harrinanan maharaj v sooknanan maharaj and...

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TRINIDAD AND TOBAGO

IN THE HIGH COURT OF JUSTICE

No. S-133 of 2001

CV 2008-03885

BETWEEN

HARRINANAN MAHARAJ Plaintiff

AND

SOOKNANAN MAHARAJ First Named Defendant

AND

VISHWAMINT MAHARAJ Second Named Defendant

AND BETWEEN

JOYCELYN MAHARAJ RAMSARAN OTHERWISE JOYCELYN Plaintiff

RAMDEYA MAHARAJ (ADMINISTRATRIX OF THE ESTATE

OF HARRINANAN MAHARAJ OTHERWISE HARRINANAN

SIGOOLAM MAHARAJ DECEASED)

AND

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SOOKNANAN MAHARAJ First Named Defendant

AND

VISHWAMINT MAHARAJ Second Named Defendant

By Original Writ and by Order of the Honourable Mr. Justice Moosai to carry on

proceedings, dated November 26, 2007.

Before The Honourable Justice P. Moosai

APPEARANCES:

Mr. Dinesh Rambally instructed by Ms Marilyn Parsad of DALTONS for Plaintiff

Mr. Prem Persad Maharaj for Defendants

REASONS

1. Introduction.

1. Harrinanan Maharaj commenced proceedings on January 29, 2001 against his brother, the

First Defendant, and his brother's son, the Second Defendant, for, among other matters, damages

for breach of an agreement made between the Plaintiff and the Defendants for the sale of ALL

AND SINGULAR that parcel of land together with the building thereon situate at High St.,

Princes Town, comprising Two Hundred and Seventy-Seven Square Meters (277.7 m²), upon the

terms and conditions referred to in 2 written documents dated April 15, 1994 and one dated May

11, 1994 (para 21 Statement of Claim).

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2. The said Harrinanan Maharaj (hereinafter referred to as "the Deceased") died on May 15,

2004 at the age of 86. His daughter Jocelyn Maharaj Ramsaran (hereinafter referred to as "the

Administratrix") as administratrix of his estate has continued these proceedings.

3. The relevant witnesses for the Plaintiff were:

(i) Joycelyn Ramsarran;

(ii) Manick Bissoon now deceased (document dated October 3, 1994

admitted).

(iii) Harrinanan Maharaj now deceased (instructions to his attorney-at-law

admitted).

The Second Defendant was the sole witness for the Defence. The First Defendant did not testify

as the Second Defendant indicated that he was too ill to testify. However no medical certificate

was produced. The Court indicated it was prepared to attend at the home of the First Defendant

to take his evidence. However the Second Defendant maintained that the First Defendant was too

ill to testify.

2. The issues.

4. The parties have agreed that the essential issues arising for determination are:

1. The nature and extent and terms of the agreement entered into between the Plaintiff and the Defendants.

2. Whether the alleged terms of the agreement were intended to form a legally binding and enforceable contract and intended to create legal relations.

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3. Whether the Plaintiff has brought his action within four (4) years from the date of accrual of the cause of action and/or whether the payment of Five Thousand Dollars ($5000) by the First Defendant to the Plaintiff on June 24, 1997 was paid on account of and pursuant to the alleged agreement.

3. Analysis of the facts.

5. The Sigoolam family is well known throughout Princes Town. Sigoolam Maharaj, now

deceased, was the patriarch and the father of 9 children, (7 boys and two girls). The Deceased

was the eldest boy. Sigoolam Maharaj acquired prime commercial properties including one

situate in the heart of Princes Town on High Street measuring approximately 100 feet in frontage

by 100 feet long.

6. The said Sigoolam Maharaj divided up the property among 4 of his sons. Thus each son

had a small strip of property measuring approximately 26 feet in width, with the First

Defendant's strip being contiguous to that of the Deceased (hereinafter referred to as “the said

property”). The Deceased became owner of same by deed of conveyance dated November 29,

1969.

7. Each of the siblings, save and except for the First Defendant, constructed commercial

properties on their respective strips of land. The Deceased constructed a four-storey commercial

property thereon. He and his family operated a hardware store on a portion thereof and rented the

remainder to tenants. The First Defendant's strip at all material times was not built upon.

