Besing Shores Ltd v Little Bay Partners LLC
|Charles Snr. J
|05 October 2022
|Supreme Court (Bahamas)
The Honourable Madam Senior Justice Indra H. Charles
IN THE SUPREME COURT
Common Law & Equity Division
Effect and Meaning of the use of the words “more or less” in Agreement for Sale — Contract — Rescission — Misrepresentation — Notice to Complete — Deficiency — Discrepancy between the size of the property as represented in the Agreement for Sale and the actual size of the property — Damages — Costs
Expert evidence — Partiality and independence of expert witness — Expert's wife's firm engaged by Plaintiff — Admissibility of evidence — Weight to be attached
The Plaintiff (as Purchaser) and Defendant (as Vendor) entered an Agreement for Sale (“the Agreement”) dated 2 May 2019 for the sale of the Property in Harbour Island for a purchase price of US$4.8 million.
While the Agreement provided that the Property being sold was 2.355 acres, the northern, southern and western boundaries of the Property were described in the Agreement with the terminology “more or less.” The Purchaser had a survey of the Property carried out after the Agreement was signed, which disclosed that the size of the Property was 6,272.64 square feet less than 2.355 acres. A later survey reflected that the size of the Property was 6,359.76 square feet. This evidence was not challenged. The Defendant served the Plaintiff with a Notice to Complete dated 12 September 2019 which provided that, if the Plaintiff failed to complete the transaction within (21) days, the deposit in the amount of US$480,000 (“the Deposit”) would be forfeited to the Defendant. The Defendant contended that the discrepancy between the size of the Property as reflected in the Thompson Survey and the size of the Property in the Agreement fell within the scope of the words “more or less” and, therefore the Notice to Complete was valid. The Defendant contended that it was thus entitled to forfeit the Deposit if the Plaintiff failed to complete the transaction. The Plaintiff maintained that the discrepancy in the size of the Property was not covered by the words “ more or less” and that it was entitled to rescind the Agreement and request the return of the deposit.
In determining whether the Plaintiff or Defendant is entitled to the Deposit, the first issue to be determined by this Court is what is the effect and meaning of the use of the term “more or less” in the Agreement for Sale and does the size discrepancy between the size of the Property as reflected in the Thompson Survey and the size of the Property as reflected in the Agreement for Sale fall within the scope of the term “more or less”.
HELD: Finding that the deficiency of 6,359.76 square feet in the quantum of the Property was too substantial to be encompassed in the words “ more or less”, the Plaintiff is entitled to avoid the transaction and receive its deposit back together with damages associated with the transaction to be assessed by the Registrar upon production of invoices within 21 days hereof and costs to be taxed if not agreed.
1. The general principles on the independence and unbiased opinion of an expert are conveniently set out by Nelson J in at para. 29. The fact that the expert's wife's firm was engaged by the Plaintiff from the outset when it decided to purchase the Property does not mean that the expert cannot be independent and objective. The fact of his connection with the Plaintiff might affect what weight, if any, the Court, as the arbiter, attached to his evidence and opinions: at paras 92–94 relied upon.
2. On a balance of probabilities, the evidence of the Plaintiff and its expert witnesses are preferred to that of the Defendant and its expert witnesses. The evidence of the Plaintiff's expert witness, the surveyor, is unchallenged that the Property as described in the Agreement consisted of 2.355 acres (or 102,583.80 square feet) of land. On his Second Survey on 20 May 2019, the total area of the Property was found to be 2.209 acres (96,224.04 square feet); a difference of 6,359.76 square feet. The deficiency in the quantum of the Property is too substantial to be encompassed by the words “ more or less”: ; ; applied. distinguished.
3. Given that the shortfall of 6,359.76 square feet was too substantial to be encompassed by the words “ more or less”, the Plaintiff was entitled to rescind the Agreement for Sale and get back its deposit of US$480,000. The Plaintiff cannot be required to complete the transaction since the Defendant misrepresented the acreage of the land it purported to sell to the Plaintiff. The Plaintiff is entitled to the costs including architectural and design fees, surveyor costs, shipping calls and transaction legal fees.
