Between 1) Melko Dobroslavic 2) Ronalee Murray-Dobroslavic Plaintiffs v 1) Grand Harbour Properties 2) Dale Crighton 3) Trevor Watkins Defendants
| Jurisdiction | Cayman Islands |
| Judge | Justice Cheryll Richards |
| Judgment Date | 31 March 2023 |
| Docket Number | CAUSE NO. G 117 OF 2022 |
| Court | Grand Court (Cayman Islands) |
The Hon. Justice Cheryll Richards KC
CAUSE NO. G 117 OF 2022
IN THE GRAND COURT OF THE CAYMAN ISLANDS
CIVIL DIVISION
Civil litigation-Grand Court Rules Order 14 r.1 2-Application for Summary Judgment, Whether Company Proper Party to a Claim in Misrepresentation.
Submissions: The Plaintiffs in Person
Mr. Ian Huskisson of Travers Thorp Alberga for the Defendants
By Summons filed 23 rd June 2022, the three Defendants sought orders for summary judgment against the Plaintiffs. The orders were sought pursuant to Grand Court Rules (GCR) O.14 r.12, on the ground that the claims brought have no prospects of success. The application in the alternative was that the claims be struck out pursuant to GCR O.18 r.19 on the ground that they disclose no reasonable cause of action. At the hearing the Defendants indicated that having seen the evidence of the Plaintiffs in response, the application is now limited to the personal claims against the Second and Third Defendants. The Defendants submit that there is no proper legal or factual basis to proceed against the two Defendants in their personal capacities.
The two Plaintiffs are the purchasers of Lot 43 Harbour Reach, (Block 22E Parcel 447REM4). This is a piece of land located in the Grand Harbour area of Grand Cayman (“the property”). The property was one of several parcels of land being sold as part of a land development project.
The First Defendant, Grand Harbour Properties Ltd., (“GHPL”) is the vendor of the property. The Third Defendant, Trevor Watkins is one of the Directors of GHPL and he and his wife are the beneficial owners of the First Defendant. The Second Defendant, Dale Crighton appears to be a real estate agent. His family's company is said to be Crighton Properties Limited (“CPL”) which was involved in the development as listing agents. CPL produced a brochure with information about the lots for sale in the development.
There is no dispute that on the 15 th December 2020 the First Plaintiff, Mr. Melko Dobroslavic entered into a written agreement to purchase (“offer to purchase”) the property from GHPL for the sum of CI$414,000.00. He paid a deposit of $150,000.00. The listing or submitting agent was Era Real Estate Cayman Islands, (“Era Real Estate”). On the 18 th December 2020, before the closing date of 30 th December 2020, the First Plaintiff and GHPL by way of a deed of covenant completed the transaction. The First Plaintiff thereafter requested that the property be transferred into the names of himself and his wife, Ronalee Murray-Dobroslavic, the Second Plaintiff.
On the 26 th May 2022 the Plaintiffs issued a Writ of Summons against the three Defendants. The Plaintiffs detail the cause of action as one in misrepresentation and deceit. They claim that certain representations were made by the sale signage and sale brochure for the property that were false. Exhibited to the Writ and to Mr. Dobroslavic's Affidavit dated 21 st July 2022 is sale signage which described the lots as prime canal front lots which are, “demucked and filled to bed rock”. The real estate agents to be contacted were named on the sign as CPL and IRG (Cayman Islands). Under the name CPL, the contact details for Mr. Crighton are listed. Also exhibited to the Affidavit is an excerpt from the sale brochure, which states:-
“With its raw land, fully demucked to bedrock and filled with compacted aggregate, safely retained by Grand Harbour's signature “Keystone” sea walls, lot owners have been able to build their homes without the need for expensive piling* and benefit from other key features such as integral, cantilevered docks, well-elevated grades and some of the deepest and widest canals in the Cayman Islands”.
The Plaintiffs assert that relying on these representations they contacted a real estate broker of ERA Real Estate and made an offer to purchase the property. Having purchased the property, the soil was tested. Two engineers advised that piling was necessary to a depth of some 19–21 feet in order to find bedrock. Construction on the property was delayed for about seven months in order to construct 43 pilings, before a building permit could be obtained. An attempt by the Plaintiffs to negotiate with the Developer by way of the Second Defendant failed. The Plaintiffs seek damages to include additional construction costs, interest costs for certain delays and punitive damages.
