Christopher Dowdy v Guanahani Management Company

• Jurisdiction: Bahamas
• Judge: Mr. Justice Neil Brathwaite
• Judgment Date: 29 August 2023
• Docket Number: 2020/CLE/gen/00357
• Court: Supreme Court (Bahamas)

BETWEEN:

Christopher Dowdy

Plaintiff

and

Guanahani Management Company

First Defendant

Guanahani Development Limited

Second Defendant

Guanahani Village Association Limited

Third Defendant

Blue Water Resort Limited

Fourth Defendant

Before

The Hon Mr. Justice Neil Brathwaite

2020/CLE/gen/00357

COMMONWEALTH OF THE BAHAMAS

IN THE SUPREME COURT

COMMON LAW AND EQUITY DIVISION

Appearances:

Leif Farquharson KC along with Jewelle Carroll for the Second and Third Defendants/Applicants

Nadia Wright for the First and Fourth Defendants/Applicants

Ashley Williams for the Plaintiff/Respondent

DECISION

MATERIAL FACTS

1 This matter involves an application for security for costs. The Plaintiff is the owner of what amounts to a time share at Unit No. 12, Week 38 in the Guanahani Village and Blue Water Resort. The First Defendant is a Company incorporated under the laws of the

Commonwealth of The Bahamas which is alleged to be a Management Association on behalf of all interval owners and is seized in fee simple in possession of the property described in a Declaration of Covenant dated October 7, 2009.

2 The First Defendant is also alleged to be a managing agent of the Second Defendant, which is also a company incorporated under the laws of the Commonwealth of The Bahamas, and which is alleged to be the original developer of Guanahani Village and Blue Water Resorts (‘The resort’). The Third Defendant is a company incorporated under the laws of the Commonwealth of The Bahamas and is alleged to be connected to the other Defendants by virtue of a development agreement dated July 16, 1980, between the Second and Third Defendants.

3 The Fourth Defendant is a company incorporated under the laws of the Commonwealth of The Bahamas and is alleged to have a nexus with all the other Defendants by virtue of two agreements dated January 31, 2006, between the Second and Fourth Defendant, and by a development agreement dated July 16, 1980.

4 Around October 5, 2016, the Resort sustained significant damage after the landfall of Hurricane Matthew in New Providence. Subsequently, the first Defendant hired a U.S. firm of engineers to examine and execute remediation of the Resort, and it was discovered that the Resort's building had structural defects reported to be due to the use of beach sand in the concrete used during construction. Around August 2017 a majority of the interval owners voted to rebuild the Resort, but this was later considered to be untenable as the insurance coverage was insufficient to cover the costs and the claim was denied by the insurer. The Plaintiff thereafter brought this action seeking damages for negligence and breach of fiduciary duty.

5 On April 1, 2021, Acting Justice Burnside dismissed the Plaintiff's application for injunctive relief, and awarded costs to the Defendants. Those costs have never been paid. The present application was brought by way of summons filed on 26 ^th March 2021 by the Second and Third Defendants for security for costs, pursuant to Order 23 of the Rules of The Supreme Court, supported by the Affidavit of Mr. Gabriel Brown filed on October 25, 2022; and by Summons filed on behalf of the First and Fourth Defendants on March 17, 2021, supported by the affidavit of Ms. Anna A. Moss, also filed March 17, 2021.

6 In opposition to the present application, the Plaintiff filed the Affidavit of Rayshelle Rose on October 27, 2022. This exhibited the unsworn and unfiled Affidavit of the Plaintiff, Mr. Christopher Dowdy, resident at 198 North Coleman Road, Centerreach, New York, U.S.A. The Plaintiff filed a sworn Affidavit, duly apostiled, on November 22, 2022.

7 The Plaintiff also filed a Statement of Claim on October 28, 2022. In response, the Second and Third Defendants filed a summons on November 11, 2022, supported by a second Affidavit of Mr. Gabriel Brown, seeking to have that Statement of Claim set aside pursuant to Order 2 Rules 1 and 2 of the Rules of the Supreme Court, on the basis that it was filed without leave more than one year after appearances were entered on behalf of the Defendants, and without giving requisite notice of intention to proceed. Similar relief was sought by the First and Fourth Defendants by Summons filed December 9 ^th 2022, supported by the affidavit of Eugenia Butler. Alternatively, the Defendants sought an extension of time for the service of their respective defences, and costs.