8. By deed of mortgage dated June 26, 1986 the Deceased mortgaged the said property to

the National Commercial Bank of Trinidad and Tobago ("NCB") to secure a demand loan.

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9. As can so easily happen, the Deceased ran into financial difficulties. This resulted in the

bank calling upon him by letter dated August 18, 1993 to settle the outstanding sum of

$716,519.50 failing which it proposed to enforce its security. The bank also commissioned a

valuation from its valuer, Mervyn Thompson (document 1, Agreed Bundle). While not admitted

for the truth of the contents, the Administratrix testified that she saw the said valuation (dated

February 10, 1994) with its market value $1,385,000.

10. In ongoing discussions with the bank it agreed to accept the sum of $660,000 from the

Deceased in full and final settlement of the sum owed.

11. Shortly thereafter the Deceased enquired of the Administratrix (his eldest child) whether

his 6 daughters (there were also 4 sons) would have been willing to contribute monies to assist

him in paying off the loan. However his request fell on deaf ears as the girls were unable to

assist.

12. Thereafter the Deceased, quite naturally, had to seek out other purchasers for the said

property.

13. In all likelihood the Deceased would have around early 1994 contracted Manick Bissoon,

a real estate agent, to find someone willing to purchase the said property.

14. It is noteworthy that the Deceased owned several properties and operated not only a

hardware business but also furniture and electrical store and a gas station. Additionally he owned

several houses which were tenanted and agricultural estates at La Lune, Moruga. Thus on the

evidence, while he was in financial difficulties, he did not live from hand to mouth.

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15. It is common ground that the First Defendant and the Deceased had a very close

relationship. They lived next to, and conducted business with, each other.

16. One of the issues impeding the sale of the said property to prospective purchasers was the

agreed encroachment of the steps of the said building onto the First Defendant's property next

door (the encroached area being approximately 6 feet). Thus the First Defendant became the

ideal candidate to purchase same.

17. The evidence establishes that the First Defendant was interested in the purchase of same

particularly having regarded to:

(i) the closeness of the brothers; (ii) the desire of the First Defendant to assist a dear brother

who was in financial difficulties; (iii) the desire of the First Defendant to keep the said property

within the family as he "was concerned that the Sigoolam name and reputation was at stake," the Sigoolam name being synonymous with hardware business and he wanted to preserve the hardware image (see para 12 Witness Statement, 2nd Defendant).

18. As a result the Deceased and the Defendants engaged in ongoing discussions not only

among themselves but with the bank for the purchase of the said property by the Defendants. Of

critical significance is the fact that further discussions between the Deceased and the Defendants

were not confined solely to the sale of the said property to the latter, but expanded to include the

sale of the hardware business as a going concern (see para 13 Witness Statement, 2nd

Defendant).

19. In that regard the contemporaneous documents set out hereunder are of particular

importance in ascertaining the nature of the agreement between the parties and its contractual

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force. It is to be noted in Horace Reid v Charles and Bain the Privy Council underscored the

importance of properly evaluating the evidence:1

Mr. James Guthrie, in his able submission on behalf of Mr. Reid, emphasised to their Lordship that where there is an acute conflict of evidence between neighbours, particularly in rights of way disputes, the impression which their evidence makes upon the trial judge is of the greatest importance. This is certainly true. However, in such a situation, where the wrong impression can be gained by the most experienced of trial judges if he relies solely on the demeanour of witnesses it is important for him to check that impression against contemporary documents, where they exist, against the pleaded case and against the inherent probability or improbability of the rival contentions, in the light in particular of facts and matters which are common ground or unchallenged, or disputed only as an after-thought or otherwise in a very unsatisfactory manner. Unless this approach is adopted, there is a real risk that the evidence will not be properly evaluated and the trial judge will in the result have failed to take proper advantage of having seen and heard the witnesses.

20. The contemporaneous documents dated April 15, 1994 both came into existence as a

result of the ongoing discussions between the Deceased, the Defendants and the bank. The fact

that the said documents were prepared by an attorney at law, Basil Jack, underscored the

commercial nature of the transaction that was being entered into by the respective parties. In any

event the parties do not dispute the contents of both documents (see para 13 Witness Statement,

2nd Defendant).