In broad summary the Defence filed on the 23 rd June 2022 is a denial of any false representations. It is admitted that the statements were made on signage and in the brochure, but it is said that there was a prominent footnote after the word piling in the brochure which stated, “subject to engineering survey and depending upon property being developed.” It is said that none of the Defendants represented or could be understood to have made representations that there could never be a need for piling.
In his Affidavit in response to the application dated 21 st July 2022, the First Plaintiff states that this footnote was not disclosed to them prior to the offer to purchase, the form of brochure which they were provided does not include this footnote.
At the hearing the Defendants indicated that having seen the evidence of the Plaintiffs in response, it is accepted that there is an issue of fact as to which form of the brochure was seen by the Plaintiffs.
The second main aspect of the defence is that it is said that the Plaintiffs are estopped from relying on any such representations in any event because the 15 th December agreement contained an “Entire Agreement” clause which is in the following terms:-
“ 19. Entire Agreement
This Offer to Purchase when executed by both parties is the complete agreement between the parties and the Purchaser hereby admits and declares that no statement, guarantee, promise, agreement, warranty or representation, whether oral or written, has been made with or to him on or prior to the date hereof by the Vendor, by anyone acting or purporting to act on the Vendor's behalf, by the listing Broker/Co-Broker or any real estate agent concerning the Property or otherwise which he relied upon, apart from as specifically set out in this Offer to Purchase. This Offer to Purchase may be executed by each party in counterpart and exchanged and shall be allowed to be properly executed and binding if so executed and exchanged” (emphasis added).”
By GCR O.14. r.12:-
-
(1) Where in an action to which this rule applies a defence has been served by any defendant, that defendant may, on the ground that the whole or part of the plaintiff's claim has no prospect of success or, in respect of a claim for damages, that the plaintiff has no prospect of recovering more than nominal damages, apply to the Court for the plaintiff's claim to be dismissed and judgment entered for the defendant on the whole or part of the claim.
-
(2) This rule applies to every action begun by writ in the Court other than one of a kind mentioned in rule 1(2).”
By GCR O.18, r.19:-
(1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the indorsement of any writ in the action, or anything in any pleading or in the indorsement, on the ground that —
(a) it discloses no reasonable cause of action or defence, as the case may be; or
(b) it is scandalous, frivolous or vexatious; or
(c) it may prejudice, embarrass or delay the fair trial of the action; or
(d) it is otherwise an abuse of the process of the court, and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.
(2) No evidence shall be admissible on an application under subparagraph (1)(a).
(3) This rule shall, so far as applicable, apply to an originating summons and a petition as if the summons or petition, as the case may be, were a pleading.”
In Goodman v. DMS Governance Limited 1, the Cayman Islands Court of Appeal identified the relevant principles to be applied on a claim for strike out. The Court considered an appeal against the summary dismissal of certain claims against a management company. The company was said to be vicariously liable for the acts of one of its employees who had provided director services. The appellate Court held that by GCR O.14, r.12 (1) a defendant may apply for summary judgment on the ground that the plaintiff's claim has no prospect of success. The court may dismiss the claim unless there is a prospect of success on the whole or part of the claim. The Court said that the issue is whether there is a real as opposed to a fanciful prospect of success.
The application of the Defendants is supported by the Affidavits of Mr. Crighton dated 23 rd June 2022, and Mr. Watkins dated 9 th July 2022. As noted above, the First Plaintiff has filed an Affidavit in response dated 21 st July 2022. The Second Plaintiff filed an affidavit dated 21 st July 2022 attesting to her consent and agreement to the Affidavit of the First Plaintiff.
Counsel on behalf of the Defendants submits and I accept that the central focus must be on the entities or persons who were the contracting parties with respect to the property. There has to be a nexus between the contracting party and the alleged misrepresentation. Counsel said that it is important to recognise that GHPL is the developer, the legal entity that developed and sold the land. I also accept that any representation which is alleged would have had to have been made either by the contracting party itself, GHPL or on its behalf.
I have identified the first factual question for the Court in so far as it can be determined at this stage as being the...
To continue reading
Request your trial