STKITTS DEVELOPMENT CORPORATION v GOLFVIEWDEVEWPMENTLIMlTED [Unsigned]

THEEASTERNCARIBBEAN SUPREME COURT t I I I IN THE HIGH COURT OF JUSTICE SAINT CHRISTOPHER AND NEVIS SAINT CHRISTOPHER CIRCUIT (CIVIL) A.D. 2005 I CLAIM NO: SKBHCV 2000/0123 BE1WEEN: ~ I STKITTS DEVELOPMENT CORPORATION AND Claimant I 1st Defendant I 2nd Defedndant GOLFVIEWDEVEWPMENTLIMlTED MICHAEL SIMANIC I Appearances: Mr. Sylvester Anthony for the Defendant Mr. Frank Walwyn and Mr. Fitzroy Eddy for the Claimant 2008: 6th June Judgment on Assessment ofDamages

[1]BELLE J. This is an admittedly and unfortunately long-standing matter for assessment ofdamages pursuant to an Order of the court made on the 7th day of September 2004. The record shows that after a 9 day trial the court dismissed a claim made against the two Defendants and ordered that the amount ofthe deposits advanced by the Claimant to the 1 st Defendant should be repaid and based on the Claimant's breach of contract that damages and costs should be awarded to the 1 Sl Defendant on its counterclaim, such damages to be assessed.

[2]At the outset counsel for the Claimant submitted that the 1 Sl Defendant should not be heard in these proceedings for assessment of damages because it had failed to pay the Orders for costs in this action made by the Court and the Court ofAppeal. However I have not acceded to the Claimant's request because there has been inordinate delay (almost four years) in making this application. In the circumstances I believe that the court is entitled to hold that the issue of costs would best be sorted out at the end ofthese proceedings when all outstanding issues relating to liability on the Defendants' Counterclaim have been concluded.

SUBMISSIONS

[3]The 1st Defendant's counsel submitted that the court should proceed on the basis that damages for breach of contract should be in the nature of compensation and the measure is the amount of injury sustained by reason of the breach. He cited (Laird v Pim) (1841) 7 M7W474 as referenced in Halsbury's Laws of England 4th Edition Volume 42 at page 183. Counsel argued that on a breach ofcontract for the sale ofland, the vendor is entitled to damages for the loss ofbargain; the aim being to place the injured party so far as money can do, in the position as if the contract had been performed. Damages he submitted can also be claimed for consequential loss suffered as a result of breach of contract.

[4]With regard to consequential loss counsel for the Defendant stated that the vendor ought to receive the damages such as may fairly and reasonably be considered to arise from the breach and cited Hadley v Baxendale (1854) 9 Ex 341. But counsel acknowledged that a party would not receive damages for items that are too remote. The person suffering damage also has a duty to mitigate the loss flowing from the other party's wrongs and he cannot claim damages for any loss, which he ought reasonably to have avoided.

[5]The extent of the duty depends upon the circumstances in which the breach occurred and whether the repudiation was accepted immediately or he waited until the time for performance arrived. But at the end of the day the person claiming damages is required to act reasonably. In that context he submitted that the 1st Defendant's act in securing a construction loan from Barclays Bank to procure construction materials from alternative sources, in one case at an increased price and in another at a reduced price, were reasonable steps to mitigate the loss arising as a result of the breach.

[6]What this amounts to in this case is that the 151 Defendant according to counsel should be able to claim damages for any losses, which are a direct consequence of the Purchaser's breach of contract. In that regard Counsel cited the Defendant's need to obtain a loan for construction financing for EC$2,970,OOO.OO which was personally guaranteed by the 2nd named Defendant and his wife and carried an interest rate of 13.5 %. The total costs of the loan were calculated as interest of $260,940.42, a lending fee of$9,299.90 Stamp duty of$2.67, Deed ofDebenture $3,719.96 and legal fees amounting to $3,952.42 fora total ofUS$277,9 1 5.40. Counsel '. submitted that these expenses were a direct consequence of the breach of the contract by the Claimant and therefore the Defendant is entitled to recover these expenses.

[7]Counsel also mentioned certain material which the Claimant agreed to undertake responsibility for purchasing and shipping on the behalfof the IS! Defendant. The cost of these materials less taxes was CAN$70,220.80. This amount was paid to Carrera Homes Inc. on January 15,1999 by wire transfer to account Number 1161­ 476. He identified the relevant items under this heading as, hand rails and pickets at CAN$23,527.85; interior doors and framesatCAN$37,920.00 and 1000 sheets of plywood at CAN $18,400.00.

