Zelee (Bahamas) Development Ltd v Ocl Investments Ltd
| Jurisdiction | Bahamas |
| Judge | Evans, J. |
| Judgment Date | 24 July 2010 |
| Court | Supreme Court (Bahamas) |
| Docket Number | CLE/gen/FP No. 54 of 2009 |
| Date | 24 July 2010 |
Supreme Court
Gray Evans, J.
CLE/gen/FP No. 54 of 2009
Mr. Harvey O. Tynes QC and Miss Tanesha Tynes for the plaintiff.
Mr. Gregory K. Moss and Miss Lena Hield for the defendant.
Contract law - Agreement for sale and purchase of real property — Rescission of contract — Defendant occupier of premises — Whether defendant entitled to reasonable notice to vacate — Defendant found to be a tenant — Entitled to return of deposit less any maintenance fee.
These proceedings commenced by Originating Summons filed 3 March 2009 in which the plaintiff seeks the following relief:
- A Declaration that the vendor/plaintiff lawfully terminated the above-mentioned contract on 20 February 2009. 2. A Declaration that the vendor/plaintiff was entitled to vacant possession of Apartment 2, The Hamptons Condominium, Lot 4, Block 27 Bahamia Marina Subdivision, Freeport, Grand Bahama, as of 20 February 2009. 3. An Order that the purchaser/defendant deliver up immediate possession of Apartment 2, The Hamptons Condominium, Lot 4, Block 27 Bahamia Marina Subdivision, Freeport, Grand Bahama, to the vendor. 4. A Declaration that the vendor/plaintiff is entitled to mesne profits in respect of the purchaser/defendant's continued occupation of Apartment 2, The Hamptons Condominium, Lot 4, Block 27 Bahamia Marina Subdivision, Freeport, Grand Bahama, since 20 February 2009. 5. An Order that the purchaser/defendant pay mesne profits to the vendor/plaintiff. 6. An Order that the purchaser/defendant pay to the vendor/plaintiff the costs of these proceedings to be taxed if not agreed.
The defendants sought leave, which was not opposed, to have the relief prayed for at paragraph 24 of the affidavit of Leila Held filed 9 April 2009 stand as the defendants counterclaim to the plaintiffs application namely that:
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(1) the plaintiff's application be dismissed with costs to the defendant;
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(2) a declaration that the deposit herein be returned to the defendant;
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(3) the plaintiff be ordered to return the defendant's deposit.
The facts leading up to the present application, which, for the most part, are not disputed, are contained in the affidavit of Vivienne Gouthro sworn and filed on 3 March 2009 in support of the plaintiffs application and the affidavits of Lena M. Hield filed on 9 April 2009 and 11 May 2009 respectively in opposition thereto.
By contract dated 14 July 2007 the, plaintiff agreed to sell and the defendant agreed to purchase Apartment 2, The Hamptons Condominium located at Lot 4, Block 27 Bahamia Marina Subdivision, Freeport, Grand Bahama (“the said apartment”), for the sum of $350,000.00. The terms of payment were as follows:
“A deposit in the sum of US$ 100,000.00 at the signing of this contract, and the balance of the deposit in the amount of US$40,000.00 at closing on or before September 14, 2007. The outstanding balance of US$300,000.00 to be paid within five years OR on or before July 31, 2012. The outstanding balance to be amortized over 20 years at 8% interest. Payment is US$2,492.81 monthly. Principal and Interest, with a balloon after five years. There is no pre-payment penalty if paid within the five years.
Monthly maintenance: $350.00”
A handwritten notation on the agreement stated that the deposit of $10,000.00 was to be paid as to $1,500.00 on 26 July 2007 and as to $8,500.00 on 26 August 2007. The agreement also stipulated the date of possession as “on or before 14 September 2007”.
In a letter dated 16 August 2007 from Delisa Duncanson of the defendant company addressed to Mrs Street, the plaintiff's President, Ms. Duncanson wrote:
“Dear Mrs. Street:
Re: Apartment #2, The Hamptons,
#4 Pinta Avenue, Freeport, Grand Bahama
With reference to the agreement of sale and purchase we entered into on July 14, 2007 please find enclosed the balance of the deposit in the amount of $48,500.00 making a total of $50,000.00 as stated in this Agreement.
This amount is totally refundable if there is any legal problem with the clearance of title to the above referenced apartment. The closing date will remain the same giving the attorneys the necessary time to prepare the necessary documents.
This deposit in total is accented by you in agreement for OCL Ltd. to take immediate occupancy with all letters of release for utilities to be given upon the acceptance and the signing of this agreement.”
