Court name
Supreme Court of Turks and Caicos Islands
Case number
CL 174 of 2019

HMC Holdings Ltd. v. Proprietors Strata Plan No. 67 (CL 174 of 2019) [2022] TCASC 4 (20 April 2022);

Media neutral citation
[2022] TCASC 4
Case summary:

HMC pleaded two causes of action against the Corporation, namely (a) breach of statutory and contractual duty; and (b) restitution for the replacement costs of certain windows at a property at the Regent Grand Resort. The Corporation admitted liability for breach of duty, but on various grounds it disputed the remedies the HMC was entitled to.

Headnote and holding:

The Court inter alia granted the claim for damages for breach of the duty to repair, negligence and nuisance by the Corporation.

Coram
Simons QC, J

 

 

 

 

IN THE SUPREME COURT                                                                             ACTION NO. CL-174/2019

TURKS AND CAICOS ISLANDS

 

BETWEEN

HMC HOLDINGS LTD.

Plaintiff

And

THE PROPRIETORS, STRATA PLAN NO. 67

Defendant

 

 

___________________

JUDGMENT

____________________

 

Before:                                               Mr. Justice Carlos W. Simons OBE QC

Appearances (in person):       Mr. Ariel Misick QC, and with him Ms. Deborah John-                                                                                          Woodroffe of Misick & Stanbrook, Attorneys for                                                                                                     the Plaintiff.

Mr. Conrad Griffiths QC of Griffiths & Partners, Attorneys for the Defendant. The Court noted the attendance with Mr. Griffiths QC, of Pupil Attorney Devonte Smith (as he then was).

Trial Dates:                                     13 to 15 December 2021.

Venue:                                                Court No. 5, Graceway House, Providenciales

Date Delivered:                            Via Email on Wednesday, 20 April 2022

 

The Parties

  1. The Plaintiff, HMC Holdings Ltd. (HMC) is a Turks and Caicos Islands (TCI) corporation. It was registered on 3 November 2011 for the purpose of purchasing and owning Unit 603 at the Regent Grand Resort (the Property). It has no other raison d’etre. The Regent Grand Resort (RGR) is a stratified beachfront hotel/condominium resort development in Grace Bay, Providenciales. It is registered as Strata Plan No. 67 in accordance with the Strata Titles Ordinance (Cap. 9.04) (STO). The RGR was completed in 2007 and its original by-laws were registered on 27 July 2007.

 

  1. As its name suggests, the defendant (the Corporation) is the proprietor of Strata Plan No. 67. It is the statutory corporation established under s. 4 of the STO to own, manage, administer, and control the common property of the development for the benefit of all the proprietors of units comprised in the resort, and to keep the common property and all fixtures and fittings in a good state of repair and condition.

 

  1. Various relevant provisions of the STO, the Strata Titles Regulations (STR) and the Corporation’s By-Laws (the By-Laws) will be examined more closely as the need arises over the course of this judgment.

Causes of Action and Issues in Dispute

  1. HMC has pleaded two causes of action against the Corporation, namely (a) breach of statutory and contractual duty; and (b) restitution for the replacement costs of certain windows in the Property. The Corporation has admitted liability for breach of duty, but on various grounds it disputes HMC’s entitlement to recover the damages it claims, except for the damage flowing from its admitted failure to keep the flat roofs of the RGR in a good state of repair. The loss of rental claim arising from the admitted breach of the duty to repair is resisted on the ground that it is tainted by illegality and the restitution claim is contested on the basis that the windows in question are within the boundaries of the Property and as such are not common property in respect of which the Corporation has any responsibility.

 

  1. The Court has been provided with a very helpful “Agreed Statement of Issues”, with detailed and well-reasoned skeleton arguments and full trial bundles and case law authorities. The Court is grateful for the organization and indexing of the voluminous material comprised in these submissions.

Jurisdiction

  1. At the commencement of the trial Mr. Griffiths QC invited the Court to consider whether it had jurisdiction in relation to the boundaries issue that is pivotal to HMC’s claim in restitution. His concern arose from section 17 of the Registered Land Ordinance (Cap. 9.01) (RLO), subsection (4) of which provides that “No court shall entertain any action or other proceeding relating to a dispute as to the boundaries of registered land unless the boundaries have been determined as provided in this section.”

And subsection (2) of section 17 provides that “Where any uncertainty or dispute arises as to the position of any boundary, the Registrar, on the application of any interested party, shall, on such evidence as the Registrar considers relevant, determine and indicate the position of the uncertain or disputed boundary.”

The jurisdiction issue is, as I have said, relevant to HMC’s claim in restitution for the replacement costs of windows in the Property. If the windows concerned fall within the boundaries of common property, the Corporation would be liable to make good those costs. Alternatively, if the windows fall within the boundaries of the Property, then HMC’s restitution claim must fail. This foreshadows to the interlocutory decision that I mention at paragraph 9 below and the discussion had there.

 

  1. Mr. Misick QC in reply on the jurisdiction point, contended that section 17 of the RLO had no application in determining the location of a “common boundary” in a strata title setting, as that concept was unique to the strata titles structure of land ownership devised under the STO. He submitted that the boundaries referred in section 17 of the RLO are the boundaries shown on the Registry Map, and he noted that Division 3 of the RLO is headed up “Maps, parcels and Boundaries”.

 

  1. The jurisdiction of the Registrar under section 17 (2) of the RLO, Mr. Misick argued, is restricted to boundaries determined under the land adjudication regime that ushered in the land registration system that the RLO now governs. And he suggested that given the times of enactment of the two ordinances (the RLO in 1967 and the STO in 1971) the contention that section 17 of the RLO applied to disputed boundaries under the STO was unsustainable.

 

  1. For the reasons advanced by Mr. Misick QC, I ruled that the court had jurisdiction and I allowed the trial to proceed on the boundaries issue that is central HMC’s claim in restitution to recover the cost of windows replacement. It seemed to me then, and still does, that given the times of enactment of the two ordinances, in order for section 17 of the RLO to have any application to strata title boundaries, it would be necessary to impute to the drafters of that legislation (the RLO) a prescience that is not normally associated with the mundane and imprecise art of statutory interpretation.

Interlocutory Ruling

  1. Counsel agreed at the outset of the trial that on the issue of boundaries between strata lots, or between a strata lot and common property I am not bound by an interlocutory ruling that I made in Action No. CL-98/2020, SW Enterprises Ltd. v. The Proprietors, Strata Plan No. 67. There I ruled on an interlocutory application by Mr. Misick QC to amend his statement of claim, that as the strata plan in that case did not “otherwise specify” the common boundary, the common boundary must then be the center line of the wall (in that case) between the strata lot and the common property, and I expressed the view that:

“…the Court is bound by the plain language of the statue. Unless “otherwise specified” in the strata plan i.e., in the absence of any indication to the contrary in the strata plan, the boundary between the Unit and the common property shall be the center line of the wall separating the two. There is nothing “otherwise specified” in the registered strata plan that I can see.”  And I ruled accordingly.

I shall now however, as Counsel have agreed, proceed on the basis that that interlocutory decision does not bind me, and I shall consider the matter afresh when the time comes.

Water ingression and failure to repair

  1. Mrs. Monique King and her husband Robert King are the beneficial owners of HMC, and Mrs. King gave evidence on its behalf.  At paragraph 5 of her witness statement she gives details of the time (over a year) and money (over $1 million) spent on home improvement works at the Property which were completed in early 2013. The Property was then placed on the short-term rental market, which was the primary purpose of its purchase, and as I have noted, the raison d’etre for HMC.

 

  1. Mrs. King relates at paragraphs 7 and 8 of her witness statement, and confirmed in her viva voce evidence at trial, that over the years HMC developed a loyal customer base of returnee visitors that produced net annual rental incomes as follows: 2014: $70,880.00; 2015: $195,440.00; 2016: $169,426.00; 2017: 192,108.00; 2018: $250,376.00; 2019: $76,580.00 (January to June); 2020: $0.00; and 2021: $106,340.00 (April to November, the date of the witness statement). Rental income over the approximately seven (7) years from February 2014 to November 2021 on those figures would therefore have averaged $147,307.00 net of taxes, fees and other levies annually – a not insubstantial sum.

 

  1. The damages that HMC claims arise from its inability to rent the Property due to its inhabitability resulting from the considerable damage caused by water ingression, the consequent cost of repairs, and the loss of rental income while those repairs were being carried out. In other words, damages, consequent upon and arising from the Corporation’s failure to repair.

 

  1. The Corporation has conceded failure to repair the flat roof at the eastern end of the building, part of which covers the Property. But Unit 702 also sits directly above the Property. So, on the evidence there could be the only two possible sources of water ingress into the Property, namely the flat roof that partially covers the Property, and/or Unit 702 which on the seventh floor, directly above it.

 

  1. Kim Seabrook (along with her husband) is the beneficial owner of Regent Penthouse Ltd. which in turn is the registered proprietor of Unit 702. Mrs. Seabrook is also a member of the Executive Committee of the Corporation and gave evidence on its behalf. At paragraphs 14 to 19 of her witness statement she says (paraphrasing) that at least some of the water ingress into the Property came from a defective planter on the outside rear terrace of Unit 702. There might also have previously been some water ingress from a hot tub located on the front deck of Unit 702, but that problem had been resolved by removal of the hot tub and sealing of the plumbing.

 

  1. Mrs. Seabrook told the Court that she brought the problem of the planter to Mrs. King’s attention, and they agreed that, she (Mrs. Seabrook) would pay for the cost of repairs of any damage caused by water damage from that source. Mrs. King in her evidence said she didn’t recall any such agreement and insisted that all water ingress into the Property came from the flat roof, which is common property. She further said that this situation continues. Indeed, that was visible on the Court’s own visit to the property on the first day of the trial at the invitation of Counsel, and from the tour of the Property and of Unit 702 and the flat roof conducted by Mrs. King and Mrs. Seabrook respectively.

 

  1. The Court accepts the evidence of Mrs. Seabrook regarding water ingress via the planter, and previously via the hot tub (which seems not to be in issue any longer). Both these possible sources appear to have been resolved. However, consistent with Mrs. Seabrook’s offer to Mrs. King, any water ingress from Unit 702 would be a matter for which Regent Penthouse Ltd., as registered proprietor of Unit 702 is responsible, not the Corporation.

 

  1. But Regent Penthouse Ltd. is not sued in these proceedings. In the circumstances, and doing the best I can, based upon the evidence of Mrs. King, on the experts’ comments regarding the unpredictability of water flow within concealed spaces, on the drawings that were produced at the trial, and from the Court’s own visit to the Property and its surrounds it seems reasonable to conclude that:
  1. given the relative size and location of the planter vis-a-vis the flat roof; and
  2. given that the problem of water ingress continues even after the planter has been repaired; and
  3. given that the locations of water ingress into the Property and the damage caused extends beyond the entry hallway that is directly beneath the planter

most of the water ingress would have come via the flat roof which is common property for which the Corporation is responsible and in respect of which it admits breach of the duty to repair. With these considerations in mind, the Court finds the Corporation liable for 90% of the repair costs claimed by HMC in respect of the damage sustained by the Property from water ingress; such damages are to be assessed if not agreed between the parties.

HMC’s claim for loss of rental income and the defence of illegality

                (a) The Corporation’s Case

  1. HMC also claims loss of rental income arising from its inability to rent the Property when it was uninhabitable and under repairs due to water ingress damage. In response to HMC’s claim in this regard, the Corporation says that with effect from 4 May 2018 when the By-Laws were amended, HMC were prohibited from renting the Property except through the Corporation’s designated rental manager (DRM). HMC, the Corporation says, have steadfastly refused to use the DRM and are therefore not entitled to recover damages based upon their own breach of the By-Laws.

 

  1. The argument is set out by Mr. Griffiths QC at paragraphs 43 to 54 of his skeleton argument. In a nutshell, it is constructed as follows. TCI case law up to the level of the Privy Council establishes the right of a strata corporation to control use of strata lots and empowers a strata corporation to propose and enact By-Law amendments. He relies on two cases in particular – O’Connor and others v. The Proprietors, Strata Plan No. 51 [2017] UKPC 45, and Dodds v. The Proprietors, Strata Plan No. 27 CL-70/2017, a judgment of the Hon. Mrs. Justice Margaret Ramsay-Hale CJ.

 

  1.  So, he says that if permitted by the By-Laws, the strata corporation can require that rentals be conducted exclusively through a single designated manager, which is what happened in this case, the aim being to promote generally the use, enjoyment, and control of the strata development for the benefit of all the proprietors. Because HMC have refused to rent through the DRM in breach of the By-Laws they are not entitled to recover the damages they claim for loss of rental income. He relies on section 20 (1) and (7) of the STO which expressly provide for control, management, administration, use and enjoyment of strata lots to be regulated by the by-laws of the strata corporation and that the by-laws shall bind the corporation and the proprietors to observe and perform all the provisions thereof.

 

  1. On Mr. Griffiths’ analysis, because the by-laws prohibited rental otherwise than through the DRM the damages for loss of rental income that HRM claims is not recoverable the loss arises from an unlawful activity. He notes that the case of Patel v. Mirza [2016] UKSC 42, upon which Mr. Misick QC relies (among others) was primarily concerned with private law contracts whereas here the basis of HMC’s damages is claim for breach of statutory duty. In that context and by virtue of section 20 subsections (1) and (7) of the STO, HMC and the Corporation are bound by the By-Laws which are enforceable under the STO, and the Court should not grant relief to HMC for loss of revenue derived from renting the Property in breach of the By-Laws.

 

  1. Concluding his argument on this point, Mr. Griffiths quotes Lord Toulson at paragraph [99] of Patel on the two broad policy reasons for the common law doctrine of illegality as a defence to a civil claim, one being that a person should not be allowed to profit from his own wrongdoing, and the other that the law should be coherent and not self-defeating, condoning illegality by giving with one hand what it takes away. You cannot lawfully rent except via the DRM (for which injunctive restraint is available), yet award HMC damages for doing just that.

 

(b) HMC’s Rebuttal

 

  1. Mr. Misick QC discusses his client’s claim for loss of rental income against the background of the illegality defence at paragraphs 12 to 22 of his skeleton argument. He begins with the origins of the defence as laid down by Lord Mansfield in Holman v. Johnson 98 AER 1120 where he says that no court would lend it aid to a man who founds his cause on an immoral or an illegal act. So he says we have to ask first, would the breach of the designated rental manager By-Law constitute illegality or immorality; and secondly, if so would allowing the claim be harmful to the legal system according to the test laid down in Patel.

 

  1. Mr. Misick submits that wrongdoing for the purposes of the illegality defence means criminal or quasi-criminal acts and does not extend to wrongs such as breach of contract or merely tortious acts. This is because the latter do not engage the public interest, upon which the illegality defence is founded. He quotes from Lord Sumption in Les Laboratories Servier v. Apotex Inc. [2014] UKSC 55 at [23] where the learned Judge analyses the meaning of the words “immoral” or “illegal” as used by Lord Mansfield in Holman and concludes that it meant acts that engage the interests of the state, or the public interest. Lord Sumption goes on to say that the public has its own interest in conduct giving rise to the illegality defence and indeed because of this, a judge might be bound to take the point of his own motion, contrary to the ordinary principle in adversarial litigation.

 

  1. Further, Mr. Misick draws attention to paragraph [28] of the case where Lord Sumption notes the absence of any case in which the illegality defence has been applied to acts that are neither criminal nor quasi-criminal but merely tortious or in breach of contract. He goes on to say that torts, breaches of contract, statutory and other civil wrongs offend against interests that are essentially private, not public and there is no reason in cases of this nature for the law to withhold its ordinary remedies as the public interest is sufficiently served by the availability of a system of corrective justice to regulate the consequences as between the parties affected. And so, he says that the illegality defence is unavailable to the Corporation as the wrong committed by HMC does not engage the public interest, being concerned purely with the private interests of the parties affected, and therefore the second question does not arise.

 

  1. In addition, Mr. Misick contends that even if the second question falls to be considered because it was thought that HMC’s breach of the By-Laws constituted a qualifying wrong, the recovery of loss of rent should not be denied because it does no harm to the integrity of the legal system by permitting incoherent contradictions. And again, he relies on Lord Toulson in Patel at [101] where he says that in judging whether allowing a claim which is in some way tainted by illegality would be contrary to public policy as being harmful to the integrity of the legal system one must consider the underlying purpose of the prohibition that has been transgresses, any relevant public policy that may be adversely affected by denial of the claim and take an approach that applies the law with a due sense of proportionality.

 

  1. At paragraphs 19, 20 and 21 Mr. Misick analyses these three considerations, noting first that purpose of the DRM By-Law is to protect the private commercial interest of the corporation. Secondly, to deny HMC’s claim for damages would disturb the well-recognized public policy interest in application of the laws of occupiers’ liability negligence and nuisance to protect property rights and run counter to the Corporation’s maintenance and repair obligations under section 5 of the STO as regards the common property. He submits that HMC’s loss of rental income claim derives not from any wrongdoing as described in Patel but rather from the Corporation’s interference with HMC’s legally recognized property rights by the Corporation’s admitted breach of the duty to maintain and repair the common property.

 

  1. Finally, on the question of proportionality (if it arises) Mr. Misick QC submits it would be disproportionate to deny HMC’s claim for loss of rental income in circumstances where the Corporation has never sought injunctive relief to restrain the breach by HMC of the DRM By-Law but instead imposed a penalty of $550.00 per day which HMC has paid. Further as to causation, he points out that the claim arises in consequence of the Corporation’s breach of duty, not HMC’s breach of the By-Laws.

Discussion and Resolution

  1. The arguments advanced on behalf of the Corporation and HMC respectively in relation to the loss of rental income claim have been put very elegantly and are both compelling and finely balanced. I disagree with Mr. Misick QC however that this is a matter that does not engage the public interest. I believe the public must have an interest in the orderly management and control of condominium resorts, which are so central to the economy of the Islands and which the legislature, via the STO has charged the Corporation with, in this case.

 

  1. Tracing the evolution of the case law upon which Mr. Misick QC relies we see the following: first, in the Holman case Lord Mansfield states the general proposition that the court will not assist a Plaintiff whose cause of action is founded upon an immoral or illegal act. Clearly acts that are criminal in nature would be both illegal and immoral, so there is no issue on that score and the question does not arise in that way in this case; secondly, in Les Laboratories Lord Sumption, in considering exactly what Lord Mansfield meant by immoral or illegal acts that do not engage the criminal law. Lord Sumption opines that, consistent with the way judges had applied the principle over the years,  Lord Mansfield meant acts that engage the interest of the state, i.e. the public interest. Finally, the principle is further refined by Lord Toulson in Patel where he identifies the three considerations referred to by Mr. Misick that might lead a judge to deny a claim that is tainted by illegality as being contrary to the public interest because it would be harmful to the integrity of the legal system.

 

  1. There are two statements made by Lord Sumption at paragraph 28 in Patel that are relied on by Mr. Misick QC as supporting his client’s case but a proper analysis of which I believe, undermines it. The first is where, in categorizing the quality of the acts that would justify denying a claim such as HMC’s, the learned Judge excludes torts (other than those of which dishonesty is an essential element) and he also excludes breach of contract, statutory and other civil wrongs. Secondly, he says that is because these non-criminal or quasi-criminal acts offend against interests that are essentially private, not public.

 

  1. Taking the second statement first and reminding myself that given the flexibility that must be maintained in the development of the law, judges seldom have the luxury to speak in absolutes, I read the phrase “essentially private, not public” in the context in which it is used to mean “generally private, not public” or “usually private, not public”, thereby admitting of exceptions in appropriate cases. In my judgment the present case would be such an appropriate case. Otherwise, chaos would reign in an industry that is key to the economy and in a way that the legislature could not have intended, given the care that has obviously been taken by enacting primary and secondary legislation to create a structure that is orderly and well-managed and that is beneficial to the state as well as to the participants in the industry. There is there a public interest in how condominium resort developments are run.

 

  1. As to the first statement, i. e., the learned Judge’s exclusion of torts other than those involving dishonesty, it seems to me to be arguable as a matter of common sense that a proprietor who rents in breach of the by-laws of a development and then recovers damages for loss of rental income has indeed engaged in a form of dishonesty, since by renting outside the by-laws he would have avoided paying applicable fees or other levies in respect of such rental into the very fund from which his damages must be paid. Even if not dishonest per se, it is to my mind in a way immoral (the word originally used by Lord Mansfield), and something sufficiently unfair about it that in my view the Court should decline to lend its aid.

 

  1. In this case, whilst it is true as Mr. Misick QC reminds me, that the Corporation has historically imposed a penalty for the breach of the DRM By-Law which HMC has paid, the fact that in principle, the Corporation disputes HMC’s entitlement to recover damages on the ground of illegality, may be taken as an indication that they do not consider the penalty to be a satisfactory way of dealing with the matter. In the same way, the fact that they have not applied for injunctive restraint may indicate a sensible regard for litigation costs and the fact that the fund they administer is comprised of the dues and strata fees paid by the proprietors of the resort and of which the Corporation is essentially a trustee.

 

  1. I do not believe it would be disproportionate in the circumstances therefore, to deny that portion, if any of HMC’s claim that arises after the enactment of the DRM By-Law, or in instances where the penalty was not levied or paid, and I do so order.

 

  1. To complete the discussion on this point, I note that the illegality defence is not just a matter of dispute resolution between litigants. Lord Sumption in Les Laboratories at paragraph [23] pointed out that the illegality defence where it arises, arises in the public interest, irrespective of the interests or rights of the parties, and he went on to suggest that because the public has its own interest in conduct giving rise to the illegality defence, a judge may be bound to take the point of his own motion, contrary to the ordinary principle in adversarial litigation.

 

  1. I believe this is a proper case for the point to be taken from the bench, and I do so. Embracing Lord Sumption’s invitation therefore (if I can put it that way), I hold that generally the public does have an interest in proprietors’ complying with the by-laws of strata corporations. To protect that interest and to protect the integrity of the legal system in the Islands, having regard to the STO and STR, I deny the claim of HMC for damages for loss of rental income. I find that it arises from an act that is tainted by illegality and in which the public has an interest that ought to be protected, regardless of the private interests or rights of the parties. To the extent needed to establish a public interest in the absence of evidence on the point, I take judicial notice of the pivotal significance of the condominium resort sector to the overall tourist trade and therefore to the economy, the citizens, and the government.

 

  1. Finally on the illegality defence, I disagree with Mr. Misick’s analysis and application of the trio of necessary considerations mentioned by Lord Toulson at paragraph [101] of the Patel case as discussed by Mr. Misick at paragraphs 19 to 21 of his written submissions and in his oral submissions to the Court.

 

  1. First, I believe there is public policy support for the application of the illegality defence in this case, namely the public policy of ensuring that the laws of the state are complied with. The DRM By-Law derives from statute (the STO) and a breach of the By-Law is to that extent a breach of the law of the land, never mind there is no state-imposed penalty for such breach.

 

  1. Secondly, the public policy founded upon the rules of occupiers’ liability, negligence and nuisance is not negated or rendered ineffective or less effective by denial of the claim, as witness the Corporation’s admission of liability for failure to repair and the award of damages that I have made against the Corporation in that regard. It is true, as Mr. Misick urges that HMC’s rental income derives from its legally recognized property rights, but recovery of its loss is tainted by illegality in a way that the Court cannot countenance, and hence declines to lend its aid.

 

  1. Thirdly, on the issue of proportionality, I do not as I said, believe it would be disproportionate to deny the HMC claim for loss of rental income merely because the Corporation has never sought injunctive restraint, but has imposed a penalty instead. Proportionality is achieved in the circumstances by limiting recovery, as I have done, to any period prior to the introduction of the DRM By-Law. Post adoption of the DRM By-Law and notice thereof to HMC any loss from any rental in breach of it is caught by the illegality defence and is not a loss that the Court will lend its assistance in recovering.

 

  1. A fortiori, I do not believe the sentiments expressed by learned Counsel for HMC at paragraph 22 of his written submissions are of such pressing concern. I do not believe that refusing the relief prayed by HMC would offend against the public interest in property protection rights in the way Counsel seems to fear. Self-evidently, in this very Judgment, and in furtherance of the protection of those very rights, the Corporation, after admitting its negligence, its breach of statutory and contractual duty and admitting the nuisance it has permitted, is brought to heel, held liable and ordered to pay damages for the repairs that HMC were compelled to undertake. To deny a further claim for loss of rental income that is tainted with illegality does not, in my view threaten well-established public policies of protection of property rights.

Loss of Amenity

  1. Learned counsel for HMC also includes in his written submissions and outlined in his oral submissions to the court a claim for loss of amenity. There is a question as to whether the claim is properly or sufficiently pleaded, if at all, and I shall return to that. Meanwhile, Learned counsel for the Corporation objects to the claim in principle. He says that a claim for loss of amenity is logically incompatible with a claim for loss of rental income. In addition, he says that a loss of amenity claim would accrue to HMC (a corporate), not its beneficial owners and on the authority of Prest v. Petrodel [2013] UKSC 34, he submits that HMC cannot pierce or waive its own corporate veil, and neither can the Court.

 

  1. I do not believe that Prest offers Mr. Griffiths QC the support he needs to sustain his argument, except in the round-about and indirect way in the sense that in Prest the corporate veil was pierced at the instance of a wife prosecuting ancillary relief proceedings against a devious husband. In this case and on this point, I do not believe the issue of piercing the corporate veil even arises. The Corporation has historically dealt with the Kings as the beneficial owners and the controlling minds of HMC and to pretend otherwise at this point merely for the purpose of defeating a claim for loss of amenity would be a fiction. So, I hold that the claim is in principle maintainable.

 

  1.  Secondly, it is not immediately obvious why a claim for loss of amenity should be incompatible with a claim for loss of rental income. The Merriam-Webster Dictionary definition of “amenity” is “something that helps to provide comfort, convenience or enjoyment”. Clearly an inanimate entity such as HMC cannot suffer a loss of essentially animate sentiments. However, as I have observed, the Kings have historically been accepted and dealt with by the Corporation as the beneficial owners and controlling minds, in effect the alter ego of HMC and to pretend otherwise now would be a sham. So, the loss of amenity in to be imputed to the Kings and I hold that it is in principle recoverable. The loss of rental income claim stands on its own as a separate head of damages and I have dealt with it as such.

 

  1. Finally, Mr. Griffiths complains that loss of amenity claim is not properly pleaded or identified in law. As to the sufficiency of the pleading, I disagree, and I hold that paragraph 11 (g) of the Amended Statement of Claim is a sufficient plea for loss of amenity and that it is sufficient to support the relief prayed at paragraph 12 (3) of the Amended Statement of Claim. Alternatively, I grant the loss of amenity claim under the “catch-all” “Further or other relief” prayer at paragraph 12 (6).

 

  1. I also accept the urgings of Mr. Misick QC at paragraphs 24 and 25 of his written submissions that the cases of Moorjani v. Durban Estates [2015] EWCA Civ 1252 and Calabar Properties Ltd. v. Stitchler [1983] 3 All ER 759 are authorities for the recoverability in principle of such damages, and that they also offer guidance as to the proper measure of damages to be awarded in such cases.

 

  1. I note however that at paragraph 26 of his written submissions, Mr. Misick offers that HMC intends to obtain expert evidence to enable the Court to assess HMC’s loss of amenity by reference to the damage to the capital value of the Property by reason of its being in a state of disrepair. Unless both counsel agree otherwise, it would therefore be the Court’s intention to defer the assessment of damages for loss of amenity until such expert evidence has been produced, received, and considered and the Court can hear the submissions of both parties as to its import.

The Claim in Restitution and the Boundary Dispute

  1. Part III of the STO is headed up “Strata Plans” and within that Part, section 7 is headed up “Requirements of strata plans”. So far as is relevant to the boundary dispute issue section 7 is in the following terms:

“7. (1) Every strata plan shall –

(b) delineate the boundaries of the parcel and the location of the proposed building or existing building or buildings in relation thereto;

(c) include such elevations, sections, plans, diagrams and other information as shall be sufficient to –

  1. illustrate the strata lots and distinguish each lot by number;
  2. define the boundaries of each strata lot in the building or buildings by reference to floors, walls and ceilings, so however that it shall not be necessary to show any bearings or dimensions of strata lots;
  3. specify the appropriate floor area of each strata lot;” …

   (3) The common boundary between any two strata lots, or between a strata lot and       common property shall, unless otherwise specified in the relevant strata plan, be the center line of the floor wall or ceiling between such strata lots or strata lots and the common property, as the case may be.” (Emphasis added)

                Finally, for clarity I note the following relevant definitions from section 2:

“” common property” means in relation to any strata plan, so much of the land to which such plan relates as is for the time being not included in strata lot contained in such plan;

“parcel” means land subdivided in accordance with a strata plan registered pursuant to section 3;

                “strata lot” means a horizontal or vertical subdivision of a parcel which is shown on a   registered strata plan as a strata lot; …

                “strata plan” means the plan referred to in section 3(1); …”

Section 3 (1) merely provides for a proprietor of land to apply for the subdivision of any building on such land into strata lots and the registration of such lots in accordance with a strata plan to be submitted with the application.

  1. This then is the legislative context in which HMC’s claim in restitution is contested. If, based upon the Court’s construction of section 7 (3) of the STO, the boundary line is found to be the center line of the wall between the Property and common property, then the windows replacement costs incurred by HMC would be for the account of the Corporation in restitution. The Corporation would have been unjustly enriched to that extent and would be compelled to disgorge its ill-gotten gains. Conversely, if as learned counsel for the Corporation contends, the boundary line is the outside face of the wall that separates the Property from common property then the windows that were changed out by HMC were within the boundary line of the Property and the replacement costs were properly HMC’s, in which event the claim in restitution fails.

 

  1. It is also not lost upon the Court, as urged by both learned counsel that the decision either way might potentially affect the property rights of other proprietors who are not before the Court and who therefore have had no say in the matter. It appears to me that there might also be insurance and public liability implications. In addition, looking further across the spectrum, the decision to be made here could potentially affect other condominium developments and by extension the tourism accommodation industry generally. The point then is not confined to the parties in the litigation, nor to the RGR alone. It potentially impacts the commanding heights of the economy of the Islands (a fact of which I have already taken judicial notice) and it underlines the public policy interest that I have already found to exist in the orderly management of strata titles properties within the legislative framework that the state has devised.

HMC’s Case on the Boundary Dispute

  1. Mr. Misick QC takes view that section 7 (3) is to be read literally i.e., it is not necessary to look further than the plain language of the statute. In blunt terms, at paragraph 27 of his written submissions he puts his client’s case this way: “HMC’s case is that the Strata Plan does not specify the common boundary between strata lots and common property, so that by operation of section 7(3) of the STO, the common boundary is the centre line of the exterior wall.”

 

  1. Learned counsel diligently took the Court through the various other relevant sections of the STO and the STR and of course the Strata Plan No. 67 as reflected at paragraphs 28 to 41 of his written submissions and at paragraph 42 he says this: “As the common boundary is (a) not one of the mandatory inclusions to be expressed on the strata plan…and (b) it is not specified on the Strata Plan, it must therefore be the centre line of the exterior wall in which the windows are located. It is only if the windows are wholly on the Plaintiff’s property side of the centre line of the exterior wall that they would form part of the strata lot.”

 

  1. Mr. Misick finds support for this approach in three decisions of the Civil Resolution Tribunal of British Columbia, Canada (the Tribunal); decisions made under the Strata Property Act of that jurisdiction (the SPA). The SPA has similar provisions to those of the STO, particularly as regards the definitions of “common property” and “strata lot” (section 1 (1)). Also, section 68 (1) of the SPA bears a striking resemblance to section 7 (3) of the STO.

 

  1. In Newman v. The Owners, Strata Plan EPS 680, 2017 BCC 122 the Tribunal considered whether windows and doors in the strata lot were common property or were part of the strata lot. After analyzing the strata plan against sections 1(1) and 68 (1) of the SPA the Tribunal concluded that as there was nothing otherwise shown on the strata plan, the strata lot boundaries were to be governed by section 68 (1), i.e., the boundaries were to be taken to be the mid-way point between the surface of the structural portion of the wall that faces the strata lot and the surface of the structural portion of the wall that faces the other strata lot, the common property or the other parcel of land. By analogy, this would be the center line referenced in the STO.

 

  1. In Seymour et. al. v. The Owners, Strata Plan VR2697, 2018 BCCRT 227 the Tribunal by the same reasoning found windows that straddled the mid-point of the exterior wall but were not designated on the strata plan as common property or as part of the strata lot, to be common property even though some of the windows were on the owner’s strata lot. And finally, the same reasoning was applied in Basran v. The Owners, Strata Plan NW 1868 2020 BCCRT 573 where windows and doors that fell on both sides of the mid-point were held by the Tribunal to be common property in circumstances where the strata plan did not specifically address the matter.

Expert Evidence

  1. In dismissing the need for expert evidence, Mr. Misick QC notes that the Tribunal did not rely on any expert evidence to assist in distinguishing common property from strata lot, but that it merely looked at what was on the strata plan itself. He submitted that no expert is or should be required because whether or not the common boundary is specified, it is a matter for the court, looking at the strata plan to see whether the plan itself specifies a common boundary between a strata lot and common property.

 

  1. Learned counsel for HMC also relies on my interlocutory ruling in SW Enterprises v. The Proprietors, Strata Plan No. 67, Action No. 98/2020 delivered on 10 September 2021. There this same issue arose on an interlocutory application by a different Plaintiff against the same defendant to amend his pleadings. There I held the Court to be bound by the plain language of the statute, and that, applying section 7 (3) of the STO, in the absence of any indication to the contrary in the strata plan itself, the boundary between a strata lot and common property must be the centerline of the wall separating the two.