[8]Also listed among the losses were the sums ofCAN$23,527.85 and CAN$37,920 tendered towards the purchase of construction materials to the Claimant which construction materials the 151 Defendant never received and had to purchase elsewhere. These sums advanced counsel submitted, should be repaid along with any increased costs incurred. The amount of the increased costs was not mentioned.

[9]Another loan of CAN$65,000.00 was also mentioned by counsel for the I<I Defendant as a consequential loss. This was a loan repaid on the behalf of the Claimant to Claudia Scivoletto, the wife of Jack Scivoletto. These funds were I paid by the 1 S! Defendant on January 26th, 1999 by wire transfer to account number 1161-476, Bank ofMontreal Canada. Although this money was repaid it was advanced again on the Claimant's behalf for the payment of roofing materials from Canadian Metal Building Products in April 1999, a purchase which was to be I paid for by the Claimant and which has never been repaid by the Claimant. This left sums ofCAN$65,OOO.OO and US$45,OOO.OO due and owing to the 151 Defendant by f the Claimant.

I

[10]The sums owing in Damages then according to counsel for the Defendants were. (i) Costs incurred re: loan from Barclays Bank US$277,915.40 I (ii) Amounts advanced on construction materials CAN$61,OOO.OO f (iii) Loan repaid to Claudia Scivoletto CAN$65,OOO.OO (iv) Purchase ofroofing materials US$45,OOO.OO I

[11]Counsel for the Claimant responded that claims for the expenses relating to the loan from Barclays Bank ofUS$ 1. 1 million should fail because the Defendant GDL had an obligation to obtain construction financing under the contract (as amended). I Counsel for the Claimant was of the view that the Court had held at trial that the t agreement between the parties was one ofvendor and purchaser where the Claimant agreed to buy 8 units at a purchase price ofUS$170,000.OO per unit and the purchaser, r the 1SI Defendant was supposed to complete the project. The loan and interest were therefore the 1 ,I Defendant's responsibility.

[12]Counsel further submitted that the claim for damages for the purchase of certain I materials for $70,220.80 did not form part of the purchase and sale agreement I between the parties and was not paid pursuant to that agreement. According to counsel, what the evidence reveals is that Carrera Homes as a favour though not a party to the agreement purchased material for the Defendant company which was provided to the Iso Defendant's agent Mary Simanic. Mary Semanic took possession of the material and then shipped it to the 1 SI Defendant. According to counsel the 1 SI Defendant had the obligation to prove that such material as was missing was the responsibility of the Claimant. Counsel submitted that they had not done so. He observed that moreover the Defendant's agent received the lSI material and made no complaint as to completeness or appropriateness. The f 151 Defendant returned none of the material to Carrera Homes.

[13]Counsel was of the view that this claim should have been made against [ Carrera Homes Inc. Counsel then delved into the claim in more detail. He submitted that with respect to the specific claim about material, on cross-examination Simanic confirmed that the felt paper was inconsequential. He confirmed receiving the 3/8 I I "plywood and having used it. He confirmed receiving the chlorine tablets, but it was agreed by both parties that these tablets were purchased by his daughter, Tanya Simanic. A number of items were listed as faulty. These items included casings, Jambs, doors & hardware. But Simanic looked to a company called Triwin Industries rather than Carrera Homes to fix the problems with the doors, which they did.

[14]Counsel submitted that if the claim was to be considered at all, the 1st Defendant was obliged to prove the quantum of the loss with respect to the sum of CAN$70.220.80. There has to be some evidence to prove how much ofthe material it did not receive, the proper calculations showing deductions for the material it did receive and the evidence that the Claimant was responsible for the loss as a result of breaching the Agreement ofPurchase and Sale. Since the Defendant has not done any of these things the court should not award damages based on the CAN$70,220.80 claim counsel said.

[15]As far as the $65,000 loan is concerned counsel submitted, this loan was used in the project for the Claimant and became the obligation of the 151 Defendant. He referred to a specific finding offact at paragraph 19 ofthe judgment, that pursuant to Amendment #4 (the November 21, 1998 amendment), GDLlthe 1st Defendant was required to repay the loan ofCAN$65,OOO to Claudia Scivoletto. This assertion has no been refuted by counsel and a review of the judgment reveals this finding by the court.

