First Caribbean International Bank (Cayman) Ltd Plaintiff v Green Thumb Nursery and Landscaping Ltd Defendant
| Jurisdiction | Cayman Islands |
| Judge | The Honourable Justice Ingrid Mangatal |
| Judgment Date | 26 June 2015 |
| Judgment citation (vLex) | [2015] CIGC J0626-1 |
| Docket Number | Cause No. 75 of 2015 |
| Court | Grand Court (Cayman Islands) |
| Date | 26 June 2015 |
In The Matter of the Registered Land Law (2004 Revision)
IN CHAMBERS
The Honourable Justice Ingrid Mangatal
On the 18th June 2015,1 granted the following orders which had been sought by the Plaintiff First Caribbean International Bank (Cayman) Limited (‘FCIB’) by way of Originating Summons dated May 7 2015:
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‘1. The Plaintiff is entitled to sell the property for US $2,300,000.00.
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2. The Plaintiff is entitled to immediate possession of all that property registered in the Cayman Land Register being particularly known as Registration Section: George Town Central, Block 13D, Parcel 37 (‘the Property’).
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3. The Plaintiff is granted leave, pursuant to theGrand Court Rules (‘the GCR’) Order 45 Rule 3( 1) and (2), to issue a Writ of Possession in respect of the Property.’
At the time of giving my decision, I promised to provide my reasons for the decision at a later date. This is a fulfillment of that promise.
The Originating Summons was supported by two Affidavits, both filed May 7 2015. These were the Affidavits of Patrick Cover, Senior Corporate Manager of FCIB, and Jeremy Hurst, President, Broker and Owner of International Realty Group Limited (‘IRG’).
On July 13 2010 FCIB entered into a non-revolving demand loan agreement with the Defendant Green Thumb Nursery and Landscaping Limited (‘Green Thumb’) for the sum of US$3,822,953.00 in order to consolidate and restructure Green Thumb's other loans and overdraft facilities (‘the Loan Agreement’). The sums loaned were secured by a legal charge dated June 17 2010 registered against George Town central, Block 13D, Parcel 37 (‘the Property’). The Property is registered in the name of Green Thumb.
Green Thumb defaulted on the terms of the Loan Agreement and by March 12 2012 was six months in arrears. Accordingly, FCIB's Attorneys served statutory notices on Green Thumb pursuant to sections 72 and 64 of the Registered Land Law (‘RLL’) with a view to enforcing the Bank's rights under the charge instrument. Green Thumb failed to pay the arrears within 3 months. Clause 9.3 of the Charge provides that upon exercise of the power of sale, FCIB had the right to sell the Property by private treaty as well as by public auction.
FCIB and Green Thumb entered into a Forbearance Agreement on August 31 2012 and that Agreement was further extended until February 28 2013 so that Green Thumb could produce its financial statements and allow FCIB to carry out a comprehensive assessment of Green Thumb's accounts.
Mr. Cover in his affidavit states that by 28th February 2013, Green Thumb failed to comply with the terms of the Forbearance Agreement. Further, that on 1 May 2013, Green Thumb was put on notice that FCIB would invoke its statutory power to sell the Property pursuant to section 75 of the RLL.
In or about June 2013, the Property was listed on the CIREBA Multiple Listing System (‘The MLS’) through listing agent and realtor IRG at a list price of CI$3,000,000.00. This list price was in accordance with a valuation report that FCIB had obtained from BCQS International (‘BCQS’) Valuers stating the market value to be CI$3,000,000.00.
By letter dated August 20 2013, Stuarts, Attorneys, wrote to FCIB's Attorneys, Ritch & Connolly, confirming that they now acted for Green Thumb, and enclosing a valuation from DDL Studio Ltd, (‘DDL’) Valuers, which stated the market value was Cl $5,675,000.00.
By letter dated September 5 2013 Ritch & Connolly replied, stating that the DDL valuation was not accepted because, for a number of reasons, it was flawed. The letter pointed out, amongst other matters, that in any event, the Property had, by that stage, already been listed for three months at CI $3,000,000.00 without attracting any serious interest.
Approximately a month later, in a letter dated October 2 2013, Stuarts informed Ritch & Connolly that Green Thumb had entered into a contract to sell the Property at a price of US$4,800,000.00 (CI$3,936,000.00). According to Mr. Cover, (at paragraph 14),:—
‘The contract, which was provided with the letter, was dated 2 August 2013. It was surprising that an unknown overseas purchaser would offer to purchase the property at such a price without having had any contact with the listing agent, IRG, and that [Green Thumb] failed to notify [FCIB] of the contract until 2 months after it was signed.’
