Dawn McLean-Sawney Plaintiff v Merlene McGaw-Carter Defendant

JurisdictionCayman Islands
JudgeHenderson, J.
Judgment Date03 February 2015
Judgment citation (vLex)[2015] CIGC J0203-1
Docket NumberCAUSE NO. G292 of 2008
CourtGrand Court (Cayman Islands)
Date03 February 2015
Between:
Dawn McLean-Sawney
Plaintiff
and
Merlene McGaw-Carter
Defendant
[2015] CIGC J0203-1

Henderson, J.

CAUSE NO. G292 of 2008
IN THE GRAND COURT OF THE CAYMAN ISLANDS
1

In this action for specific performance of an option to purchase (and, in the alternative, damages) I disposed of some but not all of the issues in my judgment rendered on December 10, 2013. The parties (who have no legal training) entered into a writtenagreement drafted by themselves containing a lease and an option to purchase. When Ms. McLean-Sawney (the tenant) gave notice that she was electing to exercise the option the landlord, Ms. McGaw-Carter, refused because the deposit required by the agreement had not been paid on time.

2

I have already found that:

  • 1) clause 32 of the written agreement contains an enforceable option to purchase;

  • 2) Ms. McLean-Sawney's failure to make the second instalment payment on time, although an act of default, was waived by Ms. McGaw-Carter;

  • 3) Ms. McGaw-Carter did not give any ‘general extension of time’ to Ms. McClean-Sawney;

  • 4) Ms. McLean-Sawney's failure to make the third and final deposit payment on time (i.e., on January 31, 2006) was a potential act of default under the agreement;

  • 5) Ms. McLean-Sawney waived the requirement in the agreement for delivery of a written notice of the breach; and

  • 6) Ms. McGaw-Carter was entitled to treat the agreement as terminated on March 6, 2006.

Issues
3

I advised counsel that I required argument on two further issues:

  • 1) Was there, in fact and in law, a termination of the option to purchase or was it still extant in June 2008? and

  • 2) What is the impact of the principle laid down in the line of cases summarized inBass Holdings Ltd. v. Morton Music Ltd. [1988] 1 Ch. 493 (CA)?

4

In this judgment I relate only those findings of fact which are relevant to these two issues.

Facts
5

On February 8, 2006 Ms. McGaw-Carter wrote by email to Ms. McLean-Sawney to ask ‘what's going on with’ the unpaid second and third instalments on the option to purchase. The response (on the following day) was:

Honestly, since you and I spoke and I advised I simply didn't have the money — you mentioned if I didn't have it not to worry, I hadn't been pressuring myself about it — instead using my extra money to fix up the house (since I was able to make arrangements to pay things in instalments). My mom's land is still up for sale in George Town-once it sells, I will have no problem paying you the entire CI$8,000…

6

On February 10, 2006 Ms. McLean-Sawney wrote again to say:

I was able to secure CI$4,000 and I was told that I will be able to collect it in two weeks. I am working on the other CI$4,000 and will keep you posted.

7

Ms. McGaw-Carter then asked Ms. McLean-Sawney to send her an ‘official notice’. The latter replied by saying that she would make the second instalment payment ‘on approximately February 24, 2006’ but did not have the funds to pay the third instalment. She said that ‘if permission received I will work on obtaining that in the very near future’. Ms. McGaw-Carter responded that

I do not want you to tell me what you owe me or when you will try to pay me. I just want you to state and acknowledge that you do not have the funds and that this breaches our contract.

8

To this, Ms. McLean-Sawney said:

I acknowledge that I do not have the remaining CI$8,000 of the de posit and this breaches our contract at this time. I intend on forwarding CI$4,000 on approximately February 24, 2006 — once these funds are in your possession I will resend another email updating you on the status of the final balance of CI$4,000.

9

Ms. McLean-Sawney made the second instalment payment on March 10, 2006 by presenting a cheque in that amount to Ms. McGaw-Carter's agent on Grand Cayman (the latter's daughter). The cheque was negotiated. By that date, the third instalment payment was already past due. She then wrote to Ms. McGaw-Carter by email on March 13, 2006 and said:

For your records, I gave Kimberlee CI$4,000 Credit Union check on Friday at 10:15 am. I am working on the other CI$4,000 — will advise you within two weeks on my progress of the final depost (sic).

10

Ms. McGaw-Carter replied by email on the same day and said:

I hope all is well how is the house? The money will be returned to you.

