Court orders specific performance of a written land gift agreement based on love and affection.

[*260] 1981 March 16

(PIKIS, P.D.C.)

IN THE DISTRICT COURT OF FAMAGUSTA SITTING AT LARNACA

Nicos Odysseos Nicolaou,

Plaintiff,

v.

Androulla Yianni Kile,

Defendant.

(Action No. 145/79).

Contract - Consideration - Agreements made for love and affection - Relationship that must exist between the parties in order to successfully invoke exception to the rule as to consideration - And element of love and affection that must colour it - Section 25(1)(a) of the Contract Law, Cap. 149.

Contract - Specific performance - Land - Rule is to order specific performance and the opposite is the exception - Agreement to donate land out of love and affection

- Order of specific performance - Sections 25(l)(a) and 76(1) of the Contract Law, Cap, 149.

N. Economou, for T. Economou, for the Plaintiff.

T. Koumis, for Z. Toulouras for the Defendant.

JUDGMENT

The following judgment was delivered by:-

PIKIS, P.D.C.:- By an agreement in writing[*261] dated 7th September 1978 the defendant agreed to donate, outof love and devotion, to her

brother, the plaintiff, one thirdof her share in a plot of land, notably plot 759, sheet/plan(SP) 33/44, "Kongilies"

locality, at Frenaros. The agreement was duly executed by the parties and attested by two witnesses. The defendant failed to fulfil the obligations undertaken in the aforesaid agreement whereupon the plaintiff raised the present action seeking the specific enforcement of the agreement and damages in the alternative Panayiotis Mikellis (P.W.2), a land valuer, gave evidence on the value of the land at the time of the execution of the agreement estimating, for the reasons given in his report (exhibit 2) and in evidence before us, the value of one third of the property in question to amount to approximately £1 ,450. The only other witness was the plaintiff who testified that at the time of execution of the agreement relations between the parties were very good.

In the defence it is admitted that defendant is the owner of the property but it is denied that she undertook any binding obligation to transfer any part of the land to the plaintiff. Learned counsel for the defendant, in argument before me, submitted that the agreement-was entered into without consideration and that inasmuch as there was no love and affection between the parties, evidenced by the recourse of plaintiff to Court, the agreement is void and therefore unenforceable. He also argued, although I find it hard to reconcile this argument with the facts of the case, that there can never be valid gift of land in the absence of[*262]conveyance. Counsel for the defendant also raised a point of construction of the agreement between the parties relating to the extent of the property that defendant agreed to transfer. He submitted that it is debatable whether she agreed to transfer one third of the whole or one third of her share in the property, as described in the agreement, notably two thirds, notwithstanding the admission made in the defence that the defendant is the owner of the whole.

I consider it unnecessary to embark on an examination of the principles governing the construction of documents. The meaning to be attributed to a term of the contract is a matter of law for the Judge after a proper ascertainment of the facts. The meaning must be ascertained from the phraseology adopted, read in the context of a document as a whole. (See Aristidou and Another v. Kantonidou and Another (1972) 1 C.L.R.89 - woodhouse v. Nigerian Produce (1971) 1 All E.R.665 (C.A.) - Loucas Limited v. Export Correspondence Department (1972) 2 All E.R. 984 (C.A.) - Halfdan Grieg v. Stirling Coal Corporation (1973) 2 All E.R. 545).

In my judgment the agreement envisaged the transfer by defendant to plaintiff of one third share of the whole of the property. Counsel for the plaintiff invited the Court to pronounce the agreement valid in view of the provisions of s. 25(1) (a) of the Contract Law, Cap. 149 and secondly decree its specific performance in accordance with the provisions of S.76(1), Cap.149.[*263]

Agreements made for Natural Love and Affection

Under the Common Law consideration is essential for the validity of an agreement. By way of exception to that rule proclaimed in s.25(1), Cap. 149, an agreement made without consideration is valid in accordance with s.25(1)(a), Cap.149, provided it is made -

(a) on account of natural love and affection:

(b) between parties standing in a near relation; and

(c) provided it is expressed in writing.

This exception to the rule requiring consideration is modelled on the provisions of s.25(l) of the Indian Trusts Act, 1882. However there are differences between the two enactments inasmuch as the Indian Law requires registration as a prerequisite to validity. It appears that the intention of the Indian legislator was to assimilate agreements made for natural love and affection to. deeds and accord to. them upon registration a like solemnity.