Mrs. Zelda Street “signed and accepted” the terms of the letter and the plaintiff was allowed into possession of the said apartment.
On 23 January 2008, counsel for the defendant wrote to counsel for the plaintiff requesting the plaintiff to deduce title to the said apartment and on 29 January 2008 counsel for the plaintiff replied forwarding copies of the plaintiff's title documents.
On 7 March 2008 counsel for the defendant wrote to counsel for the plaintiff making requisitions with respect to the plaintiff's title. Of particular note is the following requisition 6:
“6. As to the affidavit of Loss dated 10th July 1967 and recorded in volume 7027 at pages 453 to 456, we do not accept that an affidavit of Loss may be sworn by an Attorney-in-Fact. Kindly provide us with the authority for the same.”
On 16 April 2008 counsel for the plaintiff in response to the aforesaid requisition wrote:
“6. The Affidavit of Loss is not a document which can be pledged as security and refers to the Conveyance relating to Lot No. 4 Block No. 27 Bahamia Marina Subdivision, to which your client is not entitled. I fail to see how this affects title to Unit 2.”
By an exchange of correspondence passing between their respective counsels during the period 28 June 2008 to 8 October 2008 the parties expressed disagreement as to the meaning and effect to be given to the agreement for sale. Mrs. Gouthro for the plaintiff avers that it became apparent that the defendant was unwilling to accept title to the apartment as deduced by the plaintiff and in a letter dated 19 November 2008 to counsel for the plaintiff, counsel for the defendant expressed the view that the plaintiff's title was defective.
On 10 February 2009, counsel for he plaintiff wrote to counsel for the defendant giving notice that the plaintiff intended to rescind the contract and to return the $50,000.00 deposit to the defendant in accordance with the terms of “the refund of deposit clause” and thereby bring the contract to an end unless the defendant:
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(1) confirmed on or before the close of business on Friday, 13 February 2009 that the purchaser accepted the vendor's title;
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(2) immediately paid the sum of $42,377.77 representing arrears of monthly payments under the contract; and
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(3) undertook to pay the sum of $2,492.81 on or before the 14th day of each month.
On 19 February 2009 counsel for the defendant, in a “without prejudice” letter wrote to counsel for the plaintiff advising that the defendant was willing to accept the return of the deposit and thereby bring the contract for sale to an end on the ground that the plaintiff had failed to deduce title to the apartment but subject to two conditions, namely:
- That there be a return of maintenance fees paid by the defendant during the period the defendant was in possession of the apartment; and 2. That the defendant be given a period of two months to locate alternative accommodations prior to vacating the apartment.”
In response to which counsel for the plaintiff on 20 February 2009 wrote:
“On behalf of Zelee (Bahama) Development Limited we hereby give you notice that the contract for the sale of Apartment 2, The Hamptons Condominium, Bahamia Marina, Freeport is rescinded, effective immediately.
We acknowledge that the purchaser, OCL Investments Limited, is entitled to payment of the sum of $50,000.00 provided it yields up possession of Apartment 2 immediately and in a state of good repair.
We advise that the vendor would be willing to permit the purchaser to continue to occupy Apartment 2 for a further period of two months at the cost of $50,000.00 and the payment of the monthly maintenance fees.”
To which Mr. Moss, on behalf of the defendant responded on 3 March 2009, inter alia:
“We acknowledge receipt of your letter dated 20th February 2009.
As to your purported rescission of the subject agreement for sale “effective immediately” we draw to your attention that the agreement for sale herein dated 14 July, 2007, as amended by the 16th August, 2007 letter, does not provide for a contractual right of rescission. As such your client did not have, and does not have, a contractual right to rescind the agreement.
As to the nature of our client's tenancy we note that the same is in the nature of a monthly periodic tenancy pending completion… as our client has made monthly payments in respect of monthly maintenance fees. We, therefore, agree that your client is entitled to deduct any outstanding maintenance fees from the $50,000.00 deposit and note that your client is likewise required to give our client one (1) clear month's notice to vacate. As we are presently in the month of March, such a one (1) clear month's notice could be given to expire on 30th April, 2009 at the earliest.
We note that the notice which was given by your said letter dated 20th February 2009 was for “immediate” possession and was, therefore, not proper notice, and accordingly, null and void…”
With a view to allowing an orderly termination of the subject agreement for sale and without in any manner waiving our position that your client is not entitled as of right to rescind the said agreement for sale, we hereby accept your client's rescission of the agreement for sale herein on the ground that your client has failed to deduce a good and marketable title herein subject to the following conditions:
(1) The return of our client's deposit in the sum of...
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