HMC Holdings Ltd v The Proprietors, Strata Plan No. 67
| Jurisdiction | Turks and Caicos Islands |
| Judge | Mr. Justice Carlos W. Simons OBE |
| Judgment Date | 20 April 2022 |
| Docket Number | ACTION NO. CL-174/2019 |
| Court | Supreme Court (Turks and Caicos) |
Mr. Justice Carlos W. Simons OBE QC
ACTION NO. CL-174/2019
IN THE SUPREME COURT
Mr. Ariel Misick QC, and with him Ms. Deborah John-Woodroffe of Misick & Stanbrook, Attorneys for the Plaintiff.
Mr. Conrad Griffiths QC of Griffiths & Partners, Attorneys for the Defendant. The Court noted the attendance with Mr. Griffiths QC, of Pupil Attorney Devonte Smith (as he then was).
The Plaintiff, HMC Holdings Ltd. (HMC) is a Turks and Caicos Islands (TCI) corporation. It was registered on 3 November 2011 for the purpose of purchasing and owning Unit 603 at the Regent Grand Resort (the Property). It has no other raison d'etre. The Regent Grand Resort (RGR) is a stratified beachfront hotel/condominium resort development in Grace Bay, Providenciales. It is registered as Strata Plan No. 67 in accordance with the Strata Titles Ordinance (Cap. 9.04) (STO). The RGR was completed in 2007 and its original by-laws were registered on 27 July 2007.
As its name suggests, the defendant (the Corporation) is the proprietor of Strata Plan No. 67. It is the statutory corporation established under s. 4 of the STO to own, manage, administer, and control the common property of the development for the benefit of all the proprietors of units comprised in the resort, and to keep the common property and all fixtures and fittings in a good state of repair and condition.
Various relevant provisions of the STO, the Strata Titles Regulations (STR) and the Corporation's By-Laws (the By-Laws) will be examined more closely as the need arises over the course of this judgment.
HMC has pleaded two causes of action against the Corporation, namely (a) breach of statutory and contractual duty; and (b) restitution for the replacement costs of certain windows in the Property. The Corporation has admitted liability for breach of duty, but on various grounds it disputes HMC's entitlement to recover the damages it claims, except for the damage flowing from its admitted failure to keep the flat roofs of the RGR in a good state of repair. The loss of rental claim arising from the admitted breach of the duty to repair is resisted on the ground that it is tainted by illegality and the restitution claim is contested on the basis that the windows in question are within the boundaries of the Property and as such are not common property in respect of which the Corporation has any responsibility.
The Court has been provided with a very helpful “Agreed Statement of Issues”, with detailed and well-reasoned skeleton arguments and full trial bundles and case law authorities. The Court is grateful for the organization and indexing of the voluminous material comprised in these submissions.
At the commencement of the trial Mr. Griffiths QC invited the Court to consider whether it had jurisdiction in relation to the boundaries issue that is pivotal to HMC's claim in restitution. His concern arose from section 17 of the Registered Land Ordinance (Cap. 9.01) (RLO), subsection (4) of which provides that “No court shall entertain any action or other proceeding relating to a dispute as to the boundaries of registered land unless the boundaries have been determined as provided in this section.”
And subsection (2) of section 17 provides that “Where any uncertainty or dispute arises as to the position of any boundary, the Registrar, on the application of any interested party, shall, on such evidence as the Registrar considers relevant, determine and indicate the position of the uncertain or disputed boundary.”
The jurisdiction issue is, as I have said, relevant to HMC's claim in restitution for the replacement costs of windows in the Property. If the windows concerned fall within the boundaries of common property, the Corporation would be liable to make good those costs. Alternatively, if the windows fall within the boundaries of the Property, then HMC's restitution claim must fail. This foreshadows to the interlocutory decision that I mention at paragraph 9 below and the discussion had there.
Mr. Misick QC in reply on the jurisdiction point, contended that section 17 of the RLO had no application in determining the location of a “common boundary” in a strata title setting, as that concept was unique to the strata titles structure of land ownership devised under the STO. He submitted that the boundaries referred in section 17 of the RLO are the boundaries shown on the Registry Map, and he noted that Division 3 of the RLO is headed up “ Maps, parcels and Boundaries”.
