The Caribbean Court of Justice (CCJ) has rescinded a December 16, 1992 agreement for the sale of 73/83 Brickdam which was made in a hospital in Canada between the elderly owner, Hermelita Feinmesser and a friend, Janette Narine.
In its March 17, 2016 ruling, the CCJ allowed an appeal by Errol Campbell, set aside an order of the Court of Appeal and upheld the judgment of trial judge Roxane George.
Narine’s counter-claim for specific performance of the Agreement of December 16, 1992 was dismissed and she has to give up possession of the property situated at 73/83 Brickdam, Georgetown, to the Appellant within six months of the date of the judgment.
Further, Narine is to pay the Appellant, Campbell, his costs.
The appellant is the executor of the Estate of Feinmesser, who was the aunt of his wife, Nadya. Feinmesser died on August 2, 1993 and was the owner of the property in dispute situated at 73/83 Brickdam. Narine, and the deceased were close friends and after the death of her husband in 1983, Feinmesser invited the divorced Narine and her children to move into the Brickdam premises and live with her.
In 1986, Feinmesser migrated to Canada and left Narine and her daughter and son-in-law in the Brickdam premises. At the instigation of Feinmesser, Narine in October 1987 migrated to Canada, where she cohabited in a house and then a bungalow purchased by Feinmesser. The judgment said that the two of them visited a lawyer for Feinmesser to make a will in Narine’s favour. There was a copy in their joint bank box.
In December 1992, while visiting her daughter and newborn granddaughter in Guyana, Narine became aware that Feinmesser had become ill and was hospitalised. During her stay in hospital Feinmesser spent time in the Intensive Care Unit and received the last rites from a priest before recovering and going to stay with Campbell and his wife, Nadya. On her urgent return to Canada and their bungalow home, the judgment said, Narine visited Feinmesser in the hospital. When Feinmesser was in an open ward and connected to a heart-monitor she signed on December 16, 1992 the now rescinded agreement for the sale of the Brickdam property to Narine.
The agreement was witnessed by an attorney, Mr Akai, and his secretary, and acknowledged receipt of a payment by Narine of Cdn$1,500 (representing $100,000) towards payment of the purchase price of $2,100,000. Narine said she was unaware whether the value of the property was more or less than the purchase price, though expert evidence at the trial revealed that the property was then worth $5,200,000. Narine told the court that Feinmesser had earlier contacted Feinmesser’s attorney, Akai, and instructed him to prepare the agreement, and in Narine’s presence called Akai on December 16, 1992 to come to the hospital for the agreement to be signed. On leaving the hospital, with medication for heart, lung and kidney problems, Feinmesser went to stay with the Campbells before she was hospitalised in July 1993, dying on August 2, 1993. The judgment said that her will of May 28, 1993 essentially left her estate (which included the Brickdam property) to her niece, Nadya, and Nadya’s father equally.
Letter
On June 15, 1993, a letter was sent to Narine at the Brickdam address on Feinmesser’s behalf by her Guyanese attorney, Charles Ramson. The judgment said that the letter sought an abrogation of the agreement and stated, inter alia, that Feinmesser had been “persuaded” by Narine to execute the Agreement at a time when Feinmesser believed that she was terminally ill. The letter also alleged that no consideration had been given at the execution of the Agreement. Although Narine was informed of the letter by her daughter, the judgment said there was no response to that letter until Narine caused her lawyer in Guyana to send a letter to Campbell dated December 20, 1994 seeking to enforce the agreement. Narine accepted that Feinmesser had visited her in the bungalow after Narine knew of Feinmesser’s lawyer’s June 1993 letter but Narine had not raised it with her. Narine took no further action until proceedings were brought against her.
The judgment said that in December 1996 Campbell, in his capacity as executor started proceedings in the High Court against Narine to set aside the agreement on the ground that Feinmesser had been induced to sign the agreement when terminally ill in hospital and she had received no consideration, notwithstanding the acknowledgment of payment. Narine replied that a valid agreement did in fact exist and that Feinmesser was aware of the terms of the agreement in which she acknowledged that consideration had passed. In this regard, Narine alleged that she had paid over Cdn$1,500 to Feinmesser in the hospital, representing $100,000, towards the purchase of the property. She counter-claimed specific performance of the agreement.
The High Court here considered that the pivotal issue for determination was whether Feinmesser, given the close relationship between her and Narine, as well as her fragile medical state and the gross undervaluing of the sale price, was capable of executing the agreement of her own informed volition. Justice George determined that Narine was a trusted companion to the deceased, and that, based on this relationship and the suspicious circumstances around the execution of the agreement, the onus was on Narine to present evidence that there was no undue influence or that the bargain was not unconscionable. She had not done so, so the judge found that Narine had in fact exerted undue influence over Feinmesser. She also found that Narine had secured an unconscionable bargain. In particular, the judge had concerns over the credibility of the evidence given by Narine and was of the view that her demeanour before the court suggested that she was not being completely forthcoming. The judge also concluded that the Cdn$1,500 had not actually been paid over to Feinmesser in hospital. The judge therefore ordered that the agreement be rescinded and dismissed Narine’s counterclaim.