[16]With respect to the sum ofUS$45,OOO for the purchase ofroofing material, Counsel argued there was a clear ruling by the court that the cheque representing the US$45,OOO had not been cashed. Since no money was advanced, there can be no damages sustained as claimed by the 151 Defendant. I agree. Again the fact that the cheque was not cashed does appear as a finding of fact in the court's judgment.

[17]I see the final argument ofcounsel for the Claimant as the most significant however. Here counsel goes back to the basic principle that the Defendant can only be compensated for loss suffered, as a result of the breach. He cannot be placed in a position, which is indeed better than he was in ifthe contract had not been breached. He argued the true measure ofthe damages was the difference between the contract price and the value at the date ofthe breach, ofthe land remaining on the vendor's hands, after taking into account the necessary expenses of raising out of the land the amount of such deficiency. I hold that this is a correct representation of the legal position of the 151 Defendant. The method of calculating the damages is illustrated in the case Johnson (E.) & Co. (Barbados) Ltd v N.S.R. Ltd 49 WIR page 27 and Johnson v Agnew [1980]AC 367.

[18]Counsel confirmed the correctness ofmost ofthe statement ofthe law on damages for breach of contract earlier enunciated by the 1 $I Defendant's counsel and concluded that a vendor left in possession of the land sold, by virtue of the purchaser's default, and suing for damages for breach, should be allowed to recover, besides the amount ofany actual fall in the value ofthe land between the date of the contract and that of the breach, the estimated amount of expenses of raising by sale the deficiency in the sum of money which the purchaser contracted to pay. Otherwise, the vendor would certainly not be put in as good a position as ifthe contract had been performed especially where there has been no fall in value of the land at the date of the breach of contract.

[19]With reference to the factual background then the Claimant's counsel argued that at closing the Claimant was to purchase 8 units at $170,000. On breach, the 15t Defendant elected to affirm the contract and sue for the breach. If damages would therefore follow the principle in the argument above, being the deficiency between the purchase price and the market price all of the evidence showed that there would be no deficiency between the purchase price and the market price. As a result of the breach, the Defendant ended up with 8 units with a market value substantially above what the Claimant agreed to pay. The result ofthe breach was therefore a windfall for the Defendant.

[20]Counsel referred to the evidence in the following terms: i "The evidence from the cross-examination ofMichael Simantc at trial (Thursday, December If, 2003) was that the units were valued by the expert appraiser at I $290,000 each and there was "merit" to that figure. Further evidence at trial showed that the Defendant sold 8 ofthe units in the development in March 2000 for approximately US$I, 465,000, or an average of US$183, 125 per unit. The i ( evidence clearly showed that the Defendant could easily sell the units for at least US$185,000 well above what the Claimant contracted to pay. "

[21]Indeed I perused the transcript ofevidence and noticed that in cross-examination [ Mr. Michael Simanic was asked whether he believed there was any merit to the US$290,000 which was stated in the Bently Report and his answer was "yes." f Further evidence under cross-examination proved that the units were sold for ( sums as high as US$195,OOO.00.

[22]Counsel also argued that the Defendant mitigated its losses by taking advantage I of the strong market for the units and commenced renting out the remaining units. The net rental income per lot was $2400. Since two units comprise a lot, the net rental income per unit is $1,200. There have been no denials of these assertions. According to counsel the remaining units had been rented from March 2000 through I to the end of the triaL Mr. Simanic according to counsel had stated that the units were rented or easily rentable. To the extent that the units were not rented, the ff lSI Defendant, which had control ofthe units, must bear the liability for foregone f rent. There was no attempt by the 1Sl defendant to refute these assertions.

CONCLUSION

[23]In conclusion Counsel for the Claimant argued that the amount ofprofit made over and above the sale price of$170,000 and the amounts realized from the rental ofthe units have to be set-off against any amounts claimed by the Defendant for damages. Under any scenario then the Defendant cannot prove the actions of the Claimant have left it in a worse position by failing to close on the purchase of the 8 units. Again there has been nothing argued to refute these assertions. I !