11

The response from Ms. McLean-Sawney (also by email, on the following day) was:

All is fine with the house — doing great. May I ask why the money will be returned?

12

Ms. McGaw-Carter did not return the money and did not respond to Ms. McLean-Sawney's question until March 23, 2006. Her email message of that day said:

Sorry for not getting back to you until now I was so sick when you called and I'm still not 100% better.

Anyway, even though I understand your situation the problem is for 1 we were in the process of buying another home but because you did not make our payments we could not make our down payment. So we had to make alternative arrangements so we decided we would keep our home. And 2 because the price was for house as is which did not include work done by CIDB which increase my mortgage I'm understanding this now changes the price of the house. Which I was willing to just leave and eat the cost myself since I already signed the contract. However, now that I lost out on the deal and I have an increase in cost and you broke the contract, everything would have to be revised and Renegotiated.

13

Seven minutes later she continued:

Nothing is for sure as yet so as for now we just decided to keep the house and that was because of as I said earlier you not making on time payment. This may change but because I did not know what was what we (sic) you this is the conclusion I came to.

14

Ms. McLean-Sawney then replied:

I have no choice but to understand and Boone (sic) to blame but myself. I guess I have learned another hard lesson.

I am uncomfortable living somewhere without a contract. So we will have to renegotiate very soon. Of course there is the matter of my CI$14,000 deposit on a home that as you say you are no longer selling to me due to my breaking the contract And the investments in the house such as guttering, fill, tiling which are all improvements to your home. Am I to understand that I am simply renting with no contract officially until we renegotiate?

15

The response from Ms. McGaw-Carter by email on March23, 2006 was:

This is what I am taking (sic) about Dawn you always make me feel bad when it comes to asking for payment or anything to benefit me. All along I have done things to help you and you could not make good on your part because of what you stated. But you said you had to wait until your mother sold her land to pay me which I stated could be any time.

I just do not know what more you want from me, I am not uncomfortable having you in my home because my opinion is the same of you as before you are a good person. As stated to you before I will be giving you back the $4000 check you gave Kimberlee. As a matter of fact you can call her to collect it I did not he get it from her as yet. Her number is 9270632. I do not want take your money and feel bad about her which is how you are making me feel. When I feel I have been noting (sic) but nice to you.But as long as you are to benefit and I am not is a problem with you and that not fair.

16

After this response nothing more was said about the option to purchase for some considerable time. Ms. McLean-Sawney took no step to obtain repayment of the two instalments she had paid towards the purchase of the house. Ms. McGaw-Carter took no step to repay the two instalments. She could have instructed her daughter Kimberlee to repay Ms. McLean-Sawney but did not do so. Evidently she believed she was entitled to keep the money. Ms. McLean — Sawney continued to reside in the house as a tenant and continued to pay her rent in a timely manner.

17

By letter dated November 8, 2006 Ms. McGaw-Carter advised Ms. McLean — Sawney of the following:

Re: Increase in Month to Month Rent on House #102 Buttonwood Avenue

I write as per your request in our telephone conversation, I am hereby informing you that since the termination of our Lease with a purchase option agreement you have been renting the above home for $1650 per month. I am now informing you in writing as per your request that I am increasing your month to month tenancy rent to $1725.00 per month.

I would also like to inform you that should you decide to end your month to month tenancy to give me 30 days notice as required by law. Upon vacating the premises I will return your full deposit to you within no less than 60 days providing that the home is return (sic) to me in a condition to my satisfaction. Any repairs needed to the above home due to damages done by you will be deducted from the deposit and the balance returned to you.

Should you not agree with any of the above please inform me in writing with 30 days of the above date.

18

On February 14, 2007 Ms. McLean-Sawney received a call from a surveyor who intended to appraise the house. She then wrote by email to Ms. McGaw-Carter to ask if she was planning to sell the property and continued:

I guess this leads us into the uncomfortable conversation of exactly where we proceed from here with my lease that I so called ‘broke’ your acceptance of my deposit in the amount of CI$ 14000 and the monies I have invested into the home which will now increase the value of your home.

19

Ms. McGaw-Carter replied (on the same day):

If I was selling the house you would be the first to know. I have nothing to hide from you Dawn. And just what do you mean you so call broke the lease? You did break the lease and you put it in writing. You are quite aware of the consequences of breaking the lease…

20

The immediate response was:

Yes, I did put it in writing as you requested, but your daughter also...

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