Belitza Marling Sagaray Silva v Replay Destinations (Bah) Ltd

• Jurisdiction: Bahamas
• Judge: Mr. Justice Jon Isaacs, JA,Madam Justice Crane-Scott, JA,Sir Michael Barnett Kt., P
• Judgment Date: 25 January 2023
• Neutral Citation: BS 2023 CA 6
• Docket Number: SCCivApp. No. 52 of 2022
• Court: Court of Appeal (Bahamas)

IN THE COURT OF APPEAL

Before:

The Honourable Sir Michael Barnett, P

The Honourable Mr. Justice Isaacs, JA

The Honourable Madam Justice Crane-Scott, JA

SCCivApp. No. 52 of 2022

Between

Belitza Marling Sagaray Silva

Appellant

and

Replay Destinations (Bah) Ltd

Respondent

APPEARANCES:

Mr. Michael Scott, QC, with Ms. Marnique Knowles, Counsel for the Appellant

Mr. Raynard Rigby, QC, with Ms. Asha Lewis, Counsel for the Respondents

Civil Appeal — Contract — Agreement for sale — Section 4 of the Coveyancing and Law of Property Act — Law of property and Conveyancing (Condominium) Act

Belitza Marling Sagaray-Silva entered into an Agreement for Sale with Replay Destinations (Bahamas) Ltd. for the purchase of Penthouse 901, One Ocean Condo Place Condominium, Paradise Island. The penthouse was offered for sale at US$ 4,100,000.000, of which $410,000.00 was paid as a deposit. Unit 901 was undergoing extensive renovations while it was being marketed and was advertised as containing 6,165 sq. ft. of living space. However, the Declaration registered under the Condominium Act described it as comprising 4,801 sq. ft. The transaction failed to close within the original time frame, but the Agreement provided for its continuance unless one of the parties issued a notice to complete. The purchaser issued a notice to complete on 8 February, 2019, identifying four issues that were said to be in default and giving the vendor until 1 March, 2019 (21 days from the notice) to make good the default. Numerous letters/emails were exchanged between the parties however, in May of 2019 the Appellant filed an Originating Summons seeking a Declaration that she had effectively rescinded the agreement for sale and an Order that the Respondent return the deposit. The judge found that she was not entitled to rescind the Agreement for Sale. The appellant now seeks to overturn the decision of Klein J and seeks a declaration from this Court that the Respondent was entitled to rescind the contract for sale/purchase of the said unit and an order for the return to her of the deposit. The court heard the parties.

Held (Barnett, P dissenting): appeal dismissed. The Appellant shall pay the Respondent's costs of the appeal, certified fit for two attorneys-at-law, such costs to be taxed if not agreed.

Per The Honourable Mr. Justice Jon Isaacs, JA: The Agreement between the parties recognized that the legal description of the Unit was as it appeared in the amended Declaration. The respondent could not sell any greater interest in the Unit than what was to be found in the Declaration. The purchaser accepted this position albeit, quite possibly, with the understanding that the respondent would have to amend the Declaration so that the area of the Unit was accurately reflected therein.

Mr. Scott, attorney for the appellant submitted that the Judge ought to have implied terms in the Agreement to give it business efficacy or as it appears in the ground, “ to apply a purposive and/or sensible construction to the Contract”. The short answer to Mr. Scott's complaint is to be found in clauses 10 and 11 of the Agreement; and in clause 28 of the Agreement, to wit, where the following appears: “therefore, purchaser shall write in below any representations or promises that are not set forth in this agreement but that have been made by seller or its purported agents or employees and upon which purchaser is relying in making this purchase.”

The appellant did not inscribe any promise or representation in the Agreement to the effect that the Declaration would be amended before the sale went through; hence, she is impaled on her own failure to do so and bound by “the express provisions of the instrument”.

The Judge has done precisely what Mr. Scott contends for, that is, “apply a purposive and/or sensible construction to the Contract”.

Attorney-General of Belize v Belize Telecom Ltd. and another [2009] UKPC 10 considered

Per The Honourable Madam Justice Crane-Scott, JA (Concurring): The Appellant was aware at the time she entered into the Agreement in July 2018 that she was purchasing a renovated condominium (Unit 901) the area of which was considerably larger than the formal legal description shown in the plans attached to the Condominium Declaration. The Appellant was fully aware of the issues relating to size of the unit as a result of renovations. She specifically contracted to take the title to the property described by reference to the plans attached to the Declaration of Condominium.

