George Damianos D/B/A Damianos Sotheby's International Realty v Bank of the Bahamas Ltd

JurisdictionBahamas
JudgeCharles Snr. J
Judgment Date26 October 2021
Docket Number2018/CLE/gen/01129
CourtSupreme Court (Bahamas)
Between
George Damianos D/B/A Damianos Sotheby's International Realty
Plaintiff
and
Bank of the Bahamas Limited
First Defendant

and

Windermere Island North Development Ltd
Second Defendant

and

Joseph Carry Rich
Third Defendant

and

CH Windermere Lending LLC
Fourth Defendant
Before:

The Honourable Madam Senior Justice Indra H. Charles

2018/CLE/gen/01129

IN THE SUPREME COURT

Common Law and Equity Division

Exclusive Listing Agreement — Commission payable on Sale of the Property — Loan Sale Agreement — Transfer of Debenture and Mortgage — Meaning of ‘Sale of land’ — Conveyancing and Law of Property Act — Procuring breach of contract — Conspiracy — Pleadings — Allegations of conspiracy to injure — Must be specifically pleaded, particularised and proven — Tortious Interference — Contractual Interpretation

On 6 June 2016, the Plaintiff, a licensed real estate broker in The Bahamas entered into an Exclusive Listing Agreement (“the Listing Agreement”) with the First Defendant, in its capacity as mortgagee for the sale of property situate on Windermere Island, Eleuthera (“the Property”) due to the default of the Second Defendant, as mortgagor of the Property and Third Defendant, as guarantor of all present and future debts which were due to the First Defendant from the Second Defendant under various security documents. The Property was listed for a sale price of US$15.5M. In the event that the Property was sold, the Plaintiff was to receive, among other things, six percent of the sale price as commission.

At all material times, the Second Defendant was a real estate developer, the principal of which is the Third Defendant.

In June 2016, the Plaintiff took steps to market the Property and there were several inquiries from third parties and at least one subsequently made offers to purchase the Property, which were rejected by the First Defendant.

On or about 20 March 2017, the Second Defendant, and CrossHarbor Capital Partners LLC (“CrossHarbor”) informed the First Defendant that the Second Defendant was desirous of satisfying the debt owed to the First Defendant and that the Fourth Defendant (a special purpose vehicle incorporated by CrossHarbor) would be the source of the funds used to refinance the debt.

On 12 October 2017, an employee of the First Defendant informed the Plaintiff that the Second Defendant was repaying the First Defendant in full.

On 22 September 2017, a Mortgage Loan Sale Agreement (“Loan Sale Agreement”) was entered into between the First Defendant and the Fourth Defendant in the amount of US$7.2M.

On 6 March 2018, pursuant to the Loan Sale Agreement, a Transfer of Debenture and First Legal Mortgage and Supplemental Debenture and assignment of Guarantee were entered into between the First and Fourth Defendant relative to the Property.

The Plaintiff sued the Defendants alleging that the transaction between the First and Fourth Defendants constituted a sale of the Property for the purpose of the Listing Agreement and demanded the payment of a commission pursuant to the Listing Agreement. The First Defendant asserted that the Loan Sale Agreement and subsequent Transfer of Debenture and Mortgage did not constitute a sale of the Property for the purpose of the Agreement.

The Plaintiff also alleged that the Second, Third and Fourth Defendants jointly conspired to tortiously interfere with the Listing Agreement between the Plaintiff and First Defendant. This was denied by the Defendants.

In determining whether the Plaintiff is entitled to the claimed commission, the first issue to be determined by the Court is whether the aforementioned Transfer of Debenture and Mortgage legally constituted a ‘sale of the Property’ for the purposes of the Listing Agreement. If such claim fails, all claims against the Defendants must fail.

HELD: dismissing the Plaintiff's claim against all the Defendants with costs to the Defendants to be taxed if not agreed

  • [1] In interpreting a contract, words are to be given their plain and ordinary meaning. The Court, in its interpretative exercise must identify what the parties meant, “…through the eyes of a reasonable reader, and save perhaps in a very unusual case, that meaning is most obviously to be gleaned from the language of the provision:” Arnold v Britton [2015] UKSC 36 at para.17. See also: Lord Hoffmann in Investors Compensation Scheme Limited v West Bromwich Building Society [1998] 1 WLR 896 and Avery-Gee and others v Sibley and others [2021] EWHC 798 (C).

  • [2] The Transaction did not constitute a sale of the Property and consequently it does not fall within the Listing Agreement. The Plaintiff is therefore not entitled to be paid any commission. There was no breach of contract by the First Defendant.