On October 8 2013, it was agreed that FCIB would remove the listing of the Property for a period of seven days to allow Green Thumb to provide further documentation andinformation to show that the proposed sale was genuine. IRG were immediately day marketing period wassinstructed to remove the listing.
However, by November 13 2013, when no further documentation and information had been received from Green Thumb, Ritch and Connolly informed Stuarts that the Property would be placed back on the Market if no response was received by November 15 2013.
There were a number of other communications back and forth with regard to the relisting of the Property, when suddenly on 13 January 2014, Stuarts emailed Ritch and Connolly informing that the sale pursuant to the contract dated August 2 2013 was to proceed and close two days later on January 15 2014. Stuarts requested redemption figures which were subsequently provided.
By a letter dated February 3rd 2014, Stuarts confirmed that the proposed sale had fallen through, allegedly as a result of the advertisement of the Property by IRG.
Between February to April 2014, Ritch and Connolly and Stuarts continued to exchange correspondence, with Ritch and Connolly attempting to seek confirmation that Green Thumb would cooperate with the marketing and sale of the Property and Stuarts repeatedly asserting that Green Thumb would not cooperate with marketing and sale of the Property, at what Green Thumb considered to be an undervalue.
It is Mr. Cover's evidence that, as a result of the continuing dispute with Green Thumb regarding the value of the Property and the difference between the valuation reports provided by BCQS and DDL, FCIB instructed an expert in valuation, Michael Treacy of Bould Consulting (‘Bould’) to examine and report upon the BCQS and DDL valuations.
In essence, the conclusion of the Bould Report was that the two valuations were flawed, that the DDL report should not be relied upon and caution should be exercised in relation to the BCQS Valuation.
Bould were also instructed to itself provide a further valuation report. In that Report dated March 2014 Bould stated that the market value of the Property was CI$ 1,950,000.00, or US$2,378,049.00. It was also stated that the market value with a special assumption of a 180 day marketing period was CI$1,560,000 or US$1,902,439.00.
Mr. Hurst deposed in his affidavit that he has been a member of the Cayman Islands Real Estate and Brokers Association (‘CIREBA’) since 1997. He established IRG, after having worked in the Cayman Islands Real Estate Market, including the commercial, development and luxury residential property sectors, since arriving in the Cayman Islands in 1988. Prior to that, he worked in the UK commercial property industry.
Mr. Hurst indicated that in July 2013, on the instructions of FCIB, he listed the Property on the CIREBA MLS with a listing price of CIS3,000,000.00 and the Property was immediately advertised on the IRG and the CIREBA websites. Preparations were also made for wider marketing, including photography of the Property, design of signage and design of a marketing flyer.
On September 20 2013, IRG sent a marketing email, marketing the Property, to IRG's commercial property investor database which comprised approximately 150 known commercial property investors locally and internationally. IRG, Mr. Hurst stated, administered its standard practice, which was to follow up with personal calls to key local and international buyers.
IRG also placed an advertisement in the CIREBA Fall/Winter 2013 Magazine which is a free magazine that is readily available from numerous retail outlets and business premises and of which 14,000 copies are printed.
Mr. Hurst indicated that, having been informed by FCIB's Attorneys that Green Thumb had complained that the listings and advertisements did not make it clear that it was only the Property that was for sale (and not the Green Thumb business), in December 2013 he wrote to CIREBA to request that the listing for the Property be revised to expressly state that it was only the Property that was for sale. In January 2014 that amendment was made to the IRGwebsite. An advertisement was also placed in the CIREBA Spring/Summer 2014 magazine which has a print run of 7,500 copies.
Mr. Hurst confirmed that upon a number of occasions, IRG was instructed by FCIB to remove the Property from the IRG website and the MLS and then IRG would be subsequently instructed to put it back on again. On one occasion, it was removed for the reason that Green Thumb claimed to have an alleged contract for sale at US$4.85 Million, and another subsequent occasion, for FCIB to seek further advice from a Valuer.
On the 6th May 2014 FCIB instructed IRG to relist the Property with a list price of Cl $3,000,000.00. On or about the 16th May 2014 Mr. Hurst was instructed that Mr. Godfrey Dawkins, the principal of Green Thumb, continued not to agree to a ‘For Sale’ sign being put at the Property, unless the list price was increased to US$4,850,000.00 or CI$3,977,000 and Mr. Flurst was instructed to increase the list price, which he did accordingly.
By July 2014, a year after the Property had initially been listed, Mr. Hurst...
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