris v Baron."
This passage from Lord Sumner's speech was referred to by Lord Devlin in giving the judgment of the Privy Council in United Dominions Corporation (Jamaica) Ltd v Shoucair  1 AC 340. Lord Devlin summarised the legal principle thus, at p.348:
"If the new agreement reveals an intention to rescind the old, the old goes; and if it does not, the old remains in force and unamended."
"Ramute's concern that [Mr Samaroo] be given 'a proper receipt prepared by a lawyer' might have prompted Mr Sagar to prepare the receipt for the down-payment in the form of an agreement for sale but it in no way detracts from the efficacy or merits of the earlier agreement of 3 November 1980."
This is not quite an explicit finding on the question of the parties' intention but is tantamount to one. In the Court of Appeal, however, Hamel-Smith JA and Lucky JA did make explicit findings. Hamel-Smith JA said (p.153 of the Record)
"On the evidence it is indisputable that there was never any intention on the part of Ramute and [Mr Samaroo] to rescind the first agreement; rather there was every intention to keep it on foot."
Lucky JA said he agreed "with the judge's finding of fact that the parties had no intention to rescind the agreement of 3 November 1980" (p. 164 of the Record) and explained why (page 167 of the Record):
"The only variation effected by the second agreement is a new date of completion to which there was mutual agreement. This change did not go to the root of the first agreement. The evidence discloses that the second agreement was not inconsistent with the first agreement and that its true purpose was to satisfy a request from the Insurance Company (the lender) that the respondent should be in possession of a receipt for monies paid on deposit …"