Both parties were (as the judge found) also aware that an amendment to the Declaration would at some stage be required to address the increased square footage of Unit 901 and to adjust its appurtenant unit entitlement in the common property. The issues relating to the increased size of the unit were obvious from the plans attached to the Declaration of Condominium and constituted a defect in title which was known to both parties at the time the Agreement was signed. Despite being aware of the defect in title, the Appellant failed, before signing the Agreement, to require the inclusion therein of a condition precedent which would have expressly obligated the vendor to secure the necessary amendment to the Declaration prior to completion of the sale.

In those circumstances, I am satisfied that the judge was correct in law when he found (as he did at para [95]) that the Appellant contracted to take the title to the property described by reference to the plans attached to the Declaration of Condominium and must be deemed to have accepted whatever risks were associated therewith. I agree that grounds 1, 2 and 3 should be dismissed.

The Appellant is bound by the express terms of the Agreement which she signed.

The judge was correct in law when he found that the Appellant contracted to take the title to the property described by reference to the plans attached to the Declaration of Condominium and must be deemed to have accepted whatever risks were associated therewith.

Bahamasair Holdings Ltd v. Messier Dowty Inc [2018] UKPC 25 considered

Central Bank of Ecuador v. Conticorp [2015] UKPC 11 considered

Pryke v. Waddington, (1852) 68 ER 813 mentioned

Roberts Realty Glinton v. Albacore Developments Ltd, [1988] BHS J. No. 69 considered

Treco v. Shutley [1996] BHS J No. 123 considered

Willson v. Greene [1971] 1 WLR 635 mentioned

Per The Honourable Sir Michael Barnett Kt., P (Dissenting): The key question was not “what is the nature of the title that the purchaser agreed to accept from the vendor” but rather; what was the property that the vendor agree to sell and the purchaser agree to buy by the written agreement of July, 2018.

It is a basic principle of that in construing a contract the object sought to be achieved is to ascertain what was the mutual intentions of the parties as to their legal obligations as expressed by the words used.

A proper construction of the agreement the Vendor agreed to sell and the purchaser agreed to buy a unit of 6,000 square feet and not a unit of 5,000 square feet. To limit the agreement to one of the penthouse suites with less than 5,000 sq. ft. identified in the 2005 Declaration as amended in 2010 would be to fail to give any effect to Exhibit A.

The evidence is undisputed that Unit 901 was advertised as a 6,000 sq. ft. unit. The evidence lead at the trial is unequivocal that at the time the agreement was being negotiated the condominium building was under renovation and there was no penthouse unit with a square footage as set out in the plans to the 2005 Declaration. It was understood by the parties that when the renovation was completed the penthouse on the ninth floor would be in excess of 6,000 square feet.

At the time of the purchaser's termination of the contract, the vendor could not deliver title to a unit of 6,000 square feet. Much of that square footage was part of the common property to which the vendor Replay did not have title. The purchaser was in my judgment entitled to rescind the contract. The 2005 Declaration as amended did not give the Vendor title to the 6000 sq. ft. At least 1000 sq.ft was common property under the 2008/2010 Declaration. The vendor could not have title to that property unless and until the Declaration was further amended which had not happened at the time of the termination or even at the time of the trial.

Armbrister v Lightbourn [2012] UKPC 40 applied

Scarfe v Adams [1981] 1 All E.R. 843 considered

Pedriks v Grimaux [2021] EWHC 3448 (QB) considered

Willson v Greene [1971] 1 W.L.R. 635 considered

Mr. Justice Jon Isaacs, JA

Decision delivered by The Honourable

Introduction

1 By Notice of Motion filed on 5 April 2022, the appellant seeks to, inter alia, set aside the decision of Mr. Justice Loren Klein (“the Judge”) made on 24 February 2022, whereby he ruled that the appellant was not entitled to avoid or rescind an Agreement for Sale dated 19 July 2018, for Penthouse 901, One Ocean Condominium, Paradise Island (“the Unit”); nor was she entitled to the return of the deposit of $410,000.00. She also complains about the Judge's order that she pay 85% of the respondent's taxed costs.

2 The appellant asks the Court for an order:

• “1. That the said Ruling and Disposition be set aside: and

• 2. That it be declared that the Plaintiff is and was entitled to avoid and/or rescind the Contract for sale: and

• 3. That the Defendant be ordered to repay the Plaintiff the said deposit: and

• 4. That the Plaintiff be awarded her costs here and below.”

3 The grounds on which the appellant relies are as follows:

• “1. The Learned Judge erred in law and/or misdirected himself in concluding that, since the Unit was part of the relevant Condominium Declaration (lodged January 2010) at 4801 sq (with 2.06 unit entitlement) and that the Law of Property and Conveyancing (Condominium) (“the Act”) was practically a land registration system for...