Mrs. Gail Lockhart-Charles KC and Ms. Candice Ferguson of Gail Lockhart-Charles for the Plaintiff
Mr. Brian Simms KC and Mr. Valdere Murphy of Lennox Paton for the Defendant
The Plaintiff (“Besing Shores”) contracted to purchase the property known as “Beacon Hill” in Harbour Island (‘the Property”) comprising 2.355 acres of land “ more or less” for US$4.8 million. Besing Shores paid a deposit of US$480,000 to the vendor (“Little Bay”). Subsequent to the payment of the deposit and, as part of its due diligence investigations before the contemplated sale, Besing Shores discovered that there was a discrepancy of 6,359.76 square feet between the size of the Property as represented in the Agreement for Sale (“the Agreement”) and the actual size that the Property when it was surveyed by its surveyor. Besing Shores refused to complete the sale contending that the discrepancy in the size of the Property was not covered by the words “more or less” in the Agreement. Little Bay had not challenged the survey findings but maintains that the discrepancy does not amount to a breach of contract because the inclusion of the words “more or less” in the description of the Property fell within the scope of the Agreement.
The pivotal issue before the Court is whether the discrepancy between the size of the Property as reflected in the survey carried out by Besing Shores' surveyor, Mr. Donald Thompson and the size of the Property in the Agreement fell within the scope of the words “more or less” and therefore the Notice to Complete was valid. Little Bay contends that it was entitled to forfeit the Deposit since Besing Shores failed to complete the transaction.
By Writ of Summons indorsed with Statement of Claim filed on 17 September 2019, Besing Shores seeks the following relief against Little Bay namely:
(1) Rescission of the Agreement for Sale dated 2 May 2019;
(2) Repayment of the sum of US$480,000;
(3) A declaration that the Notice to Complete served on behalf of Little Bay is null and void and/or of no effect on the ground the Agreement for Sale has been rescinded;
(4) An order setting aside the Notice to Complete and/or declaring it ineffective;
(5) Damages for misrepresentation;
(6) Interest pursuant to Civil Procedure (Awards of Interest) Act and,
In its Defence and Counterclaim filed on 26 June 2020, Little Bay denies that Besing Shores is entitled to any of the relief sought in the Writ of Summons and counterclaimed, in the main, for the following:
(1) A declaration that Little Bay has shown a good root of title in relation to the Property subject to the Agreement between Little Bay and Besing Shores;
(2) An Order that Besing Shores has breached the terms of the Agreement;
(3) A Declaration that the Notice to Complete dated 12 September 2019 which was issued by Little Bay to Besing Shores in accordance with Clause 11 of the Agreement is valid;
(4) An Order that the deposit of USD$480,000 held by Messrs. King & Co as stakeholders shall be forfeited to Little Bay and;
(5) An Order setting aside Besing Shores' purported rescission of the Agreement and/or a Declaration that Besing Shores' notice to rescind is invalid.
On 2 May 2019, Little Bay as Vendor entered into the Agreement with Besing Shores as Purchaser relative to the sale of Property. Item 10 of the Schedule to the Agreement describes the Property as:
“ALL THAT piece parcel or lot of land comprising Two and Three Hundred and Fifty-five Thousandths (2.355) Acres being Parcel Number One (1) on the Plan of the Subdivision by Bahamas Calypso Music Limited of a portion of Lot Number Seventeen (17) and a portion of Lot Number Eighteen (18) in a Plan of Harbour Island one of the Islands of the Commonwealth of The Bahamas and bounded NORTHWARDLY by Parcel Number Four (4) of the said Subdivision and running thereon Three Hundred and Forty-four and Sixty-nine Hundredths (344.69) feet more or less to the Harbour at High Water Mark EASTWARDLY by a Twenty (20) foot wide right of way now formerly the property of Bahamas Calypso Music Limited and running thereon Two Hundred and Fifty-seven and Eighty Hundredths (257.80) feet SOUTHWARDLY partly by the Eastern and the Western portion of Parcel number One A (1A) of the said Subdivision now the property of the Vendor and now or formerly the property of the said Bahamas Calypso Music Limited respectively and partly by a road reservation and running thereon jointly from the said Twenty (20) foot wide right of way to the Harbour at High Water Mark Three Hundred and Seventy-one and Fifty-one Hundredths (371.51) feet more or less and WESTARDLY by the Harbour and running thereon Two Hundred and Seventy-four and Fifty-one Hundredths (274.51) feet more or...
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