 

  1. Mr. Misick QC urges that there is nothing in either Mr. Hayward’s or Mr. Hutchings’ reports (experts called by the Corporation on the point) that should persuade me to alter my preliminary view as to the location of the common boundary in the RGR development. Before proceeding, I note again that it was an interlocutory decision involving a different Plaintiff on and application to amend pleadings and made without the benefit of the global view afforded by a full trial of the issues. Besides as I have noted at paragraph 10 above, counsel are in agreement that the ruling does not bind me for the purposes of this judgment so I am able to look at the matter afresh.

The Corporation’s Case on the Boundary Dispute and Expert Evidence

  1. Mr. Griffiths QC in his turn makes the following points. First, the strata plan shows (at page 3) that the Property has an exactly measured square footage of 5,658, a precise, not an approximate figure. Secondly, the Property shares a boundary wall with Unit 602 and the strata plan (at page 6) shows that the boundary between the two is the centerline of that wall. And thirdly, the boundary line then “jogs” outward at either end of the common boundary wall between the Property and Unit 602; jogs outward, that is at the northern and southern extremities where the exterior walls begin. He submits that this visibly shows that the boundary line “moves” to the outer edge of the exterior wall at these points (strata plan page 6). This, he says is visible both on the strata plan itself and even more so on the enlarged extracts of the strata plan in the expert’s reports, and that the expert and historical evidence is that the square footage of the Property at 5,658 square feet is measured precisely to the outside edge of the exterior wall of the Property.

 

  1. Learned counsel for the Corporation also points to the deed of transfer by which HMC purchased the property. The deed states that the area of the Property is 5,638 square feet which is the measurement to the outside face of the exterior wall. HMC, he says is bound by its deed. Further, that measurement is also reflected on both the land register and the strata plan. HMC’s precedent of title derives from the selling party to the deed of transfer as part of an overall scheme that created the strata plan and once the strata plan was registered the boundaries of the Property were fixed and could not be changed. He asserts that the strata plan does in fact show that the boundary between the Property and common property is the outside face of the exterior wall. This is visible on the strata plan and is also the evidence of the Corporation’s expert witnesses.

 

  1. Mr. Griffiths also asserts that the strata plan, drawn to a scale of 1:1250 complies with schedule 1, form 1 of the STO and with the STR, and that in accordance with section 7(1)(c)(ii) of the STO the strata plan does define the boundaries of each strata lot. He relies on Nene Valley Commissioners v. Dunkley 4 Ch D 1 where it was held that a plan will control a written description in a contract for sale, that by analogy the strata plan as drawn controls the application of section 7(3) and that as in Nene Valley, HMC knew exactly what it was purchasing based upon the deed of transfer and its subsequent conduct. He says that the words “unless otherwise specified in the relevant strata plan” in section 7(3) must mean that if the plan shows the boundary to be other than the centerline, then the boundary is as shown or as “specified”.

 

  1. The word as used in the section means only to identify and is not limited to only written words, especially in the context of a plan, and he notes the requirement in Regulation 4(g) of the STO for “printing, writing or drawing” to be clear and legible. He concludes that if it had been a requirement of the STO that the position of the boundary had to be identified in writing if other than the center line, then section 7(3) would have required an added reference to that effect, but it does not, and so there is no basis for the suggestion that a narrative description of a boundary is required. He asks rhetorically, what then is the meaning of the strata plan where the boundary “jogs” from the interior wall centerline to the outside edge of the exterior walls? The answer is that the “jog” has to have meaning and the meaning is that the outside edge of the exterior wall is the boundary.

 

  1. Finally, as regards expert evidence, Mr. Griffiths suggests that judges and lawyers are not experts on the interpretation of plans which is a matter for professionals practicing in such disciplines and he urges that the Court should be slow to reject unchallenged expert evidence on the question of the boundaries of Strata Plan 67 and that section 7(3) does not create an absolute rule but expressly permits the boundary to be otherwise than the center line if that is what the strata plan shows.

 

  1. I trust I have given fair summaries of the submissions of learned counsel on both sides and have not distorted their meaning or intent in any way, lest I fall into error in the discussion that follows and my decision as to how it ought to be resolved.

Discussion and Resolution of the Boundary Dispute

  1. The question arises as to what weight shall I attach to the decisions of the Tribunal that are relied on by Mr. Misick. Based on the principles of judicial comity I have due respect for and take due note of the decisions of the Tribunal, particularly as a court in a sister commonwealth jurisdiction administering the common law and addressing issues that are so eerily similar as those now before me. However, given the structure of the TCI court hierarchy, I consider the Tribunal’s decisions to be of persuasive authority at best and shall approach them in that light.

 

  1. I also remind myself that in determining this particular issue both learned counsel are ad idem that the interlocutory decision I made in SW Enterprises referred to above does not bind me. In addition, I note that that was an application to amend pleadings and the Corporation’s resistance to the application was based in part upon exactly this point at a time when it had not been decided. So, to refuse the application to amend would have been to shut out the Plaintiff from the seat of judgment and thereby decide the issue by default without the benefit of a full hearing such as has now been had. I also had not had the opportunity to hear the experts or to consider the import of what they had to say and the plans and diagrams that they referenced.

The Utility of Expert Evidence

  1. Having now had the full hearing mentioned above, I am constrained to disagree with Mr. Misick QC that in a matter such as this there is no need for expert evidence. It is clear to me now, that looking at the strata plan alone (as registered) with the naked eye is simply insufficient to do justice to the issue. In the language of the adage, “there is more to it than meets the eye” (particularly a pair as impaired as my own). Lawyers and judges are trained in the discovery, construction, and application of the law. They are not experts in the interpretation of architectural plans, of which this Strata Plan No. 67 is a species. Architecture and engineering are ancient and quite separate professional disciplines, practiced by persons trained and experienced in those fields and to whom there is every reason the Court should defer in such matters. So, I am obliged to weigh the expert evidence that had been put before me in this case. Mr. Griffiths QC was right to urge caution in this regard at paragraph 27 of his skeleton argument and in his oral submissions.

 

  1. Mr. Simon Hutchings of SWA Architects, was the Project Architect for the RGR development and was the person who instructed / oversaw the measurement of areas of the units to determine sellable square footage. The Corporation submitted in evidence two reports that Mr. Hutchings prepared for the purposes of the trial, addressed to the Court. Mr. Hutchings also gave viva voce evidence under oath at the trial which comported entirely with his two reports.