The jurisdiction of the Registrar under section 17 (2) of the RLO, Mr. Misick argued, is restricted to boundaries determined under the land adjudication regime that ushered in the land registration system that the RLO now governs. And he suggested that given the times of enactment of the two ordinances (the RLO in 1967 and the STO in 1971) the contention that section 17 of the RLO applied to disputed boundaries under the STO was unsustainable.
For the reasons advanced by Mr. Misick QC, I ruled that the court had jurisdiction and I allowed the trial to proceed on the boundaries issue that is central HMC's claim in restitution to recover the cost of windows replacement. It seemed to me then, and still does, that given the times of enactment of the two ordinances, in order for section 17 of the RLO to have any application to strata title boundaries, it would be necessary to impute to the drafters of that legislation (the RLO) a prescience that is not normally associated with the mundane and imprecise art of statutory interpretation.
Counsel agreed at the outset of the trial that on the issue of boundaries between strata lots, or between a strata lot and common property I am not bound by an interlocutory ruling that I made in Action No. CL-98/2020, SW Enterprises Ltd. v. The Proprietors, Strata Plan No. 67. There I ruled on an interlocutory application by Mr. Misick QC to amend his statement of claim, that as the strata plan in that case did not “otherwise specify” the common boundary, the common boundary must then be the center line of the wall (in that case) between the strata lot and the common property, and I expressed the view that:
“…the Court is bound by the plain language of the statue. Unless “otherwise specified” in the strata plan i.e., in the absence of any indication to the contrary in the strata plan, the boundary between the Unit and the common property shall be the center line of the wall separating the two. There is nothing “otherwise specified” in the registered strata plan that I can see.” And I ruled accordingly.
I shall now however, as Counsel have agreed, proceed on the basis that that interlocutory decision does not bind me, and I shall consider the matter afresh when the time comes.
Mrs. Monique King and her husband Robert King are the beneficial owners of HMC, and Mrs. King gave evidence on its behalf. At paragraph 5 of her witness statement she gives details of the time (over a year) and money (over $1 million) spent on home improvement works at the Property which were completed in early 2013. The Property was then placed on the short-term rental market, which was the primary purpose of its purchase, and as I have noted, the raison d'etre for HMC.
Mrs. King relates at paragraphs 7 and 8 of her witness statement, and confirmed in her viva voce evidence at trial, that over the years HMC developed a loyal customer base of returnee visitors that produced net annual rental incomes as follows: 2014: $70,880.00; 2015: $195,440.00; 2016: $169,426.00; 2017: 192,108.00; 2018: $250,376.00; 2019: $76,580.00 (January to June); 2020: $0.00; and 2021: $106,340.00 (April to November, the date of the witness statement). Rental income over the approximately seven (7) years from February 2014 to November 2021 on those figures would therefore have averaged $147,307.00 net of taxes, fees and other levies annually – a not insubstantial sum.
The damages that HMC claims arise from its inability to rent the Property due to its inhabitability resulting from the considerable damage caused by water ingression, the consequent cost of repairs, and the loss of rental income while those repairs were being carried out. In other words, damages, consequent upon and arising from the Corporation's failure to repair.
The Corporation has conceded failure to repair the flat roof at the eastern end of the building, part of which covers the Property. But Unit 702 also sits directly above the Property. So, on the evidence there could be the only two possible sources of water ingress into the Property, namely the flat roof that partially covers the Property, and/or Unit 702 which on the seventh floor, directly above it.
Kim Seabrook (along with her husband) is the beneficial owner of Regent Penthouse Ltd. which in turn is the registered proprietor of Unit 702. Mrs. Seabrook is also a member of the Executive Committee of the Corporation and gave evidence on its behalf. At paragraphs 14 to 19 of her witness statement she says (paraphrasing) that at least some of the water ingress into the Property came from a defective planter on the outside rear terrace of Unit 702. There might also have previously been some water ingress from a hot tub located on the front deck of Unit 702, but that problem had been resolved by removal of the hot tub and sealing of the plumbing.
Mrs. Seabrook told the Court that she brought the problem of the planter to Mrs. King's attention, and they agreed that, she (Mrs. Seabrook) would pay for the cost of repairs of any damage caused by water damage from that source. Mrs. King in her evidence said she didn't recall any such agreement and insisted that all water...
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