Old Fort Bay Property Owners Association Ltd v Old Fort Bay Company Ltd; Matthew Chance Hudson Zsuzsanna Marta Foti v Old Fort Bay Company Ltd New Providence Development Company Ltd; Old Fort Bay Company Ltd v Old Fort Bay Property Owners Association Ltd

JurisdictionBahamas
CourtSupreme Court (Bahamas)
JudgeCharles J
Docket Number2014/CLE/gen/773 consolidated with 2017/CLE/gen/00014

IN THE SUPREME COURT

Before:

The Honourable Madam Justice Indra H. Charles

2014/CLE/gen/773 consolidated with

2014/CLE/gen/0889

2017/CLE/gen/00014

Between
Old Fort Bay Property Owners Association Limited
Plaintiff
and
Old Fort Bay Company Limited
Defendant
Between
Matthew Chance Hudson Zsuzsanna Marta Foti
Plaintiffs
and
Old Fort Bay Company Limited New Providence Development Company Limited
Defendants
Between
Old Fort Bay Company Limited
Plaintiff
and
Old Fort Bay Property Owners Association Limited
Defendant
Appearances:

In Action 2014/CLE/gen/773

Mrs. Krystal Rolle and Mrs. Vanessa Carlino for the Plaintiff

Mrs. Gail Lockhart-Charles and Mrs. Lisa Esfakis for the Defendant

In Action 2014/CLE/gen/0889

Mrs. Krystal Rolle for the Plaintiffs

Mrs. Gail Lockhart-Charles and Mrs. Lisa Esfakis for the Defendants

In Action 2017/CLE/gen/00014

Mrs. Gail Lockhart-Charles and Mrs. Lisa Esfakis for the Plaintiff

Mrs. Krystal Rolle and Mrs. Vanessa Carlino for the Defendant

Land — What lands constitute “common areas” within the Old Fort Bay Subdivision — Whether the Defendant holds “common areas” on trust for the Plaintiffs — Constructive trust — Fiduciary duties — Whether Plaintiffs' actions are barred by the doctrines of laches, limitation and acquiescence/estoppel -Whether Marina Expansion compromises security, exclusivity and vista of the POA and two-named Plaintiffs

The Plaintiffs are the Property Owners' Association (“POA”) and two property owners of Old Fort Bay. They commenced this consolidated action against the Developer seeking a declaration and relief that certain areas in the Subdivision are “common areas” and that the Developer ought not be permitted to construct the expansion of the marina, on the basis that the proposed expansion compromises the security, exclusivity and vista of the POA and particularly interfere with the rights granted to the two named Plaintiffs. Alternatively, the Plaintiffs contend that the Developer holds the common areas on trust as for the POA. As a result of the ownership or beneficial ownership under trust, the Plaintiffs take issue with several things done by the Developer with respect to the areas they claim as common areas, namely: (i) the sale of Pineapple House and Pineapple Grove, (ii) the Marina Expansion in that it affects the Canals, Waterways and Boat Basin which belong to the POA, (iii) leasing the Old Fort Bay Club to a third party and (iv) the sale of the Identified Beach Reserve to a third party.

The Developer asserted that the areas contended as common areas are not and that as it owns all of the property, it remains its property unless and until it is conveyed. The Developer opposes the POA's claim with respect to the marina expansion and asserted that the proposed expansion will not have the effects complained of by the POA and the named Plaintiffs. It also asserted that no trust arises and that the Plaintiffs' claims are barred by the Statute of Limitation, the doctrine of laches and/or acquiescence/estoppel.

HELD: Finding that the Old Fort Bay Club, Pineapple House, Pineapple Grove and the Marina are not “common areas” and they belong to the Developer. Finding also that the Canals, Waterways, Boat Basin and a portion of the Identified Beach Reserve are “common areas” and therefore, the Developer holds it on trust for the Property Owners Association and two named Plaintiffs. The issue with respect to the expansion of the existing Marina is adjourned pending (i) an Environmental Assessment Report, (ii) written opinions from all affected existing property owners and (iii) a site visit to the nearby marinas at Lyford Cay Club and Albany.

1. Everything within the mauve line on the Mauve Line Plan is “Old Fort Bay”. The land within the mauve line has also been referred to as the “Old Fort Bay Subdivision”. It follows that “Old Fort Bay” and “Old Fort Bay Subdivision” are synonymous and have been used interchangeably.

2. The POA's assertion that all lands within the mauve line of the Old Fort Bay Subdivision which are not developed as lots for sale are common areas and should be transferred is implausible. All of the land within Old Fort Bay belongs to the Developer (having been acquired by NPDC and then conveyed to OFBC in 1970) unless and until a conveyance is entered into and transfer of title takes place, the Developer has the right to sell, develop or retain the land. That right of the Developer is expressly provided for in clause 7 of the conveyance.