PLAINTIFF/ RESPONDENT CASE

8 The Plaintiff contends that the Defendant's application for security for costs should be refused for the following reasons:

• a) the admission of the First and Fourth Defendants contained in the Affidavit of Paul Knowles acknowledges and admits the culpability of the First and Fourth Defendants directly contributing to the loss of the Plaintiff;

• b) That the Plaintiff by virtue of his ownership deed in the timeshare has an asset within the jurisdiction;

• c) c) In all the circumstances the interest of justice lies in not granting security for costs against the Plaintiff pursuant to Order 23 Rule 1 of the Rules of the Supreme Court.

9 The Plaintiff contends, relying on the principles laid out in Sir Lindsay Parkinson & Co Ltd v Triplan Ltd (1973) Q.B. 609 at 626-627, by Lord Denning M.R., that all of the considerations lie in favor of the Plaintiff, in that, the Plaintiff's claim is not a sham, the Plaintiff has a good chance of success, and the Defendants' actions to date which include filing another summons seeking to strike out the Plaintiff's claim demonstrates that the Defendants are attempting to stifle the Plaintiff's genuine claim. The plaintiff further argues that the court should consider all the circumstances, and rely on Responsible Development for Abaco (RDA) Ltd v ex parte the Queen and the Right Honourable Perry G. Christie, (Prime Minister of The Commonwealth of The Bahamas) (Minister of Finance and Minister Responsible for Crown Lands) et Al; SCCivApp No. 48 248 of 2017 at paragraph 40 where the court states “ whether to grant security for cost is entirely a matter of discretion, which of course must be exercised judicially having regard to previous decisions of the court. It is a balancing act.”

10 The Plaintiff acknowledges that it is not a company but adds that the principles are applicable in that:

• 1) the court must carry out a balancing exercise between the stifling of the Plaintiff's claim and the Defendants' inability to enforce a cost award in the event the Plaintiff is unsuccessful.

• 2) the foremost consideration in that balancing exercise is the Plaintiff's prospects of success; and

• 3) The court must be satisfied that the claim would be stifled, which can be inferred from the evidence, prior to refusing the grant of security.

DEFENDANT/ APPLICANT CASE

Counsel for the Second and Third Defendants

11 The Defendants argue that security for costs should be granted as the Plaintiff is ordinarily a resident outside of the jurisdiction. The Defendants rely on Order 23 Rule 1(1) of the Rules of the Supreme Court. The Defendants further submit that there are two main considerations in exercising the discretion to grant the application. Firstly, it appears that the Plaintiff is ordinarily a resident outside of the jurisdiction of The Bahamas; and secondly, that it is otherwise just in the circumstances of the case for security for costs to be ordered. Regarding the first consideration, the Defendants rely on R v Barnett London Borough Council, ex p Shah [1983] 2 AC 309, endorsed by the learned editors of The Supreme Court Practice 1999, Vol 1 at para 23/3/4.

12 The Defendants submit that the natural and ordinary meaning of the words “ordinarily resident” as put by Lord Scarman in the tax case Leven v Inland Revenue Comissioners [1928] AC 217 ”..refers to a man's abode in a particular place or country which he has adopted voluntarily and for settled purposes as part of the regular order of his life for the time being, whether of short or of long duration.” The Defendants submit that the fact of the Plaintiff's residence outside of the jurisdiction emerges in the Affidavit of the Plaintiff, Christopher Dowdy, along with his wife Jacqueline Dowdy filed on December 11, 2022, in support of an application for interim injunctive relief. The Defendants submit that the Plaintiff and his wife confirmed that they are citizens of the United States of America, resident at 198 North Coleman Road, Centerreach, New York. The Defendants further submits that the same address is repeated in the recent Affidavit of the Plaintiff filed November 22 ^nd 2022.

13 The Defendants argue that the second requirement is whether it is otherwise just in the circumstances for security for costs to be given. The Defendants accept that the court has the discretion to grant security for costs, but submit that residence abroad prima facie obliges the Plaintiff to give such security, relying on the decision of Lloyd v Roycan International Banking Ltd [1990] BHS J. No. 114 in which the Plaintiff asserted that he held real estate within The Bahamas. The learned Madam Justice Sawyer said:

“22. While it is true that the onus of proving that the Plaintiff is not ordinarily resident within the jurisdiction rests on the Defendant/applicant under the Order, on the facts so far presented in the affidavits, I am satisfied that the Plaintiff is not ordinarily resident in The Bahamas for the purpose of Order 23.

23. Because a plaintiff is not ordinarily resident within the jurisdiction does not mean that the court must automatically order him to give security for costs.

24. In Ebrard v Gassier (1885) 28 CH. D. 232, Bowen, L. J. said:- “The Plaintiffs being abroad were prima face bound to give security for costs and if they desired to escape from doing so they were bound to show that they had substantial property in this country, not of a floating, but a fixed and permanent nature, which would be available in the...