The Registered Land Act (2018 Revision) Between Cayman Kai Property Owners Association Plaintiff v Sea Watch Villas Ltd Defendant
| Jurisdiction | Cayman Islands |
| Judge | Justice Alistair Walters |
| Judgment Date | 30 November 2022 |
| Court | Grand Court (Cayman Islands) |
| Docket Number | Cause No. GC 80 of 2022 |
In the Matter of the Registered Land Act (2018 Revision)
Hon Justice Alistair Walters (Actg.)
Cause No. GC 80 of 2022
IN THE GRAND COURT OF THE CAYMAN ISLANDS
CIVIL DIVISION
Application for leave to appeal against dismissal of action — question of capacity of party. Whether meets test for representative person under GCR O.15 r.12 — Whether Originating Summons proceeding should continue as a writ action pursuant to GCR O.28, r.8, — Whether action should recommence as a writ action, question of costs and overriding objective.
Brett Basdeo, Chaowei Fan from Walkers on behalf of the Plaintiff, Samuel Jackson and Selina Tibbetts of Jackson Law on behalf of the Defendant.
This matter first came before me on 18 August 2022. The proceedings were started by the Plaintiff which is an unincorporated association (the “Association”) on 6 April 2022. The members of the Association are some of the owners of houses and land that are within an area known as Cayman Kai which comprises approximately 350 parcels of land. Membership is open to any owner of property within Cayman Kai. As between the various parcels of land within Cayman Kai there are restrictive covenants (the “Restrictive Covenants”).
The relevant sections of the Restrictive Covenants read as follows:
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“1. The premises shall not be used except for residential purposes. No building shall be erected, altered, placed or permitted to remain on the premises other than one detached single-family dwelling not to exceed 2 1/2 stories in height and a private garage for not more than three cars.
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2. No building shall be erected, placed or altered on the premises until the construction plans and specifications and a plan showing the location of structure had been approved by the architectural control committee as to quality of workmanship and materials, harmony of external design with existing structures and as to location with respect of typography and finish grade elevation. No fence or wall shall be erected, placed or altered on the premises unless similarly approved. Approval shall be as provided in paragraph 8.”
Paragraph 8 provides for the establishment of an “architectural control committee'” (the “ACC”) comprising three elected members elected by the registered proprietors of Cayman Kai (presumably also being members of the Association).
I will come back to the proceedings themselves but the first affidavit of George Reynolds, III who states that he is an elected member of the “Cayman Kai Architectural Control Committee” and makes his affidavit on behalf of the Plaintiff sets out the background to the dispute. In summary:
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4.1 The Defendant, Sea Watch Villas Limited is a registered proprietor of Block 33B, Parcel 139 (the “Property”) which is included within the parcels of land comprising Cayman Kai such that the Restrictive Covenants are registered against the title to that property.
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4.2 In or around 2 February 2016, prior to the Defendant acquiring the Property, the ACC was approached by the then owner who was seeking the ACC' s approval for the design of a home (the “House”) to be constructed on the Property and his membership in the Association. Over time and with some modifications to the initial plans, apparently the ACC approved the proposed design of the House and construction commenced in March 2017. Final approval of the plans by the ACC occurred on 30 August 2017. However the construction of the House was not completed and the construction project remained dormant for a number of years.
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4.3 Mr Reynolds says that in December 2021 he was made aware that construction had restarted on the House and that the construction now appeared to include a third storey which he says is outside the approval given by the ACC to the former owner and, Mr Reynolds says, was in breach of the Restrictive Covenants.
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4.4 Mr Reynolds was advised that the Property/House had been sold and on 6 January 2022 contact was made with Ms Bernadette Wood-Bodden, the principal of the Defendant which is the new owner. Mr Reynolds spoke with Ms Wood-Bodden on 7 January 2022. She explained that she was not aware of the provisions of the Restrictive Covenants before purchasing the Property. Mr Reynolds said that he was surprised by this as the Restrictive Covenants were noted in the encumbrances section of the land register for the Property.
