HEB Enterprises Ltd and another (Respondents) v Bernice Richards (as Personal Representative of the Estate of Anthony Richards, Deceased) (Appellant) (Cayman Islands)

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Case summary

Case ID

JCPC/2020/0087

Jurisdiction

Cayman Islands

Parties

Appellant(s)

Bernice Richards (as Personal Representative of the Estate of Anthony Richards Deceased)

Respondent(s)

HEB Enterprises Ltd and another

Issue

This appeal concerns two long term agreements for the sale of property. The purchase price was advanced by Mr Richards to HEB by way of monthly instalments together with interest, but completion did not occur. Mr Richards took possession of the properties once the payments began.The Judicial Committee of the Privy Council is asked to consider whether the Court of Appeal was correct to determine that there had been a total failure of consideration, but that Mr Richard's was not entitled to recover the interest payments because he had enjoyed a real benefit in the form of the right to possession of the properties, and the value of this possession, referred to as "mesne profits" by the Court of Appeal, had to be accounted for in an adjustment to Mr Richard’s recovery in restitution.

Facts

Mr Richards sought to purchase two parcels of land from HEB within a commercial developed in Grand Cayman. "Lot 1" in December 1994 and "Lot 2" in July 1997 (referred to collectively as the "Lots").Under the purchase agreements, the two transactions were structured such that Mr Richards would pay a deposit to HEB with the balance of the purchase price to be paid by way of instalments, in each case subject to interest of 12 per cent. per annum. The term of each agreement was 20 years. Title to the Lots would pass to Mr Richards only after the final instalment payment was made to HEB. It was agreed by the parties that Mr Richards would be entitled to take possession of the Lots, and use them for his commercial purposes, once payment of the instalments began. The purchase agreements themselves did not provide for this occupation or for any rent to be paid in relation to it.Mr Richards was unable to continue to make the required payments. By February 2015, there were varying sums outstanding in relation to each Lot. Mr Richards repudiated the agreements, following which HEB treated themselves as discharged from further performance of their obligations under the agreements. Mr Richards claimed return of the payments of principal and the interest payments he had made to HEB, on the basis that there had been a total failure of basis on which the payments were made.