  • [3] Pleadings are still required to mark out the parameters of the case that is being advanced by each party. In particular they are still critical to identify the issues and the extent of the dispute between the parties. What is important is that the pleadings should make clear the general nature of the case of the pleader: Bahamas Ferries Limited v Charlene Rahming SCCivApp & CAIS No. 122 of 2018.

  • [4] Allegations of conspiracy to injure by unlawful means must be specifically pleaded, particularized and clearly proved by convincing evidence. The more serious the allegation, the more important it is for the case to be set out clearly and with adequate particularity. To plead it requires at least alleging each of the essential ingredients of the tort. Nothing less will suffice. In the present case, that was not done: Rollingson v Hollingsworth and others [202[] EWHC 3568 (QB) at paras [58] and [60] relied upon. See also Bullen and Leake and Jacob's Precedents of Pleadings, 12 th Edn. (1975) at pp 340–34 and White Book (1999) at 18/12/10.

Appearances:

Mrs. Sophia T. Rolle-Kapousouzoglou with Mr. Valdere J. Murphy of Lennox Paton for the Plaintiff

Mr. Luther McDonald and Mr. E. Terry North of Alexiou, Knowles & Co. for the First Defendant

Mr. Sean Moree with Mrs. Erin M. Hill of McKinney Bancroft & Hughes for the Second and Third Defendants

Mrs. Giahna Soles-Hunt of Glinton Sweeting O'Brien for the Fourth Defendant

Charles Snr. J
Introduction
5

On 6 June 2012, the First Defendant (“the Bank”) entered into a Multiple Listing Service Agreement (“the Listing Agreement”) with the Plaintiff (“Mr. Damianos”) to list, market and sell a high end residential resort community on the Island of Windermere, Eleuthera (“the Property”) for the listed price of USD$15,500,000.00. The Listing Agreement provided, among other things, that: (i) Mr. Damianos would have the sole and exclusive right, power and authority to act as the Bank's agent for the listing, marketing and sale of the Property; and (ii) the Bank would pay to Mr. Damianos a commission of 6% of the sale price plus VAT if a sale of the Property was completed.

6

During the currency of the Listing Agreement, the Bank entered into an agreement with the Second Defendant (“WIND”) for the repayment of the loan by funding from another financial institution.

7

Sometime after May 2017, Mr. Damianos discovered that the Bank had conveyed the Property to the Fourth Defendant (“CH Windermere”) and had sold, assigned and transferred (i) the debt due by WIND under the loan; (ii) the Debentures, Mortgage, Further Charge, Promissory Note and Guarantee (“the Security Documents”) and (iii) all powers rights and remedies contained in these documents to CH Windermere.

8

Mr. Damianos has taken the position that the transaction between the Bank and CH Windermere (“the Transaction”) constituted a “sale” of the Property and he is therefore entitled to his commission. As such, he sued the Bank claiming commission of 6% or BSD$432,000.00 under the Listing Agreement. He also accuses WIND, the Third Defendant, Mr. Rich and CH Windermere of a common intention to conspire to cause him loss through the Bank's breach of the Listing Agreement and seeks damages against them for tortious interference.

Dramatis personae
9

Mr. Damianos is the President of Damianos Sotheby's International Realty and a licensed broker under the Real Estate (Brokers and Salesman) Act, 1996. Damianos Sotheby's International Realty is a real estate company which specializes in private islands, luxury homes and waterfront properties and is an affiliate of Sotheby's International Realty.

10

The Bank, is a Bahamian bank. It is incorporated under the laws of the Commonwealth of The Bahamas and, at all material times, was licensed to carry on banking services under the Bank and Trust Regulation Act, 2000.

11

WIND is a company incorporated under the laws of the Commonwealth of The Bahamas engaged (or formerly engaged) in the proposed development of a high end residential resort community on the Island of Windermere, Eleuthera (“the Property”).

12

Mr. Rich, is the sole beneficial shareholder of WIND.

13

CH Windermere is a Delaware limited liability and special purpose vehicle (“SPV”) incorporated for the purpose of taking title to the rights, title and interest in a loan secured by a debenture and mortgage provided by the Bank to Mr. Rich relative to the Property. CH Windermere is also an affiliate of CrossHarbor Capital Partners of Boston, Massachusetts (“CrossHarbor”).

Background facts
14

These facts are agreed by the parties in their Agreed Statement of Facts and Issues filed on 6 April 2021.

15

On or about 2003, the Bank advanced a loan (“the Loan”) to the developer, WIND. At that time, the Loan was secured by a Debenture and First Demand Legal Mortgage from WIND to the Bank over the Property. Subsequently, in 2005, the Loan was increased and further secured by a Supplemental Debenture and Further Charge of the Property from WIND to the Bank.

16

WIND defaulted in relation to the Loan and the Bank agreed to forbear its collection of the sums due under the Loan in consideration of (1) a Promissory Note (the...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT