Vista Del Mar Development Ltd Plaintiff v (1) Janet Francis (2) Dwight Clarke Defendants
| Jurisdiction | Cayman Islands |
| Judge | The Hon. Justice Ingrid Mangatal |
| Judgment Date | 20 September 2016 |
| Court | Grand Court (Cayman Islands) |
| Docket Number | CAUSE NO G 247 of 2014 |
| Date | 20 September 2016 |
The Hon. Justice Ingrid Mangatal
Contract — Sale of Land — Specific Performance — Agreement by Purchasers to Commence and Complete Construction within a Specific Time — Deed of Variation — Vendor's Option to Re-Purchase in the Event of Purchaser's Breach — Whether Option Valid and Enforceable — Whether Void for uncertainty — Whether Option Clause imposed primary or secondary obligation — Whether Penalty Clause — Whether Option void for perpetuity — Perpetuities Law (1999) Revision — Whether discretionary Bars, to remedy of Specific Performance — Laches, Unclean Hands.
Mr. M Imrie and Ms. G Freeman of Maples and Calder representing the Plaintiff
Mr. H Robinson of Mourant Ozannes representing the Defendants
Mr. Charles Robinson and Mr. Arek Joseph— Representatives of the Company
Ms. Janet Francis and Mr. Dwight Clarke— Defendants.
The Plaintiff Vista Del Mar Limited (‘VDM’) is a duly incorporated company, carrying on the business of land developers.
VDM entered into an Agreement for Sale dated 6 March 2009 (‘the Agreement for Sale’) with the Defendants Janet Francis (‘Ms. Francis’) and Dwight Clarke (‘Mr. Clarke’) (together referred to as ‘the Defendants’) whereby, amongst other matters, VDM agreed to sell, and the Defendants agreed to purchase from VDM a parcel of land, namely Block 10A parcel 290 in registration section West Bay Beach North (‘the Property’). The Property forms part of the Vista Del Mar Development located near the Yacht Club and Salt Creek, in West Bay, Grand Cayman.
This is a claim by VDM for specific performance of the Agreement for Sale, as amended by the Deed of Variation of Agreement, the terms of which will be discussed below.
The Agreement for Sale contained the following express terms, amongst others:
‘Clause 5:
The Purchaser acknowledges and agrees that it is under an obligation pursuant to the Restrictive Agreements to commence and diligently proceed with the construction of a residence and ancillary buildings, landscaping and other development works on the Property, in all respects subject to and in accordance with the Restrictive Agreements (‘the Construction Works’). In relation to the Construction Works, the Purchaser hereby acknowledges and agrees:
Clause 5:1:
that it will engage a reputable local building contractor (‘the Building Contractor’) to undertake the Construction Works, whose appointment will be subject to the Vendor's prior written approval (which shall not be unreasonably withheld or delayed or subject to any unreasonable conditions);
Clause 5.2:
That it will submit to the Vendor a draft of the building contract which it proposes to enter into with the Building Contractor (‘the Building Contract’) and will not execute same or otherwise allow the Building Contractor to commence the Construction Works until its terms have been approved in writing by the Vendor, such approval not to be unreasonably withheld, delayed or subject to conditions provided such terms comply with the Restrictive Agreements in all respects;
Clause 5.3:
that the Construction Works will be carried out with all reasonable speed and in all respects in accordance with the Restrictive Agreements; and
Clause 5.4:
That the Building Contractor will undertake the Construction Works as principal under the Building Contract and not in any way as the Vendor's or any other person's agent, and therefore for the avoidance of doubt that the Purchaser will have no recourse or cause of action against the Vendor whatsoever in connection with the Construction Works notwithstanding the Vendor's approval of them.
Clause 6.1:
The Purchaser acknowledges and agrees that the Property comprises part of the Development and that it is or will be subject to various restrictions, guidelines and regulations from time to time in force which the Purchaser agrees are necessary for the upkeep and management of the Development….