No Cyprus authority was cited on the interpretation of s.25(1) (a) of our Contract Law, I

have considered a number of cases of Indian Courts as analyzed in Pollock & Mulla, 9th ed. , on the relationship that must exist

between the parties in order to successfully invoke this exception to the rule as to consideration and the element of love and affection that must colour it. (See pages 253, 260, 261 and 262). It appears that the parties must be related either "by blood or consanguinity and their relationship must be such[*264]for the two parties to classify as "near relations". Brothers have been held to qualify as near relations.

In my judgment the relationship between the parties by blood or consanguinity must be near enough to qualify objectively given the customs of the country on the subject as near relations. It is unprofitable to define exhaustively the class of near relations in the context of this provision of the Law and content myself with holding that the relationship between plaintiff and defendant, brother and sister, was near enough to make it possible for them to enter into a valid agreement under the provisions of s. 25(1) (a), Cap.149.

There is some conflict in the Indian authorities as to the nature of motivation necessary to give force to an agreement of this kind. As the authors of Pollock and Mulla suggest the better view is that agreements made between near relations for the purpose of reconciling their disputes out of a desire to restore love and affection among near relations is sufficient to validate the agreement.

Certainly when parties profess love and affection, as in this case, as the reason for entering into the agreement 2 and the agreement is expressed in writing, there is no conceivable ground for denying validity to the agreement.

In my judgment all the prerequisites laid down by s.25(l)(a), Cap.149 were satisfied and I so hold.

Intention to Create Legal Relations

On behalf of the defendant it was submitted that the parties did not contemplate entering into a legal relationship;[*265]and made reference to a recent decision of mine on the subject, where there is a detailed analysis of the principles of law in this area, notably Georghiou v. Pieri, Civil Action 117/80, decided on 7th March 1981.I need not go over the principles relevant to determining whether parties to an agreement intend to enter into a legal relationship for, on any view of the agreement between the parties, the creation of a legal relationship was their manifest purpose.

I find that the parties -entered into a valid agreement and what remains to decide is whether the agreement should be specifically enforced.

Specific Performance

In accordance with the provisions of s.76(l) an agreement expressed in writing, and signed at the end thereof by the party to be charged therewith, can be specifically enforced provided this course is not "unreasonable or otherwise "inequitable or impracticable". A different rule applies to the specific performance of contracts for the sale of land, a subject regulated by the provisions of the Sale of Land (Specific Performance) Law, Cap.232, as amended by Law 50/70 and Law 96/72.

Although the agreement of the parties envisaged the transfer of land we are not concerned with a sale but with a valid agreement to gift land. Therefore it is pertinent to examine whether the Court should, in the exercise of its discretion, decree specific performance. In Snell’s Principles of Equity, 27th ed., at p.573 it is stated that in the case of land the rule is to order specific performance and the[*266]opposite the exception. This statement reflects a practice of English Courts of longstanding. Land is capable of exact ascertainment and because of its nature it is deemed to be of peculiar value and interest to the promisee.

I scrutinized the facts of the case in order to ascertain whether there is any reason for departing from this rule. Learned counsel for the defendant invited me not to degree specific performance because we have no evidence other than the admissions' of the parties that the property belongs to the defendant. This argument cannot hold scrutiny for any order that may be made in the action is binding inter partes and cannot possibly affect the rights of any third party. Nor does there appear to be any ground for disputing the assertion of the plaintiff and the admission of the defendant that the latter is the owner of the property. Therefore in the exercise of my discretion I decree that the agreement between the parties should be specifically performed and that plaintiff be registered as the owner of one third of plot 759, sheet/plan 33/44, "Kongilies" locality, Frenaros. I shall not attempt to make an assessment of the damages for in the case the matter goes higher, the Supreme Court will be in an equally good position, as I am at present, to evaluate the only evidence on the subject coming from witness P. Mikellis.

In the result I order the specific performance of the agreement between the parties as hereinabove indicated. Further, the defendant is adjudged to pay the costs of the plaintiff, to be calculated on the scale of claims between £1,000 and £3,000.-

Order for specific performance and Order for costs as above.