[24]I am not totally satisfied that the Claimant's answer covers all possible scenarios ofloss which may have been suffered by the 1" Defendant. However based on the I evidence which I have perused from the court transcripts, along with [ the submissions of counsel and the Court's findings at trial, I have to conclude that the 1st Defendant has failed to prove that it suffered any damage as a result of the Claimant's breach ofcontract. I accept that on the evidence the claims related to the US$I.1 million loan from Barclays Bank and the sum ofCAN$65,OOO would have been incurred in any event to complete the project. I also find the sums spent on sourcing new material have not been specifically set offagainst the value ofthe material received in good condition and as a matter of mixed fact and law the 1'( Defendant has not shown that the Claimant was responsible for the deficiencies in the materials which have not been sufficiently itemized. As counsel for the Claimant pointed out there is no clear evidence pursuant to a chain of custody to show that the goods were received in the condition described and no evidence to quantify the amount of the damage suffered if that was the case. But in any event the materials were not provided by the Claimant.

[25]I also proceed on the basis that the Court found as a fact at trial, that the repayment ofthe loan for $65,000 to Claudia Scivoletto was part ofthe agreement and not an expense accruing from the breach.

[26]In summary I note that the 1st Defendant was entitled to claim that it should be put in the position that it would have been in had the Claimant discharged its obligations under the agreement. Any damages claimed would be based on evidence that it suffered loss as a result ofthe Claimant's failure to perform. It is noted as a matter of fact that the agreement referred to, would be that which was amended on a number ofoccasions. Any thing required to be done as a condition ofthe amended agreement would be an obligation ofthe agreement and could not be considered a result ofthe breach. An example ofthis is the loan ofUS$I.1 million which appears to be an item added in an amendment to the agreement. It is therefore fair to say that based on the findings above the 1'( Defendant has failed to prove that it suffered any loss attributable to the Claimant's breach of the amended contract.

[27]In the circumstances I find that the 1 st Defendant's claim for damages fails, since it is unable to prove such damages. Consequently the 1 st Defendant will pay the Claimant's costs ofthe assessment ofdamages proceedings pursuant to Part 65 of the CPR 2000 or as agreed. I would be willing to hear counsel on the issue ofcosts in due course if they are not willing or able to arrive at an agreed figure.

FRANCIS H V BELLE

High Court Judge

THEEASTERNCARIBBEAN SUPREME COURT IN THE HIGH COURT OF JUSTICE SAINT CHRISTOPHER AND NEVIS SAINT CHRISTOPHER CIRCUIT (CIVIL) A.D. 2005 CLAIM NO: SKBHCV 2000/0123 BE1WEEN: STKITTS DEVELOPMENT CORPORATION AND GOLFVIEWDEVEWPMENTLIMlTED MICHAEL SIMANIC Appearances: Mr. Sylvester Anthony for the Defendant Mr. Frank Walwyn and Mr. Fitzroy Eddy for the Claimant 2008: 6th June Judgment on Assessment ofDamages I I I t I ~ I Claimant I 1st Defendant I I 2nd Defedndant

[1]BELLE J. This is an admittedly and unfortunately long-standing matter for assessment ofdamages pursuant to an Order of the court made on the 7th day of September 2004. The record shows that after a 9 day trial the court dismissed a claim made against the two Defendants and ordered that the amount ofthe deposits advanced by the Claimant to the 1 st Defendant should be repaid and based on the Claimant’s breach of contract that damages and costs should be awarded to the 1 Sl Defendant on its counterclaim, such damages to be assessed.

[2]At the outset counsel for the Claimant submitted that the 1 Sl Defendant should not be heard in these proceedings for assessment of damages because it had failed to pay the Orders for costs in this action made by the Court and the Court ofAppeal. However I have not acceded to the Claimant’s request because there has been inordinate delay (almost four years) in making this application. In the circumstances I believe that the court is entitled to hold that the issue of costs would best be sorted out at the end ofthese proceedings when all outstanding issues relating to liability on the Defendants' Counterclaim have been concluded. SUBMISSIONS

[3][4]