 

  1. As to the area measurement of the Property, he said at page 3 of his first report, dated 16 September 2021 (supported by architectural plans and drawings, in including an “Appendix 5”):

“Typically for Condo sales the measure used to determine area for sales purposes (sellable sq ft) is the GROSS measure to the outside face of the exterior unit walls, to the outside edge of balconies and to the centerline of any wall shared with another sellable unit (”party”) wall.” And:

“In summary the sum of gross internal area (4723sf) and gross external areas (870+65=935sf) gives a total gross area of 5658sf which will have been the area used by the developer in the sale of the property Unit 603 to the purchaser.”

 

  1. I delivered my interlocutory Ruling in SW Enterprises on 8 September 2021. On 1 December 2021 (12 days before the commencement of this trial) Mr. Hutchings submitted a second report to the Court, presumably part of the Corporation’s strategy to change the wind direction!
  2. In his second (supplemental) report Mr. Hutchings expands upon the comments he made in his principal report concerning the area of the Property and that are referred to above. He displays again Appendix 5, but this time with a portion of Unit 602 shown to the left (west) of the Property to show the party wall between the two units for clarity. He circles and highlights the points where the external walls of the Property transition to the party wall with Unit 602 that show at these points a “jog” in the lines of measurement. He then exhibits “blow ups” of those points that show the “jog” more clearly, and then says this:

“As an architect reading the plan it shows the boundary of a unit taken along the external walls, jogging to the centerline of the party wall. It is because of the jog and the fact that we know the boundary at the party wall is along its’ (sic) center line we can deduce that the boundary to the rest of the unit is taken along the exterior line of the external walls and terraces.”

 

  1. He was cross-examined by Mr. Misick QC, from which cross-examination his evidence emerged virtually intact. He said his work was commissioned by Mr. Griffiths QC, but he had not exhibited his letter of instructions. He said he had discussed his reports with Mr. Griffiths. He agreed that he is not a real estate agent and was not involved in the sale of the units. He said he was not involved in the preparation of the strata plan and also that the plan at page 398, although produced in 2007 was not a registered document (this plan is the Appendix 5 to Mr. Hutchings principal report referenced at paragraph 69 above).

 

  1. Crucially, when he was challenged on the last paragraph of his supplemental report (quoted at the end of paragraph 70 above) he said the reference to “the plan” there was a reference to the strata plan (which it may be recalled, he had not prepared) and that his statements were based on his knowledge of the strata plan and deductions from his observations of the strata plan but that the jogs were in the architectural plans that he prepared. On re-examination by Mr. Griffiths QC, he confirmed that the jogs shown on the plans exhibited at pages 3 and 4 of his supplemental report (pages 406 and 407 of trial bundle 1) tell him where the boundaries transition from the centerline in the case of a party wall, to the outside face of walls that separate the units from common property.

 

  1. Mr. Patrick Hayward of Benchmark Survey Associates also gave expert evidence. He submitted three reports, two dated 15 September 2021, and one 6 December 2021. Again, the timing admits of the Corporation’s concern regarding my interlocutory Ruling in the SW Enterprises matter.

 

  1. Mr. Hayward is a registered land surveyor with a degree in engineering surveying from Nottingham Trent University in the UK. He has practiced in the TCI for 20 years and before that, in the Cayman Islands for 5 years. He prepared Strata Plan No. 67 for registration, along with 20 or so others over the years.

 

  1. In his first report of 15 September, addressed to the Court he says at paragraph 4:

“4. I have recently overlayed the digital strata plan file with the design drawings [of RGR] and from that it is clear that the outside face of the wall was taken as the boundary between the unit and the common property to equal an area of 5,658 sq. ft. The centerline of the wall between two strata units forms that boundary. This accords with my recollection of how I prepared strata plans.”

And further on he says at paragraph 6:

“6. I have prepared over 20 strata plans in Turks and Caicos and to the best of my knowledge and recollection all of them were measured to the outside of the external walls. This was common practice. The only exception being the Ritz Carlton strata plan where the developer requested measurements to the internal face of the walls.”

Finally, in his report dated 6 December 2021 he relates that the strata plans were drawn in a CAD (Computer Aided Design) program to read which one would need CAD software. He then says this:

“When you look closely at the strata plan you can see there is a jog or deflection where the common walls end, and the exterior walls begin…These jogs are the boundary transitions from the center line of the wall to the exterior of the wall. This is more evident in the enlarged plan…but can be seen on the registered Strata plans.

“The only reason for a boundary to have a jog in these locations is that the unit boundary is changing from the centerline to the exterior wall. When you look at these jogs in the walls it is evident the exterior wall is the boundary when the wall is not common.

“I have read Section 73(3) of the Strata Titles Ordinance and believe these clear jogs in the boundary of the units does specify that the boundary changes to the exterior of the wall.”

 

  1. Mr. Hayward too was cross-examined by Mr. Misick QC. He was shown his letter to Mr. Griffiths QC dated 9th June 2021 (page 248 of Trial Bundle 1) and conceded that in it he makes no reference to “jogs” in discussing boundaries and window and door locations vis-a-vis the units and common property at RGR. He also conceded that he made no reference to jogs in certain subsequent correspondence, including his first report addressed to the Court dated 15 September 2021 (page 384 of Trial Bundle 1) and his letter to Mr. Griffiths QC also dated 15 September 2021 (page 386 of Trial Bundle 1). So, the first time he used the word “jog” was in his report dated 6 December 2021 addressed to the Court. That report was prepared at the request of Mr. Griffiths QC and is dated five days after Mr. Hutchings’ report on 1 December 2021. But he said he had never seen Mr. Hutchings’ report before. He said he believed the jog to visible in respect of every unit on the plan and that there was nothing omitted from the plan that he intended to be included, though adding a note might have made things clearer.

 

  1. I was impressed by both the content and the manner of delivery of the evidence given by Mr. Hutchings and Mr. Hayward. In each case what they had to say was logical, plausible, and reasonable. The evidence they gave was also uncontradicted by any experts called on behalf of HMC and was largely unimpeached in cross-examination. Their manner was in each case detached, dispassionate, and professional, and in Mr. Hutchings’ case in particular the evidence was delivered almost apologetically.

 

  1. Mr. Hayward did have some difficulty explaining his late introduction of the word “jog” to the conversation, but this was clearly not a matter of recent invention and did not come across as such – his evidence under oath rang true. So, I have no doubt that both Mr. Hutchings and Mr. Hayward gave objective unbiased opinions, based upon their professional training and practical experiences and that in doing so they were as mindful of their professional reputations as of their duty to the Court as expert witnesses giving evidence under oath.
  2. I therefore accept the expert evidence called on behalf of the Corporation and I hold that the boundary between the Property (of which HMC is the registered proprietor) and common property (which the Corporation is duty bound to repair and maintain) is “the exterior line of the external walls and terraces” to quote Mr. Hutchings. So, for the purposes of section 7(3) of the STO, the common boundary between the Property and common property, is “otherwise specified” in Strata Plan No. 67. According to that specification as indicated here, the windows that were replaced by HMC were within the boundaries of HMC’s property and the costs of doing so were properly for HMC’s account. HMC’s claim in restitution must therefore fail. I so hold.