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4.5 Mr Reynolds said that he sent a copy of the Restrictive Covenants by email to Ms Wood-Bodden. Mr Reynolds explains that the final design proposed by the former owner that was eventually approved by the ACC was very similar to the design proposed by the Defendant save for the inclusion of a third storey.
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4.6 On 12 January 2022 Mr Reynolds says that he received an email from Ms Wood-Bodden explaining that she believed that the construction was not in breach of the Restrictive Covenants.
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4.7 On 20 January 2022 Mr Reynolds emailed Ms Wood-Bodden to inform her that the plans that she provided for the construction could not be approved by the ACC because they included a third storey.
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4.8 Mr Reynolds says that this issue was raised at the AGM of the Association and that the meeting agreed unanimously that action should be taken against the Defendant to stop the construction of the third storey on the Property.
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4.9 During March and April 2022 the parties instructed counsel. The Defendant did not provide a requested undertaking to cease construction on the Property and the Association therefore commenced proceedings. By the time that the proceedings were commenced, apparently the construction of the House was substantially complete with only some finishing items left to be dealt with.
The proceedings themselves were commenced by way of Originating Summons dated 6 April 2022. The Plaintiffs claim is put as follows:
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“1. A declaration that the Defendant's construction of the proposed dwelling (the “ Dwelling”) on Block 33B, Parcel 139 of Registration Section Cayman Kai is in breach of the restrictive covenants registered thereon.
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2. Until further order of the Court, orders to restrain the Defendant from continued construction of the dwelling as proposed.
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3. Such further or other relief as this Honourable Court thinks fit.
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4. Costs.”
No further pleadings were filed and the parties exchanged a number of affidavits. The affidavits served on behalf of the Plaintiff do not elaborate on the relief sought by the Plaintiff. The furthest that Mr Reynolds goes in his first affidavit which was expressed to be sworn in support of an application for an injunction against the Defendant is to say:
“40. In the circumstances, it is hoped that this Honourable Court will grant the relief sought in the Association's Originating Summons, to enable the parties to return to the negotiating table and make best efforts to preserve the Restrictive Covenants enjoyed by all proprietors of Cayman Kai.”
Mr Reynolds swore a third affidavit dated 19 July 2022 in support of the application to amend the Originating Summons 1 (see below) and concludes:
“14. Despite these bare assertions, it is important for the Plaintiff, and this Honourable Court, to understand the extent to which the Defendant has contravened the Restrictive Covenants, especially where the Defendant has committed further breaches of the Restrictive Covenants. In the event that this Honourable Court grants the relief sought by the Plaintiff in its Originating
Summons, the ACC will be considering what steps the Defendant will need to take to bring the dwelling into compliance.”
The Originating Summons seems to be seeking an interim injunction pending the resolution of the question of whether the Restrictive Covenants have been breached. As at the date of the 22 August 2022 hearing, an application for an interim injunction had not been made.
After inter partes correspondence, matters came to a head when counsel for the Defendant issued a summons dated 9 August 2022 seeking an order striking out the proceedings pursuant to GCR O.18, rule 19 (a) and (d) on the basis that the Plaintiff does not possess the requisite locus standi whether in its own capacity or in a representative capacity to bring and continue the proceedings. The relevant rule reads as follows:
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“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 —
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(a) it discloses no reasonable cause of action or defence, as the case may be; or
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(b) it is scandalous, frivolous or vexatious; or
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(c) it may prejudice, embarrass or delay the fair trial of the action; or
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(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.
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(2) No evidence shall be admissible on an application under subparagraph (1)(a).
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(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 response, although not accepting that it was necessary, the Plaintiff issued its own summons dated 19 July 2022 worded as follows:
“LET ALL PARTIES CONCERNED attend… upon an application by the Cayman Kai Property Owners Association, in its representative capacity for its members, for the following orders:
1. Pursuant to Order 20, rule 5(1) of the GCR, the Plaintiff has leave to file and serve the Amended Originating Summons in substantially the same form as annexed to this Summons.
2. Pursuant to Order 28, rule 1A(6) of the GCR, the Plaintiff has leave to file and serve the Third Affidavit of George Koues Reynolds, III, sworn 18...
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