21. The Deceased, in the first of those documents, notified the bank that he had agreed to

sell the said property to the Defendants at and for the sum of $580,000, with the proceeds thereof

payable to the bank in full and final settlement of his indebtedness.

1 PC App No 36 of 1987 6 (PC).

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22. The Defendants addressed the second of those documents to the Deceased and stated:

"After the consideration and sale of your property to the undersigned Sooknanan Maharaj and Vishwamint Maharaj we undertake the responsibility to liquidate the outstanding debts the business has incurred to suppliers of goods to the store, including water rates, taxes, electricity, phone and Vat at our earliest convenience."

Manifestly this is suggestive of additional sums being paid over and above the said $580,000

(particularly the outstanding debts to supplies of the store), the reasonable inference being that

there was an additional component to the sale of the said property.

23. In terms of chronology, the impugned document dated May 11, 1994 follows. This

document is headed "NANAN". To the right thereof "OFFER Store" and continues:

"Vishwamint Maharaj hereby agree to the following:-

(1) To pay NCB debt for store (2) To pay overdue taxes + w/Rate STORE. (3) To pay outstanding bills for goods supplied to store. (4) To pay balance of money owing to Agricultural Bank (5) To pay Estate at Moruga Taxes (6) To give you a Lump Sum of Twenty five Thousand $25,000 (7) To give you a monthly allowance of $2000 Two Thousand $"

24. Having seen and heard the witnesses and considered the documents and the entire

circumstances, I hold that the impugned document dated May 11, 1994 was written by the First

Defendant (who was admittedly called “Nanan”) and embodied the terms and conditions upon

which the Defendants were to acquire not only the said property, but the business thereon

(hardware) as a going concern. The clear and irresistible inference to be drawn therefrom is that

discussions on the issue must have taken place between the Deceased and the Defendants prior to

the documents of April 15, 1994 and May 11, 1994 coming into being.

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25. In holding as I do, I have noted, among other matters, the following:

(i) The 2nd Defendant feigning ignorance of the said document dated May 15, 1994 is simply not worthy of belief (see, for example, the admission in the Defence at para 8 (f) of knowledge of contents of the said document and the agreement incorporated therein.)

(ii) The 2nd Defendant vacillated and adopted inconsistent positions on whether the document was written by his father.

(iii) It is inconceivable that the First Defendant would not have discussed the entire transaction with the 2nd Defendant as, after all, the latter was financing same. That would also explain why the First Defendant would have addressed the impugned document to the 2nd Defendant. And the 2nd Defendant conceded that he would have signed off on

anything his father and the Deceased agreed to. (iv) The 2nd Defendant did not level with the court on something as

elementary as where the said Sigoolam Maharaj lived (para 4 Witness Statement). Accordingly I rejected the evidence that the grandfather came to live at the Defendants' home at Malgretoute in Princes Town when he became sickly. Clearly as the Second Defendant admitted, Sigoolam Maharaj did not live at their home.

(v) In cross-examination the 2nd Defendant, with respect to para 29 of his Witness Statement, readily admitted that what was contained in the said document dated May 11, 1994 was a list of his father's proposals:

"I would say that is a list of his proposal."

(vi) Amazingly in cross-examination the 2nd Defendant disclaimed any knowledge of item 3 on the said document dated May 11, 1994 which dealt with "paying outstanding bills for goods supplied to the store." Yet at para 20 of Witness Statement the 2nd Defendant admitted that, after purchasing the said property, "the negotiations continued between ourselves and the [Deceased] for the purchase of the business and the store." Surely the Defendants could not have expected to purchase the business as a going concern by simply paying the purchase price for the said property

(vii) The Deceased at the time was 76 years old and, even though in financial difficulties, was the owner of other valuable assets. As such he really did not need a handout from the Defendants to survive. This underscores the commercial nature of the transaction.

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(viii) It would follow that, save where otherwise expressly stated, I consider the 2nd Defendant to be an unreliable witness.

26. In coming to the foregoing conclusion I am aware that document 8, dated June 17, 1994,

signed by the Deceased and embossed with the stamp of Basil Jack, attorney-at-law, recites a

different purchase price ($600,000 and not $580,000). It would appear that at the time of

completion the Defendants were able to convince the bank to accept the sum of $580,000.