Clause 6.2:
The Purchaser agrees, so that the same shall survive Completion, that if, save for reasons beyond its control (including acts of God), it has failed either to commence construction of a residence on the Property within eighteen (18) calendar months of Completion or to complete such construction by the date of being the third anniversary of the Completion Date, both pursuant to the Restrictive Agreements, then in either case it will upon receipt of the written notice from the Vendor requiring it to do so sell the Property back to the Vendor at a price equal to the Purchase Price plus the value of the Construction Works (if any) on it as at the date of receipt by it of the Vendor's notice. For the purpose of this clause, the value of the Construction Works shall mean the sum actually paid by the Purchaser for the Construction Works before its transfer of the Property back to the Vendor pursuant to this Clause 6.2.
Clause 6.3:
The Purchaser will not transfer the Property to any third party without that third party having first entered into an agreement with the Vendor in similar terms to Clauses 6.1, 6.2 and this Clause 6.3 and further consents to the Vendor registering a caution in the Land Register after completion regarding the agreement herein contained, which the Vendor agrees to remove immediately upon the completion of the Construction Works.
Clause 7.1:
The Purchaser acknowledges that it will be deemed to have examined or had the opportunity to examine the Property and obtain such legal and other expert advice as it considers appropriate and the Purchaser purchases the Property in its existing condition and state of repair (including any faults or defects whether latent or patent) and relying on its own enquiries, inspections and investigations.
Clause 7.2 The Purchaser acknowledges that:
(a) no representations, inducements, assurances, warranties or conditions (other than those contained in this Agreement) have been made by the Vendor or its agent or representatives relating to the Property;
(b) if any such representation, inducement, assurance or warranty has been made or if any information or reports have been provided to the Purchaser by the Vendor or its agent or representatives, the Purchaser has not relied on it but has relied on its own independent enquiries, inspections and research and received its own independent expert advice.
Clause 19;
In this Agreement time is of the essence.’
(Underlining emphasis mine)
The Restrictive Covenants Agreement included the following express covenant, which VDM argue reinforced the requirements of Clauses 5 and 6 of the Agreement for Sale:
‘Clause 5:
…the Property shall not remain unbuilt on for more than eighteen months from the date of registration of these covenants, and construction shall be completed and the Dwelling ready for occupancy within a reasonable length of time thereafter, and in any event within eighteen months from the date of commencement of construction.’
At paragraph 7 of the Statement of Claim, VDM states that it performed its obligations under the Agreement for Sale, completing the Agreement, and transferred the Property to the Defendants, in accordance with the Agreement for Sale.
VDM alleges that in breach of the express terms, the Defendants failed to either commence construction of a residence on the Property within eighteen calendar months of Completion, or to complete such construction by the third anniversary of the Completion Date.
On 11 April 2011, VDM and the Defendants entered into a written Deed of Variation to Agreement. The Deed of Variation to Agreement contained, amongst others, the following express terms:
Recital A:
VDM entered into an agreement with Francis & Clarke on 6 March 2009 (which agreement is for the purposes of this Deed called the ‘Agreement’) agreeing to sell to the Purchaser the whole of the land comprised in Parcel 290 Block 10A West Bay Beach North (‘Land’) for the consideration of Four Hundred and Sixty Two Thousand Four Hundred and Sixty United States Dollars (US$462,460.00).
Recital B:
Pursuant to the Agreement; completion of the Agreement (and the transfer of the Land) was effected on or around 8 May 2009.
Recital C:
The Agreement contains various post-completion obligations on the part of Francis & Clarke including (but not limited to) the timing of the commencement and completion of the construction of a residential dwelling on the Land (to the intent that the provisions of the Agreement do not merge on completion) (‘Post-Completion Obligations’).
Recital D:
Francis & Clarke have requested an extension of time from VDM in relation to the Post-Completion Obligations: VDM has agreed to that extension on the terms and conditions set out in this Deed.
Recital E:
VDM and Francis & Clarke have agreed to enter into this Deed to record the variations to the Agreement agreed between them.
3. Variation
3.2 The Agreement and this Deed shall be read in conjunction and in the event of an inconsistency between the provisions of the Agreement and this Deed, then the provisions of this Deed shall prevail but only to the extent of such inconsistency.
4. Variation to the Agreement
The parties acknowledge and agree that:
Clause 4.1:
The contents of Clause 6.2 are deleted and the following inserted in its place:
clause 6.2 The Purchaser agrees, so that the same shall survive completion, that if, save for reasons beyond its control (including acts of God), it has failed either to commence construction of a residence on the Property by 9 January 2012 or to complete such construction by eighteen (18) months thereafter, then in either...
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