[7]2 The 1st Defendant’s counsel submitted that the court should proceed on the basis that damages for breach of contract should be in the nature of compensation and the measure is the amount of injury sustained by reason of the breach. He cited (Laird v Pim) (1841) 7 M7W474 as referenced in Halsbury’s Laws of England 4th Edition Volume 42 at page 183. Counsel argued that on a breach ofcontract for the sale ofland, the vendor is entitled to damages for the loss ofbargain; the aim being to place the injured party so far as money can do, in the position as if the contract had been performed. Damages he submitted can also be claimed for consequential loss suffered as a result of breach of contract. With regard to consequential loss counsel for the Defendant stated that the vendor ought to receive the damages such as may fairly and reasonably be considered to arise from the breach and cited Hadley v Baxendale (1854) 9 Ex 341. But counsel acknowledged that a party would not receive damages for items that are too remote. The person suffering damage also has a duty to mitigate the loss flowing from the other party’s wrongs and he cannot claim damages for any loss, which he ought reasonably to have avoided. The extent of the duty depends upon the circumstances in which the breach occurred and whether the repudiation was accepted immediately or he waited until the time for performance arrived. But at the end of the day the person claiming damages is required to act reasonably. In that context he submitted that the 1st Defendant’s act in securing a construction loan from Barclays Bank to procure construction materials from alternative sources, in one case at an increased price and in another at a reduced price, were reasonable steps to mitigate the loss arising as a result of the breach. What this amounts to in this case is that the 151 Defendant according to counsel should be able to claim damages for any losses, which are a direct consequence of the Purchaser’s breach of contract. In that regard Counsel cited the Defendant’s need to obtain a loan for construction financing for EC$2,970,OOO.OO which was personally guaranteed by the 2nd named Defendant and his wife and carried an interest rate of 13.5 %. The total costs of the loan were calculated as interest of $260,940.42, a lending fee of$9,299.90 Stamp duty of$2.67, Deed ofDebenture $3,719.96 and legal fees amounting to $3,952.42 fora total ofUS$277,9 1 5.40. Counsel ‘. submitted that these expenses were a direct consequence of the breach of the contract by the Claimant and therefore the Defendant is entitled to recover these expenses. Counsel also mentioned certain material which the Claimant agreed to undertake responsibility for purchasing and shipping on the behalfof the IS! Defendant. The cost of these materials less taxes was CAN$70,220.80. This amount was paid to Carrera Homes Inc. on January 15,1999 by wire transfer to account Number 1161476. He identified the relevant items under this heading as, hand rails and pickets at CAN$23,527.85; interior doors and framesatCAN$37,920.00 and 1000 sheets of plywood at CAN $18,400.00.

[5][6]

[9]Another loan of CAN$65,000.00 was also mentioned by counsel for the I<I Defendant as a consequential loss. This was a loan repaid on the behalf of the Claimant to Claudia Scivoletto, the wife of Jack Scivoletto. These funds were I paid by The 1 S! Defendant on January 26th, 1999 by wire transfer to account number 1161-476, Bank ofMontreal Canada. Although this money was repaid it was advanced again on the Claimant’s behalf for the payment of roofing materials from Canadian Metal Building Products in April 1999, a purchase which was to be I paid for by the Claimant and which has never been repaid by the Claimant This left sums ofCAN$65,OOO.OO and US$45,OOO.OO due and owing to the 151 Defendant by f the Claimant. I

[8]Also listed among the losses were the sums ofCAN$23,527.85 and CAN$37,920 tendered towards the purchase of construction materials to the Claimant which construction materials the 151 Defendant never received and had to purchase elsewhere. These sums advanced counsel submitted, should be repaid along with any increased costs incurred. The amount of the increased costs was not mentioned.

[13]Counsel was of the view that this claim should have been made against [ Carrera Homes Inc. Counsel then delved into the claim in more detail. He submitted that with respect to the specific claim about material, on cross-examination Simanic confirmed that the felt paper was inconsequential. He confirmed receiving the 3/8 I I “plywood and having used it. He confirmed receiving the chlorine tablets, but it was agreed by both parties that these tablets were purchased by his daughter, Tanya Simanic. A number of items were listed as faulty. These items included casings, Jambs, doors & hardware. But Simanic looked to a company called Triwin Industries rather than Carrera Homes to fix the problems with the doors, which they did.