However it is manifest that the contents of the said document were limited to dealing with the

purchase price of the said property and did not concern the sale of the business as a going

concern.

27. The evidence reveals that after June 1994, the Defendants themselves encountered

difficulties in completing the transaction. This led to the Deceased renewing his efforts to find

another purchaser for the said property.

28. By letter dated October 3, 1994 (document 9 of Agreed Bundle) signed by the Deceased

as Vendor and Raubindranath Harrinarine as Purchaser, Mannick Bissoon (the Real Estate Agent

appointed by the Deceased whose testimony I accept) informed the bank that:

1. The Vendor and Purchaser had arrived at an agreement whereby the former would sell the said property to the latter at and for the sum of $1,200,000.

2. The Purchaser had agreed to make the required deposit of 10% of the purchase price and settle the outstanding sum within 90 days from the date of the agreement, time being of the essence.

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This figure ($1.2M) approximates to the valuation seen by the Administratrix (para 8) and

provides the court with evidence as to the likely market value by the said property. Clearly the

Defendants were paying less than market value for same.

29. The reasonable inference to be drawn from the foregoing is that the Defendants were

spurred into action to complete the transaction on the terms and conditions previously agreed

upon (see Doc. 7) and, indeed, were the terms and conditions, as I find, agreed upon by the

parties for the sale of the said property and the purchase of the business as a going concern.

30. The Defendants duly completed payment of the purchase price and by deed dated

November 10, 1994, the Deceased conveyed the said property to the Defendants and

Chandralaka Gosine at and for the sum of $580,000. It is common ground that the Defendants

paid or the outstanding taxes, water rates and electricity bills for the said property (see para 26

witness statement 2nd Defendant).

31. The Plaintiff's contention is that, after the sale of the said property, the hardware business

was never continued as the Defendants chained and padlocked the door to same (see cross-

examination of Joycelyn Ramsarran.) The Defendants contend that, after the sale of same,

negotiations continued for the sale of the business as a going concern but that the Deceased and

his children continued to operate the hardware on the ground floor of the said property.

32. In considering the testimony on the issue, I accept the Plaintiff’s contention. In

examining the evidence, the 2nd Defendant at the very beginning of the cross-examination began

by saying:

"I trade under Vish Maharaj Hardware and import and wholesale throughout the country. That hardware I have been operating that from late 1994.

Q: Where did you start operating that in late 1994?

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A: Cipero Street, San Fernando."

However later on in cross-examination he contradicted himself by stating that his business

began its operations at Sigoolam Complex a few months after he purchased the said

property (property purchased in November 1994).

33. It would appear from the testimony of the 2nd Defendant that he had some concerns

about the Deceased's son, Ramchand Maharaj, removing some stocks from the business. That,

from his perspective, was the trigger for non-compliance with any of the terms and conditions

entered into by the parties: see paras 20 to 26 Witness Statement, 2nd Defendant. However the

Defendants have not claimed any relief for same and, in any event, I can place little reliance on

the 2nd Defendant's testimony.

34. Having regard to my findings in this matter, the Defendants would have been obliged to

fulfil their contractual obligations as embodied in the document dated May 11, 1994 from the

time of the conveyance of the said property on November 11, 1994. Accordingly, if applicable,

time for the purposes of the material statute of limitations would have begun to run from that

date.

35. Quite clearly the failure to fulfil his contractual obligations weighed heavily on the First

Defendant's conscience. It is not uncommon for family members, particularly those of advanced

age (the First Defendant was at that time around 73, the Deceased 76), to acknowledge their

mistakes of the past before facing, ultimately, the destiny of the living. Thus by letter dated June

24, 1997, (signed by him as "NANAN") addressed to "My dear Brother," the First defendant

began:

"Enclosed please find Bankers cheque for $5000 as it has been very difficult to raise any money since the takeover of the business." [Emphasis added.]

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The Defendants at para 14 of their Defence contend that the First Defendant paid the said sum of

$5000 to the Deceased to assist him in paying his medical bills, and not pursuant to the

agreement referred to by the Deceased. However the First Defendant makes it pellucidly clear

what the 2nd Defendant was at pains to deny, namely that there was a takeover of the business

by the Defendants.

