The Privy Council ruled against an appeal launched by February Point Resort Estates Ltd. regarding a dispute over a repayment for land on Exuma which was purchased more than 20 years ago by American Malik Momin.
The board of the Privy Council ruled that February Point Resort Estates Ltd. must repay to Malik Momin the purchase price paid plus interest on the lot he purchased in the Exuma development based on section 62 (1) of the Planning and Subdivision Act 2010 (Bahamas), which states that any conveyance made after the act comes into effect regarding lots not granted prior to subdivision approval shall be null and void.
The particulars of the case are that Momin in February 2008 entered into a sales agreement to purchase lot number 36 Elizabeth Harbour Estates on Exuma for $895,000.
After paying for the property in full in February 2013, Momin argued that he was entitled to the return of the money he had paid because February Point had not obtained the subdivision approval required by the 2010 act and by reason of section 62(1), there could be no valid conveyance to him.
“The defendant (February Point) argued that it was able and willing to convey the property to the plaintiff and that, applying section 62(2), that conveyance would not be null and void even though there had been a failure to obtain the necessary approval for the subdivision. The plaintiff was therefore not entitled to the return of the purchase price paid.
The case was originally held before Justice Indra Charles, who ruled in favor of February Point, however the decision was then reversed by the Court of Appeal. As a result the matter was taken to the Privy Council for appeal.
The matter was held before Lord Hodge, Lord Briggs, Lady Arden, Lord Sales and Lord Burrows; with Candice Hepburn representing the appellant February Point and Richard Wilson, QC and Christina Galanos representing the defendant Malik Momin.
Noting the differing interpretations on the law raised by each party’s counsel, the board gave its lengthy reasoning rejecting the submissions of Candice Hepburn, counsel for February Point, which in summary was that “There is no need, as a matter of contract law or property law (as opposed to criminal law) for the conveyance to have the necessary approval. The purchaser is therefore bound to accept and is in breach of contract if he does not do so, a conveyance from the vendor even though the subdivision does not have the necessary approval. In so far as the purchaser then has any problems by having acquired a lot for which there has been no subdivision approval, the purchaser has no redress against the vendor.”
The board continued, “We consider, in line with Mr. Wilson’s submissions, that the correct interpretation focuses on what section 62(1) plainly lays down, which is that any post-act conveyance of a lot made without the necessary approval is null and void. As regards a post-act conveyance, it does not matter whether the agreement to convey was made before or after the act, because any post-act conveyance without the necessary approval is invalid. It is only pre-act conveyances that are valid under section 62(2). Nothing is expressly laid down in section 62 as regards the validity or invalidity of post-act agreements to convey lots where there has been no subdivision approval, but section 62(2) lays down that pre-act agreements to convey without the necessary approval are valid. However, although a pre-act agreement to convey without the necessary approval is valid, there can be no valid post-act conveyance under such an agreement because of section 62(1).”
In its conclusion the Privy Council ruled, “For these reasons, the board will humbly advise Her Majesty that the appeal should be dismissed. Lest there be any doubt, we see no good reason to grant February Point Resort Estates Ltd. any further indulgence in terms of obtaining the necessary subdivision approval and therefore, February Point Resort Estates Ltd. should now repay to Malik Momin the purchase price paid plus interest.”