3. Pineapple House and Pineapple Grove are not common areas. There is nothing in the conveyance (or otherwise) which requires Pineapple House or Pineapple Grove (which were sold to third parties in 2005 and 2008 respectively, and developed as offices shortly after the sales) to be treated as common areas. To the contrary, clause 7 of the conveyance permits the Developer to act precisely as it has, in respect of these areas of retained land, expressly preserving its right to “deal with” the land as it saw fit. These properties were all land in the ownership of the Developer (until it sold them to third parties), which it was free to do.

4. The Old Fort Bay Club and the Marina are not common areas. They are not defined in any conveyances as “common areas”. Even the POA acknowledged this fact as long ago as 30 June 2008. In any event, any claim to ownership of the Old Fort Bay Club and the Marina is barred by the doctrines of (i) Laches; (ii) Limitation and (iii) Acquiescence/estoppel.

5. The common areas are identified as the Canals, Waterways, Boat Basin and a portion of the Identified Beach Reserve. There are no conveyances which provide for universal Beach Access. There were correspondence between the POA and the Minister on this issue. These discussions should continue as the Minister has the capacity to deal with this ongoing issue. The area by the security gate is common area.

6. The Developer holds the common areas on trust for the POA. The constitutional documents of the POA have the cumulative effect of putting the Developer on notice that it holds the legal estate in the common areas for the POA. Further, in each of the original conveyances, the POA signed on its own behalf as distinct from and in addition to the Developer so that the purchasers could receive the rights to common areas intended to be conveyed by the POA as the “real owner” of the common areas. Therefore, even prior to the actual conveyance of the legal estate of the common areas to the POA, everybody, that being the POA, the purchasers and the Developer fully recognized and accepted that the POA had a beneficial interest in the common areas.

7. Although the claim in respect of Pineapple Grove is not statute-barred since the 6 year time period for claims brought for trust property has not lapsed, in any event, the POA is barred by the doctrine of laches in respect of the Club, the Marina, Pineapple House and Pineapple Grove in bringing the claim. There has been very substantial delay by the POA. In respect of Pineapple House and Pineapple Grove, the POA acquiesced to the sale while in full possession of the facts. The Developer has acted to its detriment in light of the relevant history, in a manner that would make it wholly unconscionable to allow the POA to resurrect so stale a complaint about Pineapple House and Pineapple Grove.

8. “Beach Reserve” falls squarely within the definition of “common area” in the conveyances. The POA received no financial benefit and all such financial benefit was retained by the Developer. In this regard, the Developer breached its fiduciary duty owed to the POA when it transferred a portion of the Identified Beach Reserve to a third party. The POA ought to be compensated.

9. In order to definitively determine whether the Marina Expansion would negatively impact the residents of this upscale gated community, all contiguous property owners should be consulted and be given an opportunity to express their opinion(s) in writing and a comprehensive Environmental Assessment Report, done by a qualified expert, be submitted to the Court. A visit to the nearby marinas at Lyford Cay Club and Albany, if feasible, may assist the Court in deciding this issue.

Charles J
Introduction
1

Old Fort Bay is an upscale gated residential community, club and former colonial fort and home to many affluent people. The Old Fort Bay Club (“the Club”), the site of a fort that was built by the British during the 18 th century to fend off pirates, privateers and buccaneers, is also part of this bitter impasse as to its ownership between the Old Fort Bay Property Owners Association Limited (“POA”) and Old Fort Bay Company Limited (“OFBC”) and New Providence Development Company Limited (“NPDC”) (together “the Developer”).

2

These parties together with two property owners, Matthew Chance Hudson (“Mr. Hudson”) and Zsuzsanna Marta Foti (“Ms. Foti”) have filed separate actions which have been consolidated to determine the key issue in this case, namely: what lands constitute “common area” in the Old Fort Bay Subdivision (“the OFB Subdivision”). For convenience, I shall refer to Mr. Hudson and Ms. Foti as the POA, save where it is necessary to distinguish them.

3

OFBC has also commenced an action, by Amended Originating Summons, No. 2017/CLE/gen/00014 against the POA seeking certain declarations relating, principally, to Lot three (3) of Charlotte Island and a declaration that the POA is not entitled to claim any rentcharge payments in relation to properties within Old Fort Bay which have not been previously sold or conveyed subject to a reservation of a rentcharge to issue thereout.

Summary of each party's case
POA's case
4

Firstly, the POA asserts that certain areas are common areas which belong to the POA and should therefore be conveyed to them. According to the POA, the areas are “common area” because (i) they were included in the area identified as OFB Subdivision in the...

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