Court of Appeal
The majority of the Guyana Court of Appeal disagreed with Justice George. The CCJ judgment said that the Court of Appeal strongly criticised the pleadings as insufficiently pleading the material facts in support of the claim, and not mentioning “undue influence” or “unconscionable bargain”. It held that the Cdn$1,500 had been paid over to Feinmesser by Narine and there was no sufficient relationship of trust and confidence to the degree necessary to establish undue influence and that the undervalued agreement was not suspicious but explainable on the grounds of generosity and friendship. Furthermore, the agreement could not be set aside as an unconscionable bargain. Consequently, the Court of Appeal set aside the decision of Justice George and granted Narine an order for specific performance of the agreement.
Minority judgment
However, in her minority judgment, Justice Yonette Cummings-Edwards took a different position from the majority of the Court of Appeal in relation to the findings of fact made by the trial judge. She noted that Justice George provided a detailed account of her findings and that such findings were premised upon careful consideration of the evidence that was before her. As such, Justice Cummings-Edwards said that her findings were more than a mere “impression” but, rather, were the result of a detailed examination of the evidence presented by both parties. Justice Cummings-Edwards was of the view that the court should not interfere with the trial judge’s findings of fact.
The CCJ, agreeing with the minority judgment of Justice Cummings-Edwards as to undue influence, found that there was no sufficient basis for the Court of Appeal to interfere with the trial judge’s conclusion that undue influence had been established.
The CCJ in its judgment stated that whether a transaction has been brought about by undue influence is a question of fact and the legal burden of establishing it rests on the person alleging it. In this regard, the CCJ said the Court’s focus should be an examination of the extent of trust and confidence reposed by Feinmesser in Narine coupled with a consideration of the circumstances surrounding the agreement to ascertain whether the transaction created a suspicion that it was not readily explicable by the women’s relationship.
Once such a suspicion arose, the CCJ said that the evidential burden then shifted to Narine. For her to counter this inference of undue influence, it was necessary to show that the transaction was the result of full, free and informed thought. In this regard, the CCJ opined that the receipt of legal advice by the donor can assist in establishing that the gift was so made but the nature of Akai’s involvement was unclear since he died before the case was heard and there was no evidence of any advice given by him.
Based on the application of these principles, the CCJ held that an appellate court could not interfere with the finding of the trial judge that (1) the relationship between Narine and Feinmesser was of a sufficiently influential character that, coupled with the suspicious circumstances around the agreement made at the hospital for the sale of a house valued at $5.2 million for $2.1 million, an inference arose that the agreement had been tainted by undue influence. The CCJ said that the appellate court could also not interfere with the finding of the trial judge that Narine had not been able to rebut this inference by showing that the undervalue agreement was the result of Feinmesser’s full, free and informed thought.
The CCJ adverted to the remarks of Lord Sumner in SS Hontestroom (Owners) v SS Sagaporack (Owners) [1927] AC 37 at 47 that “…not to have seen the witnesses puts appellate judges in a permanent position of disadvantage as against the trial judge and, unless it can be shown that he has failed to use or has palpably misused his advantage, the higher court ought not to take the responsibility of reversing conclusions so arrived at, merely on the result of their own comparisons and criticisms of the witnesses and of their own view of the probabilities of the case…If his estimate of the man forms any substantial part of the reasons for his judgment the trial judge’s conclusions of fact should stand.”
The CCJ also addressed the allegation that the Appellant (Campbell) had not sufficiently pleaded his case as it related to undue influence and unconscionable bargain in the statement of claim in the High Court. The CCJ considered that the requirements of RSC Order 17 rule 6 as to fully pleading material facts were not satisfied, but that Narine’s attorney had not taken steps to raise the issue. The CCJ said it is supremely important that parties to litigation ensure that the material aspects of their pleadings are as detailed as possible.
The CCJ thereby allowed the appeal and set aside the order of the Court of Appeal. Narine is also to pay the Appellant’s costs as follows.
(i) In relation to the appeal before the CCJ, those costs have been agreed by counsel at $2,700,000.
(ii) In relation to the High Court proceedings, these costs are the $50,000 originally awarded to Campbell.
iii) In relation to the Court of Appeal, the figure for Campbell’s costs shall be the amount of $150,000 corresponding to the costs awarded by the Court of Appeal to Narine.
