Grafton Court Condominium Association Company Ltd v Caroline Sayers
| Jurisdiction | Bahamas |
| Judge | Madam Senior Justice Deborah Fraser |
| Judgment Date | 26 January 2024 |
| Docket Number | 2019/CLE/gen/01728 |
| Court | Supreme Court (Bahamas) |
IN THE MATTER of the Law of Property and Conveyancing (Condominium) Act, Chapter 139
and
and
Her Ladyship The Honourable Madam Senior Justice Deborah Fraser
2019/CLE/gen/01728
IN THE SUPREME COURT
COMMON LAW AND EQUITY DIVISION
Application for a Preliminary issue to be tried before trial — Rules 26.1 (2) (e) and (i) of the Supreme Court, Civil Procedure Rules, 2022 — Overriding Objection — Rule 1.1 of the Supreme Court Civil Procedure Rules — Section 17(2) of the Law of Property and Conveyancing (Condominium) Act, 1967 — Production of annual accounts duly audited by a duly qualified auditor
Mrs. Tanya Wright and Mrs. Alecia Bowe for the Claimant
Ms. Ruby E. Gray for the First Defendant
No Appearance for the Second and Third Defendants (did not participate in the application)
This is an application brought by the First Defendant, Caroline Sayers, for a preliminary issue to be heard before the trial of this action.
The Claimant, Grafton Court Condominium Association Company Limited (“ GCCA”) is a statutory management corporation established under the provisions of the Law of Property and Conveyancing (Condominium) Act, 1967 (“ Act”) to manage the Grafton Court Condominium situate on Lot 21 Bell Channel Bay subdivision, Freeport Grand Bahama (“ Condominium”) with power pursuant to the said Act and the Declaration of Condominium dated 04 October 1991 and recorded in Volume 6039 at pages 546 to 574 (“ Declaration”), and the Confirmatory Declaration of Condominium dated 05 February 2004 and recorded in Volume 8965 at pages 252 to 266 (“ Confirmatory Declaration”) to enforce for the benefit of all the unit owners of the Condominium and the restrictions and conditions set out in the Second Schedule of the Confirmatory Declaration.
The First Defendant, Caroline Sayers (“ Ms. Sayers”), is the owner of Unit A4 in the Condominium by virtue of an Indenture of Conveyance dated 12 February 2004 made between Migrafill Investments Limited (“ MIL”) of the one part and Caroline Sayers of the other part and recorded in the Registry of Records in the city of Nassau in Volume 9118 at pages 527 to 538.
The Second and Third Defendants, Gretchen Paruch and Thaddeus Paruch are the owners of Unit A3 of the Condominium.
MIL, the developer of the Condominium, is the owner of units A1, A2, A5 and A6 in the Condominium.
There is no set maintenance fee outlined in the Declaration or the Confirmatory Declaration.
Prior to the Annual General Meeting (“ AGM”) on 02 March 2019, it is alleged that all Parties agreed that the total common expenses would be proportioned 1/6, 1/6, 4/6 between the unit owners based on Unit entitlement.
In or about 2006, it is alleged that the unit owners agreed to purchase and/or build a pool, dock and generator. The costs of such construction was allegedly to be shared amongst the unit owners of the Condominium.
In or about 2007, a dispute over outstanding condominium expenses and fees arose among the unit owners and Mr. Grafton Ifill, the majority shareholder of MIL. And President of the GCCA.
The dispute resulted in GCCA filing an action against the Defendants in court action 2007/CLE/gen/00173. The action was dismissed by the late Justice Stephen G. Isaacs who adjudged, inter alia, that the GCCA was not entitled to costs associated with capital development of the Condominium and that there ought to have been a set maintenance fee. It was further found, inter alia, that the Defendants were responsible for 2/6 of the total contribution from February 2004 to the date of judgment and continuing (“ 2007 Judgment”).
GCCA filed a Notice of Appeal of the 2007 Judgment, however, by Deed of Settlement and Compromise dated 19 July 2012 and its addendum (“ Deed”), the Parties agreed to withdraw the appeal and abide by the terms in Deed.
GCCA alleges that, pursuant to the Deed, the Parties agreed not to set a fixed maintenance fee but to deal with maintenance on an item by item basis, with receipts and/or invoices being provided. Also, GCCA purportedly removed all costs deemed “capital development cost” from the invoice previously demanded from the Defendants.