36. After reciting the parlous state of the business the First Defendant continues:

"It worries me greatly that I could not keep my promise to you. Nevertheless I will try somehow to raise more money for you before year end.

It has been an exceedingly difficult period and worry to my life since I went into this business…"

37. The 2nd Defendant then bemoans his fragile health and the state of his personal finances

and returns to the recurring theme of the indebtedness:

"I haven forgotten you, and believe me I will do my best to pay you as the cash becomes available. You have waited a long time and I hope to do something before year ends."

38. By letter dated October 24, 1997 the Deceased's attorney-at-law referred to numerous

requests made by his client for the Defendants to pay the sums outstanding to him and called

upon the Defendants to honour the agreement entered into on or about November 11, 1994

whereby they agreed to pay the Deceased a lump sum of $25,000 and a monthly sum of $2000.

39. In response the Defendants' attorney-at-law, by letter dated November 6, 1997 (document

12), contended that his clients were unaware of such an agreement, denied numerous requests

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being made by the Deceased and sought more details/particulars of the circumstances

surrounding the payments of the alleged sums. However it should be pointed out that, in their

Defence (para 16), the Defendants concede that the Deceased did not make numerous requests,

"but rather a few inquiries." Further the Defendants assert that if any payments were made they

were made pursuant to a family arrangement and not intended to be legally binding.

40. It is similarly noteworthy that para 19 of the Statement of Claim states:

"To date the Defendants have paid the following sum to the Plaintiff:

(a) 30th November, 1994 $2000

(b) 18th June, 1997 $5000"

The Defendants at para 17 of their Defence admit "to paying the sum of $2000 but denies that

the payment of the 18th June, 1997 in the sum of $5000 was intended to be part of the agreement

but rather was just gratis and given at the request of the Plaintiff."

41. On the totality of the evidence I hold that the sum of $2000 paid by the First Defendant

to the Deceased on December 30, 1994 and the sum of $5000 also paid by the First Defendant to

the Deceased on June 18, 1997 were paid pursuant to the agreement entered into between the

Deceased and the Defendants the terms and conditions whereof are embodied in the document

dated May 11, 1994.

42. 1997 having come and gone and with 4 years approaching, the Deceased, by Writ of

Summons filed on March 19, 1998, commenced proceedings against the Defendants for, among

other matters, damages for breach of an agreement made on or about November 11, 1994. It

would appear that there was some irregularity in service of same and that action was never

pursued.

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43. The Deceased on January 29, 2001 commenced the instant proceedings against the

Defendant's seeking, among other matters, the relief set out at para 1 above.

4. Analysis of the law.

(i) Intention to create legal relations.

44. Halsbury's Laws of England2 underscores the requirement for an agreement, even

though supported by consideration, to evince an intention to create legal relations:

"300. The requirement. It has probably now become a rule of English common law that an agreement will not be enforced unless it evinces an intention to create legal relations, that is it is not sufficient that there is an agreement supported by consideration, unless the parties also evince an intention to create legal (that is contractual) relations.

In many instances there can be no doubt that a legal relationship was intended, and in others it would be equally clear that it was not; but there would also be cases where the matter will remain in doubt, and the court is then faced with the task of determining the intention of the parties. Ordinarily, the task would be the objective one of whether a reasonable man would regard the offer made to him as one which was intended to create legal relations; and what is decided may be considerably influenced by the importance of the agreements to the parties, and this is especially the case if one of them has performed his side of that agreement.

301. The intention of the parties. Whilst an intention on the part of the parties to an agreement to create legal relations is necessary before that agreement will be enforceable, such an intention will usually be inferred from the presence of consideration. But this is not always the case, as where there is a mere family, domestic or social engagement. To aid them in their sometimes difficult task of ascertaining the intention of the parties, the courts have therefore become accustomed to divide the cases into two classes: (1) commercial agreements, (2) family, domestic or social agreements.

2 Halsbury’s Laws of England 4

th edn.Vol 9, Contract, [300]-[301].

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In the case of family, domestic or social agreements, it is presumed there is no intention to create legal relations; but there is presumed to be such an intention in the case of commercial agreements."

