Declaring that the decade-old case was “acrimonious, long, and tortuous” considering its straightforward background, the Caribbean Court of Justice (CCJ) yesterday ruled that Blairmont Rice Investment Incorporated did breach its contract with the Kayman Sankar Group of Companies and this was sufficient grounds for the latter to repudiate a land sales agreement.
The Trinidad-based court of last resort for Guyana in its judgment delivered yesterday, has ordered Blairmont Rice to pay Kayman Sankar basic costs in the sum of $1,705,250. The question of damages to be paid by Blairmont Rice to the Kayman Sankar Group remains at the High Court here.
The CCJ found the breach to have been serious by Blairmont’s (the Appellant) default on two required payments before Kayman Sankar (the Respondents) claimed to repudiate the agreements for the purchase of land at Von Better and Blairmont on the West Berbice.
Blairmont Rice had sued Kayman Sankar Co Ltd, Kayman Sankar Investments Ltd and Beni Sankar.
The CCJ noted that the benefit which it was intended the Respondents should obtain from the Appellant was instalments paid in such a manner, as to avoid its (Kayman Sankar’s) default on obligations to financial institutions.
“The Appellant’s failure to pay instalments for an entire year is of so extensive a nature as to have serious consequences for, the “commercial purpose of the venture” between itself and the Respondents,” the apex court noted.
Justice Andrew Burgess who read the Court’s ruling, noted that the two consecutive instalment payment defaults effectively put the Respondents at risk of being deprived of the whole benefit which they were intended to gain from the agreements—such as not losing the properties to their creditors—and being able to pay them off while securing for those purposes, the agreed purchase price.
In its judgment, the Court said that it was the Appellant which was in breach and not the Respondents.
Justice Peter Jamadar who also heard the case noted in the judgment that the consequences of the defaults in payments effectively undermined the “commercial purpose of the venture” and that the Respondents had been substantially deprived of a central and significant benefit that it was agreed and intended would be derived from the contractual arrangements.
“The Respondents were therefore entitled to consider the contracts discharged and to repudiate them,” Justice Jamadar noted.
The Court then affirmed the orders of the Guyana Court of Appeal and ordered Blairmont Rice to pay the Kayman Sankar Group of Companies costs in the sum of $1,705,250.
The CCJ then went on to note that until Blairmont is restored to the Companies Register in accordance with Section 487 (5) of the Companies Act, the assessment of damages must be left untouched.
The apex court also took the opportunity to reiterate its previously-stated disappointment with the sloth of the justice system here in Guyana and the more than 10 years the case had languished in the local courts.
On December 21st, 2006 Blairmont Rice entered into agreements with the Sankar Group for the purchase of interest in certain rice lands, equipment and buildings. Upon signing the agreements, it made an initial payment for the assets acquired.
It was agreed between the parties, that Blairmont Rice would pay the outstanding balance at half-yearly intervals, with an express term that the Sankar Group had the right to repossess the properties once the purchasers failed to honour their financial obligations.
However, it failed to make the required payments. The CCJ’s judgment noted that on 6th October 2010, the Respondents wrote to Mr Jai Benie, Managing Director of Mahaicony Rice Ltd, and who was also the Chief Executive Officer of the Appellant, as follows:
“Bearing in mind, that you have defaulted on most payments to present time and this has resulted in the Bank…being very vulnerable, as they have depended on a third Party, Mahaicony Rice Limited (MRL) to satisfy the repayments schedule of Kayman Sankar & Company Ltd (KSCL).
Below are three options and the most important being number one (1) and number three (3) less important:
(1) Yes, the Bank [has] agreed to US$50,000 repayment from you per month but, there should be a change in the Contract to specify that if there is a non-payment of any one instalment, then the whole sum becomes due or payable and, KSCL repossess the property at no cost to them.
(2) KSCL can enter into a Joint Venture Company with MRL but KSCL having (controlling) interest.
(3) Immediately, we agree on a figure to be repaid to MRL and KSCL repossess the property”.
The CCJ said that it does not appear from the record that there was any reply to this letter.
The Sankar Group subsequently repudiated the agreements in January of 2011, and began seeking to repossess its properties.
Three months later, it commenced proceedings in the High Court against Blairmont Rice and on March 29th, 2012, Justice Ian Chang ruled that the agreements had been rescinded for breach by the rice company and consequently ordered the Sankar Group to pay Blairmont Rice “by way of restitution, the sum of $232,277,108 for the return of ownership and vacant possession of all properties, movable and immovable, subject of the agreements between them.”
The judge had further ordered Blairmont Rice to immediately hand over to the Sankar Group all its properties after the restitution would have been paid.
The former chief justice then dismissed a counterclaim Blairmont Rice had filed, and awarded the Sankar Group costs in the sum of $40,000.
On April 17th, 2012, Blairmont Rice filed an appeal in the Court of Appeal, simultaneously seeking a stay of the orders made by Justice Chang. On May 15th of that year, Justice of Appeal Yonette Cummings-Edwards granted the stay, which she ordered to last until the determination of the substantive appeal.
Later that month, the Sankar Group filed a motion, seeking to set the stay aside. The CCJ noted that after all these years, this motion has not been heard. On July 3rd, 2013 Blairmont Rice filed a motion seeking an order that the Sankar Group vacate the properties, on the basis that they were “forcibly and brutally evicted by them in the wee hours of May 12th, 2013.”
But by a majority, the Court of Appeal held that it had no jurisdiction to hear the motion and so dismissed it on July 30th 2013.
Blairmont Rice subsequently appealed to the CCJ and, after hearing counsel on both sides, the CCJ, on August 13th, 2013 issued an order by consent, remitting to the Appeal Court, for urgent hearing on their merits, the motions of both Blairmont Rice and the Sankar Group.
The CCJ had at that time, directed that “the hearing of the notices of motion be deemed fit for urgent hearing by the Court of Appeal.”
On 30 July 2018, George-Wiltshire CJ (Ag), delivered the judgment of the Court of Appeal.
The CJ (Ag) said that the main question for the court was whether the Appellant breached an essential term of the contract. She considered the admissions of the Appellant in its defence, counterclaim, and the evidence at trial, which all indicated the importance of punctual compliance with payment obligations. The CJ (Ag) also noted the language of the agreement. In light of those considerations, Justice George-Wiltshire rejected the arguments to the contrary by the Appellant and held, agreeing with the Respondents, that punctual payment was an essential term and that therefore, the Appellant committed a repudiatory breach.
On the issue of the damages payable by the Appellant to the Respondents for its breach of contract, Justice George-Wiltshire had noted the competing claims of the parties. The Appellant contended that it had made improvements to the property whereas the Respondents maintained that the property had deteriorated. Justice George-Wiltshire held that, as there was insufficient evidence to resolve these competing claims, the matter of damages would be remitted to the High Court for an assessment.
Blairmont Rice was represented by attorneys Sanjeev Datadin, Jamela Ali SC and Donavon Rangiah, while Kayman Sankar was represented by Senior Counsel K Juman-Yassin and attorney Teni Housty.