Despite the executed Deed, the dispute remained extant amongst the Parties as the Defendants allegedly refused and/or failed to pay their share of the common expenses. GCCA allegedly continued to maintain the common expenses without the assistance of the Defendants but kept receipts and/or invoices of all expenditure.
GCCA claims that it continued to provide the breakdown of all expenditure to the Defendants. However, the Defendants purportedly refused to make their contributions to the maintenance of the Condominium.
At the 02 March 2019 AGM, it is alleged that all Parties agreed to allow Barefoot Marketing to manage the Condominium moving forward and agreed to appoint an accountant to audit the accounts to determine the issue of what is owed by the Parties from February 2004 to March 2019.
On or about 30 March 2019, the Condominium's accounts were allegedly reviewed again by chartered accountant Sandy Morley and a report was produced to outline the amount owing by the Defendants.
On or about 15 November 2019, a notice in writing levying outstanding contributions of the common expenses were allegedly sent to the Defendants' respective addresses.
On 05 December 2019, GCCA filed a Writ of Summons against all of the Defendants for alleged breaches of the Act, the Declaration, the Confirmatory Declaration and the Deed for purported failure to pay fees owing for maintenance and common expenses of the Condominium. GCCA seeks the sum of $188,279.96 from Ms. Sayers, the sum of $246,957.24 from the Second and Third Defendants, a charge over units A3 and A4, interest, costs and such other relief the Court deems just.
On 16 September 2020, a Defence and Counterclaim were filed on behalf of all the Defendants (who, at the time were all represented by the same counsel) denying the allegations made by the GCCA in its Writ of Summons and, through counterclaim, claim that GCCA breached its statutory duty by failing to adhere to the Act. They claim damages and exemplary damages for alleged loss suffered due to, inter alia, GCCA purportedly failing to maintain the Condominium and adhere to the terms of the Deed.
On 07 April 2022, Ms. Sayers brought this application requesting a preliminary issue to be tried prior to the trial. Specifically, she requests that the following preliminary issue be tried and, if such issue was to be tried, would be dispositive of the substantive trial:
“ 1) Whether or not the Plaintiff has a mandatory duty to produce annual accounts duly audited by a duly qualified auditor to all unit owners at least once a year under Section 17(2) of the Law of Property and Conveyancing (Condominium) Act (“the Act”)
2) If the Court finds that Section 17(2) is a mandatory duty under the Act an Order from this Court that such annual accounts duly audited in accordance with the Act be provided to all unit owners including the First Defendant.”
The Court must determine whether there ought to be a hearing of the preliminary issue before the trial of the substantive action?
The evidence provided by GCCA and Ms. Sayers is quite extensive. I will, however, attempt to summarize as succinctly as possible the most relevant evidence for the purposes of this application.
On 16 January 2023, Ms. Sayer's filed an Affidavit (“ First Sayer Affidavit”) which provides that: (i) GCCA has withheld all invoices and accounting information pertaining to her unit and failed to keep detailed and accurate records of receipts and expenditures arising from the management and operation of the Condominium; (ii) around 2005, Ms. Sayer paid on account $400.00 per month as maintenance fees for her unit and continued to pay this amount until January 2012; (iii) due to GCCA's failure to set a maintenance fee and keep accurate and detailed accounting records, the dispute between GCCA and Ms. Sayers persisted; (iv) MIL, a majority owner in the Condominium, along with GCCA continue to retain sole possession and control of the accounts, records, invoices, and data related to the Condominium and the Unit expenses, expenditures and fees; (v) in 2004, in the absence of the Defendants, GCCA appointed MIL's office manager/employee, Ms. Sarah Rolle as manager of the Condominium. Since her engagement, she has routinely failed to keep Ms. Sayers and the other Defendants informed of GCCA's expenses; and (vi) on 14 April 2006, Ms. Sayers wrote to GCCA advising it of her desire to pay maintenance fees and the impossibility of doing the same as GCCA failed to provide any Condominium Bank Account details.
The First Sayers Affidavit further states that: (i) GCCA's inability to set maintenance fees resulted in its inability to perform its duties under the Condominium provisions being: (a) maintaining an insurance policy and payment of insurance premiums; (b) establishing reserves for capital improvements and maintenance of the common property and the discharge of any other obligations to GCCA; (c) determining from time to time amounts of money to be raised for the operation, maintenance and administration of the Condominium; (d) recovering from any unit owner in the Condominium any sum of money expended by itself for repairs or work done by it; (e) having accurate and legitimate annual accounts duly audited by a qualified auditor and render the same to all unit owners at least once in every year; and (f) holding...
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