45. The authority of Edwards v Skyways Limited3 suggests that the question of whether

there was an intention to create legal relations is one of construction. In that case employers

promised to make an "ex gratia payment" to a dismissed employee. It was held that these words

did not negative contractual intention, but were used by the employers simply to indicate that

they did not admit any pre-existing liability on their part to make the payment. Megaw J

provided a useful summary of the law on the issue4:

It is clear from such cases as Rose and Frank Co. v. J. R. Crompton & Bros.

Ltd.5 and Balfour v. Balfour

6 that there are cases in which English law

recognises that an agreement, in other respects duly made, does not give

rise to legal rights, because the parties have not intended that their legal relations should be affected. Where the subject-matter of the agreement is some domestic or social relationship or transaction, as in Balfour v. Balfour, the law will often deny legal consequences to the agreement, because of the very nature of the subject-matter. Where the subject-matter of the agreement is not domestic or social, but is related to business affairs, the parties may, by using clear words, show that their intention is to make the transaction binding in honour only, and not in law; and the courts will give effect to the expressed intention. Scrutton L.J. expressed it thus, in Rose and Frank Co. v. J. R.

Crompton & Bros. Ltd.7 :

“Now it is quite possible for parties to come to an agreement by accepting a proposal with the result that the agreement concluded does not give rise to legal relations. The reason of this is that the parties do not intend that their agreement shall give rise to legal relations. This intention may be implied from the subject-matter of the agreement, but it may also be expressed by the parties. In social and family relations such an intention is readily implied, while in business matters the opposite result would ordinarily follow. But I can see no reason why, even in business matters, the parties should not intend to rely on

3 [1964]1All E R 494 (QBD).

4 Ibid 499.

5 [1924]All E R Rep 245; [1923] 2KB 261.

6 [1918-19]All E R Rep 860;[1919] 2KB 571.

7 (n5) 249-250; 288.

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each other's good faith and honour, and to exclude all idea of settling disputes by any outside intervention, with the accompanying necessity of expressing themselves so precisely that outsiders may have no difficulty in understanding what they mean. If they clearly express such an intention I can see no reason in public policy why effect should not be given to their intention.”

In the same case, Atkin LJ said8 :

“To create a contract there must be a common intention of the parties to enter into legal obligations, mutually communicated expressly or impliedly. Such an intention ordinarily will be inferred when parties enter into an agreement which in other respects conforms to the rules of law as to the formation of contracts. It may be negatived impliedly by the nature of the agreed promise or promises, as in the case of offer and acceptance of hospitality, or of some agreements made in the course of family life between members of a family as in Balfour v.

Balfour.9 If the intention may be negatived impliedly it may be negatived expressly.”

In the present case, the subject-matter of the agreement is business relations, not social or

domestic matters. There was a meeting of minds — an intention to agree. There was, admittedly,

consideration for the company's promise. I accept the propositions of counsel for the plaintiff

that in a case of this nature the onus is on the party who asserts that no legal effect was intended,

and the onus is a heavy one.

Conclusion on intention to create legal relations.

46. As already indicated I hold on the totality of the evidence that the document dated May

11, 1994 written by the First Defendant embodied the terms and conditions upon which the

Defendants were to acquire not only the said property, but the hardware business as a going

concern. Moreover and, notwithstanding that the parties to the agreement were closely related,

8 (n4) 252; 293.

9 (n6)860;571.

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this was a purely commercial agreement which was intended by all of them to be binding both in

law (and I would add honour): see Snelling v John G Snelling Ltd. et al.10

47. The authorities are clear that whilst in the case of commercial agreements there is a

presumption that the parties intend to create legal relations, that presumption may be negatived

either expressly or impliedly: Halsbury's on Contract.11 However "the onus is on the party

who asserts that no legal effect was intended, and the onus is a heavy one": see Edwards v

Skyways Limited.12 In the instant case the Defendants have not discharged the heavy onus cast

upon them to negative the intention to create legal relations.

(ii) Acknowledgment.

48. The further issue identified by the parties as arising for determination is whether the

Plaintiff has brought this action within 4 years from the date of accrual of the cause of action,

and/or whether the payment of $5000 by the First Defendant to the Plaintiff on June 24, 1997

was paid on account of and pursuant to the alleged agreement.