[10]The sums owing in Damages then according to counsel for the Defendants were. (i) Costs incurred re: loan from Barclays Bank US$277,915.40 I (ii) Amounts advanced on construction materials CAN$61,OOO.OO I f (iii) Loan repaid to Claudia Scivoletto CAN$65,OOO.OO (iv) Purchase ofroofing materials US$45,OOO.OO

[11]Counsel for the Claimant responded that claims for the expenses relating to the loan from Barclays Bank ofUS$ 1. 1 million should fail because the Defendant GDL had an obligation to obtain construction financing under the contract (as amended). I Counsel for the Claimant was of the view that the Court had held at trial that the t agreement between the parties was one ofvendor and purchaser where the Claimant agreed to buy 8 units at a purchase price ofUS$170,000.OO per unit and the purchaser, r the 1SI Defendant was supposed to complete the project. The loan and interest were therefore the 1 ,I Defendant’s responsibility.

[12]Counsel further submitted that the claim for damages for the purchase of certain I materials for $70,220.80 did not form part of the purchase and sale agreement I between the parties and was not paid pursuant to that agreement. According to counsel, what the evidence reveals is that Carrera Homes as a favour though not a party to the agreement purchased material for the Defendant company which was provided to the Iso Defendant’s agent Mary Simanic. Mary Semanic took possession of the material and then shipped it to the 1 SI Defendant. According to counsel the 1 SI Defendant had the obligation to prove that such material as was missing was the responsibility of the Claimant. Counsel submitted that they had not done so. He observed that moreover the Defendant’s agent received the lSI material and made no complaint as to completeness or appropriateness. The f 151 Defendant returned none of the material to Carrera Homes.

[14]Counsel submitted that if the claim was to be considered at all, the 1st Defendant was obliged to prove the quantum of the loss with respect to the sum of CAN$70.220.80. There has to be some evidence to prove how much ofthe material it did not receive, the proper calculations showing deductions for the material it did receive and the evidence that the Claimant was responsible for the loss as a result of breaching the Agreement ofPurchase and Sale. Since the Defendant has not done any of these things the court should not award damages based on the CAN$70,220.80 claim counsel said.

[15]As far as the $65,000 loan is concerned counsel submitted, this loan was used in the project for the Claimant and became the obligation of the 151 Defendant. He referred to a specific finding offact at paragraph 19 ofthe judgment, that pursuant to Amendment #4 (the November 21, 1998 amendment), GDLlthe 1st Defendant was required to repay the loan ofCAN$65,OOO to Claudia Scivoletto. This assertion has no been refuted by counsel and a review of the judgment reveals this finding by the court.

[16]With respect to the sum ofUS$45,OOO for the purchase ofroofing material, Counsel argued there was a clear ruling by the court that the cheque representing the US$45,OOO had not been cashed. Since no money was advanced, there can be no damages sustained as claimed by the 151 Defendant. I agree. Again the fact that the cheque was not cashed does appear as a finding of fact in the court’s judgment.

[17]I see the final argument ofcounsel for the Claimant as the most significant however. Here counsel goes back to the basic principle that the Defendant can only be compensated for loss suffered, as a result of the breach. He cannot be placed in a position, which is indeed better than he was in ifthe contract had not been breached. He argued the true measure ofthe damages was the difference between the contract price and the value at the date ofthe breach, ofthe land remaining on the vendor’s hands, after taking into account the necessary expenses of raising out of the land the amount of such deficiency. I hold that this is a correct representation of the legal position of the 151 Defendant. The method of calculating the damages is illustrated in the case Johnson (E.) & Co. (Barbados) Ltd v N.S.R. Ltd 49 WIR page 27 and Johnson v Agnew [1980]AC 367.

[18]Counsel confirmed the correctness ofmost ofthe statement ofthe law on damages for breach of contract earlier enunciated by the 1 $I Defendant’s counsel and concluded that a vendor left in possession of the land sold, by virtue of the purchaser’s default, and suing for damages for breach, should be allowed to recover, besides the amount ofany actual fall in the value ofthe land between the date of the contract and that of the breach, the estimated amount of expenses of raising by sale the deficiency in the sum of money which the purchaser contracted to pay. Otherwise, the vendor would certainly not be put in as good a position as ifthe contract had been performed especially where there has been no fall in value of the land at the date of the breach of contract.

[19]With reference to the factual background then the Claimant’s counsel argued that at closing the Claimant was to purchase 8 units at $170,000. On breach, the 15t Defendant elected to affirm the contract and sue for the breach. If damages would therefore follow the principle in the argument above, being the deficiency between the purchase price and the market price all of the evidence showed that there would be no deficiency between the purchase price and the market price. As a result of the breach, the Defendant ended up with 8 units with a market value substantially above what the Claimant agreed to pay. The result ofthe breach was therefore a windfall for the Defendant.