46. The Limitation of Personal Actions Act, Chapter 5 No. 6 ("the LPA Act") was on

November 17, 1997 repealed and replaced by the Limitation of Certain Actions Act ("LCAA")

Chapter 7:09. However section 20 of the LCAA expressly provides that the Act shall not apply

to any action brought upon a right of action which accrued before the commencement of the Act.

Payments admittedly made in the sum of $2000 on December 30, 1994 and the sum of $5000 on

June 24, 1997 would mean that the LPA Act would be the relevant statute although, I should add

10

(1973) QB 87(QB) 93 (Megaw J).

11

(n1) [304]. 12

(n2) 500A (Megaw J).

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that my conclusion on the law with respect to acknowledgments would have been the same under

the LCAA. Sections 5 and 7 of the LPA Act provide:

"5.… All actions founded upon any simple contract without specialty… and/or personal and mixed actions whatsoever shall and may be commenced and sued within four years next after the cause of such actions, and not after…

7. If any acknowledgment shall be made either by writing signed by the party liable upon any simple contract or his agent, or by part payment or part satisfaction on account of any principal or interest being due thereon, it shall and may be lawful for the person entitled to such action to bring his action for the money remaining unpaid or so acknowledged to be due, within four years after such acknowledgment, or part payment, or part satisfaction, as aforesaid, or the last of such acknowledgments, part payments, or part satisfactions, if more than one."

50. It is to be noted that section 7 provides for two disparate forms of acknowledgment,

namely:

(i) an acknowledgment in writing signed by the party liable upon any simple contracts or his agent; or

(ii) part payment or part satisfaction on account of any principal or interest being due thereon.

With respect to part payment there is no requirement for that particular form of acknowledgment

to be in writing.

51. Quite recently the Privy Council in Emile Elias & Co. Ltd. v AG of Trinidad and

Tobago 13 considered section 7 of the LPA Act and stated:

10. The law as to acknowledgment is far from easy, and it is common ground that the law of Trinidad and Tobago at the material time differed significantly from the present law of England and Wales, since the Statute of Frauds

13

PC App No 0098 of 2010;[2011] UKPC 19 [10], [12].

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Amendment Act 1828 (Lord Tenterden's Act) stopped many abuses by requiring an acknowledgment to be in writing, and signed by the debtor or his agent. But it was also treated as confirming the old common law doctrine that in order to be effective, an acknowledgment of a debt must amount to an express or implied promise to pay the debt: see Viscount Cave in Spencer v

Hemmerde14; also the comment in the judgment of Camacho KC Ag in Re

Max Reimer15 that

"The position of debtor and creditor in England on a simple contract was not altered by Tenterden's Act which apart from requiring writing as evidence of an acknowledgment merely attired in statutory raiment the relevant common law as administered by the Courts in England."

…

12. In the impressive judgments of the Full Court of Trinidad and Tobago in Re Max Reimer, affirming the equally impressive judgment at first instance, it was authoritatively held that the law of Trinidad and Tobago as to acknowledgments has been assimilated to the law of England and Wales as it was before 1939. In particular, an acknowledgment must be made to the creditor or his agent (see Belcher CJ at p 275). Another point of difference (which would have provided a short answer to the whole or almost the whole of the claim had the Ordinance mirrored the present state of English law) was that under the old law an acknowledgment could start the time running again even after the limitation period had expired."

Thus in order to be effective, an acknowledgment of a debt must amount to an express or implied

promise to pay the debt and must be made to the creditor or his agent.

52. In his historical account of the development of the law with respect to acknowledgment

and part payment Michael Franks, Limitations of Actions,16 opined that a "part payment of the

debt was regarded in the same way as an acknowledgment…" Thus, relying on Elias and

14

[1922] 2AC 507, 512-513 [HL]. 15

[1931] 6 JSCTT 252,256. 16

Michael Franks, Limitation of Actions (1969) 215.

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Company Ltd.,17 in order to be effective a part payment must also amount to an express or

implied promise to pay the debt.

53. By reason of the foregoing it is manifest that once the Plaintiff can satisfy the court that

there was an acknowledgment that complies with the requirements of the LPA Act, the cause of

action is revived even after the limitation period has expired.

(a) Acknowledgment (by part payment).

54. When one considers the circumstances in which the said payment of $2000 was made by

the First Defendant to the Deceased, the only reasonable conclusion that can be drawn is that it

was referable both to the said agreement of May 11, 1994 whereby the Defendants agreed to pay

the Deceased, among other matters, a lump sum of $25,000 and a monthly allowance of $2000.

55. In that regard after setting out the terms and conditions for the sale of the said property

and the business as a going concern, the Deceased conveyed the said property to the Defendants

and their nominee on November 10, 1994. Approximately one month thereafter the First

Defendant paid the Deceased $2000. In my view the irresistible inference to be drawn in all the

circumstances, having regard to the particular sum paid, namely $2000, is that the said sum was

paid pursuant to the contractual obligations of the Defendants and represented one of the

monthly allowances of $2000 promised thereunder, and amounted to an implied promise to pay

the debt.

17

(n12).

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56. An acknowledgment by one of a number of joint and several debtors is binding on all:

see Whitcomb v Whiting18

; Read v Price 19. Accordingly the foregoing acknowledgment by the

First Defendant would also bind the Second Defendant.

57. The consequence of the said acknowledgment (by part payment) made on December 30,

1994 would be to extend the time for the Plaintiff to bring an action against the Defendants.

However having regard to my following finding with respect to the issue of the acknowledgment

in writing, I need not consider this issue further.

(b) Acknowledgment in writing.

58. The case against the Defendants on the issue of the acknowledgment in writing is equally

compelling. In considering the issue, I have also factored in that there was the earlier

acknowledgment by part payment aforesaid. It is common ground that the First Defendant was

also called "Nanan" and that he wrote the letter dated June 24, 1997 to the Deceased. Manifestly

the First Defendant is referring therein to a debt owed to the deceased and couples that with an

express or implied promise to pay the same. Extracts from the said document, although set out in

my analysis at paras 35 to 37 above, are reproduced hereunder for the sake of convenience:

"Enclosed please find Bankers cheque for $5000 as it has been very difficult to raise any money since the takeover of the business." [Emphasis added.]

"It worries me greatly that I could not keep my promise to you. Nevertheless I will try somehow to raise more money for you before year end.

It has been an exceedingly difficult period and worry to my life since I went into this business…"

18

(1781) 2 Doug KB 652; 99 ER 413. 19

[1909] 2KB 724.

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"I haven forgotten you, and believe me I will do my best to pay you as the cash becomes available. You have waited a long time and I hope to do something before year ends."

59. The effect of such an acknowledgment made on June 24, 1997 would be to extend the

period for the Plaintiff to commence an action to June 24, 2001. Accordingly the Plaintiff could

maintain the instant action, the same having been filed on January 29, 2001.

5. Conclusion.

60. In those circumstances the court ordered judgment for the Plaintiff against the Defendants

and ordered the sum of Two Hundred and Ninety-Two Thousand Dollars ($292,000) to be paid

by the Defendants to the Plaintiff.

61. The court arrived at the said sum by calculating the unpaid sums claimed and established

by the Plaintiff pursuant to the document dated May 11, 1994. These were:

(1) $48,000 being the balance of money owing by the Deceased to the Agricultural Development Bank ("ADB"). The said sum was paid to Taurus Services Ltd. to settle the ADB loan when the Deceased sold the lands he owned at La Lune, Moruga, to Charan Ramsumair (see receipt dated September 21, 1999).

(2) The lump sum of $25,000.

(3) The sum of $226,000 being the monthly allowance of $2000 for the period December 1994 to May 15, 2004 (date of death of Deceased) [113 months].

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Credit was given for the sum of $7000 ($5000 plus $2000) paid by the Defendants to the

Plaintiffs.

62. The court awarded no interest on the said sum of $292,000.

63. Costs were assessed pursuant to CPLR 67.5 and Appendix B in the sum of $49,000.

64. By consent there was a stay of execution of 6 weeks.

DATED this 22nd day of September, 2011

……………………….

PRAKASH MOOSAI

JUDGE

harrinanan maharaj v sooknanan maharaj and...

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