[20]Counsel referred to the evidence in the following terms: i "The evidence from the cross-examination ofMichael Simantc at trial (Thursday, December If, 2003) was that the units were valued by the expert appraiser at I $290,000 each and there was "merit" to that figure. Further evidence at trial showed that the Defendant sold 8 ofthe units in the development in March 2000 for approximately US$I, 465,000, or an average of US$183, 125 per unit. The i ( evidence clearly showed that the Defendant could easily sell the units for at least US$185,000 well above what the Claimant contracted to pay. “

[21]Indeed I perused the transcript ofevidence and noticed that in cross-examination [ Mr. Michael Simanic was asked whether he believed there was any merit to the US$290,000 which was stated in the Bently Report and his answer was "yes." f Further evidence under cross-examination proved that the units were sold for ( sums as high as US$195,OOO.00.

[22]Counsel also argued that the Defendant mitigated its losses by taking advantage I of the strong market for the units and commenced renting out the remaining units. The net rental income per lot was $2400. Since two units comprise a lot, the net rental income per unit is $1,200. There have been no denials of these assertions. According to counsel the remaining units had been rented from March 2000 through I to the end of the triaL Mr. Simanic according to counsel had stated that the units were rented or easily rentable. To the extent that the units were not rented, the f f lSI Defendant, which had control ofthe units, must bear the liability for foregone f rent. There was no attempt by the 1Sl defendant to refute these assertions. CONCLUSION

[27]In the circumstances I find that the 1 st Defendant’s claim for damages fails, since it is unable to prove such damages. Consequently the 1 st Defendant will pay the Claimant’s costs ofthe assessment ofdamages proceedings pursuant to Part 65 of the CPR 2000 or as agreed. I would be willing to hear counsel on the issue ofcosts in due course if they are not willing or able to arrive at an agreed figure. FRANCIS H V BELLE High Court Judge Printed at the Government Printery. St Kitts. W I.

[23]In conclusion Counsel for the Claimant argued that the amount ofprofit made over and above the sale price of$170,000 and the amounts realized from the rental ofthe units have to be set-off against any amounts claimed by the Defendant for damages. Under any scenario then the Defendant cannot prove the actions of the Claimant have left it in a worse position by failing to close on the purchase of the 8 units. Again there has been nothing argued to refute these assertions. I !

[24]I am not totally satisfied that the Claimant’s answer covers all possible scenarios ofloss which may have been suffered by the 1" Defendant. However based on the I evidence which I have perused from the court transcripts, along with [ the submissions of counsel and the Court’s findings at trial, I have to conclude that the 1st Defendant has failed to prove that it suffered any damage as a result of the Claimant’s breach ofcontract. I accept that on the evidence the claims related to the US$I.1 million loan from Barclays Bank and the sum ofCAN$65,OOO would have been incurred in any event to complete the project. I also find the sums spent on sourcing new material have not been specifically set offagainst the value ofthe material received in good condition and as a matter of mixed fact and law the 1'( Defendant has not shown that the Claimant was responsible for the deficiencies in the materials which have not been sufficiently itemized. As counsel for the Claimant pointed out there is no clear evidence pursuant to a chain of custody to show that the goods were received in the condition described and no evidence to quantify the amount of the damage suffered if that was the case. But in any event the materials were not provided by the Claimant.

[25]I also proceed on the basis that the Court found as a fact at trial, that the repayment ofthe loan for $65,000 to Claudia Scivoletto was part ofthe agreement and not an expense accruing from the breach.

[26]In summary I note that the 1st Defendant was entitled to claim that it should be put in the position that it would have been in had the Claimant discharged its obligations under the agreement. Any damages claimed would be based on evidence that it suffered loss as a result ofthe Claimant’s failure to perform. It is noted as a matter of fact that the agreement referred to, would be that which was amended on a number ofoccasions. Any thing required to be done as a condition ofthe amended agreement would be an obligation ofthe agreement and could not be considered a result ofthe breach. An example ofthis is the loan ofUS$I.1 million which appears to be an item added in an amendment to the agreement. It is therefore fair to say that based on the findings above the 1'( Defendant has failed to prove that it suffered any loss attributable to the Claimant’s breach of the amended contract.