Estoppel and Rectification

  1. At paragraphs 36 to 38 of its Re-Amended Defence and Counterclaim (pages 350 to 361, Tab 29 of Trial Bundle 1) the Corporation has pleaded estoppel and, in the alternative, seeks rectification of the Strata Plan. However, having reached the conclusion I have regarding the boundaries between the Property and common property at RGR, it seems to me that the defence of estoppel as deployed and asserted by the Corporation and its claim for rectification of the Strata Plan are rendered academic and otiose. While both learned counsel have quite properly addressed these issues in their written submissions and skeleton argument, not knowing of course how the section 7(3) STO argument would be resolved, anything I say on these matters at this point can only be obiter and as such is unlikely to contribute in any meaningful way to the advancement of jurisprudence in the TCI. I therefore do not propose to engage in that debate at this stage, but rather to leave the field open for debate and decision as circumstances may arise in the future.

Injunction

  1. Finally, at paragraph 12 (1) of its Amended Statement of Claim (pages 75 to 84, Tab 11 of Trial Bundle 1) HMC has asked the Court to make an order requiring the Defendant to immediately take all necessary and appropriate steps to effect permanent repairs to the flat roofs of the building. This would be a mandatory injunction which I decline to grant for three reasons. First, I was satisfied with the assurances given to the Court on behalf of the Corporation by Mrs. Kim Seabrook as to the tendering and timetabling of the repairs that all agree, and the Corporation accepts need to be done. These assurances were elicited by learned counsel for the Corporation, who as an officer of the Court would not have done so lightly. Secondly there may be any number of unforeseen exigencies that might reasonably affect or delay that timetabling, and the Court should not act in vain. And finally, in my judgment on any future approach to the Court that becomes necessary on the matter, damages would be an adequate remedy for any loss arising from undue delay by the Corporation in effecting such permanent repairs.

Overview: Claims Granted and Claims Denied

  1. Looking now at the respective prayers for relief in the pleadings of the parties, taking first HMC’s Amended Statement of Claim at paragraph 12 (items 1 to 6 below) and next the issue argued or raised by the Corporation at trial (items 7 and 8 below):
  1. I refuse the mandatory injunction.
  2. the claim for an account of insurance monies was withdrawn and not litigated.
  3. I grant the claim for damages for breach of the duty to repair, negligence and nuisance by the Corporation. This claim was conceded by the Corporation, and I find it proved. Recovery shall encompass all items listed under “Particulars of Special Damages” at paragraph 11 of the Amended Statement of Claim (pages 82 to 83, Tab 11 of Trial Bundle 1) except items (b) Loss of rental income, and (d) Cost of replacement windows. These I have disallowed on principle following full argument and for the reasons given. HMC is also awarded its loss of amenity claim to be assessed if the parties are unable to agree. This is allowed under the Further or other Relief prayer since it is pleaded but not specifically prayed.
  4. Prayer (3A) I refuse the claim in restitution for reimbursement of the window replacement costs.
  5. Prayer (3B) I refuse the order requiring the Corporation to undertake roof repairs without further delay – this is a variation of the mandatory injunction prayer dealt with at 1 above.
  6. I allow interest pursuant to the Civil Procedure Ordinance on the damages for breach of duty, negligence, and nuisance that I have awarded HMC against the Corporation.
  7. At the beginning of the trial, I rejected the Corporation’s challenge to the Court’s jurisdiction to decide the boundaries issue.
  8. However, given my decision in that regard it has not been necessary for me to consider either the estoppel or rectification claims raised by the Corporation, though these were justifiably responded to at some length by Mr. Misick QC.

Costs

  1. Given the outcomes summarized above, I believe the proper costs order should be that the Corporation shall have 75% of its costs to be taxed if not agreed, on the basis that the two issues on which the Corporation prevailed, namely HMC’s rental income claim and the illegality defence, and the boundary location dispute took up by far the majority of the time and resources invested in the trial and preparations for it. However, if either learned counsel disagrees, I would direct written submissions to be exchanged by the end of the day on Wednesday 13 April and delivered via email to my Clerk by noon on Thursday 14 April. By that timetable the formal release of the Judgment by end of the day on Thursday 14 April should not be delayed.

 

  1. The Easter holidays and the Court’s Easter Recess having intervened, the handing down of this Judgment has been delayed until today 20 April 2022. In response to the invitation issued at paragraph 86 above both Mr. Misick QC and Mr. Griffiths QC have made submissions on costs which I have now read, along with the case law and practice rules authorities that they rely on and have pointed me to.

 

  1. Unsurprisingly, the Corporation generally accepts the proposed costs order as a fair and appropriate outcome given the results re-capped at paragraph 85 above. HMC protests however, and says it is the successful party and should have its costs, having prevailed in respect of its central (and original) cause of action i.e., damages for the Corporation’s breach of the obligation to repair. This claim comprised three heads of loss on which HMC was unsuccessful in only one – loss of rental income. HMC succeeded in recovering the costs of repairs and damages for loss of amenity. HMC also of course lost on its claim in restitution for the costs of replacing windows in the Property, and its claim for a mandatory injunction.

 

  1. Nevertheless, I am generally persuaded on the arguments advanced by Mr. Misick QC on HMC’s behalf against the costs order that I had proposed to make, including its unprecedented form. Having been thus enlightened, and following the authority of the line of cases beginning with Re Elgindata (No. 2) 1992 1 W.L.R. 1207 and including Straker v. Tudor Rose [2007] EWCA Civ 365 and Pigot v. The Environmental Agency [2020] EWCA 1444 (Ch), and having regard to HMC’s success on what Mr. Misick QC refers to as its “central (and original) claim”, I now make the following order as to costs: HMC is to have its costs of the action, such costs to be taxed if not agreed, but such costs shall not include any costs in respect of heads of damage or causes of action on which HMC was unsuccessful, including loss of rental income, its claim in restitution for repayment of window replacement expenses, and its application for a mandatory injunction, all of which were denied.

 

  1. On the authority of the judgment of Stephen Joinder QC sitting in the High Court of England and Wales in Pigot (at paragraph 6 (3)), I will not order HMC  to pay the costs of the Corporation on any of the issues on which HMC was unsuccessful as I do not consider any of those issues to have been raised unreasonably, in the sense that it was, in the words of the learned Judge, “hopeless or ought never to have been pursued”. Whilst HMC’s claim in restitution and for loss of rental income did involve issues that go to the root of the Corporation’s statutory authority and its statutory duty to manage and control the common property of the strata community i.e., property boundaries and unfettered rental arrangement privileges, those issues were always arguable and HMC’s conduct in pursuing them cannot be impugned, notwithstanding their loss at trial. The same considerations apply in the case of the injunction to compel the Corporation to flat roof repairs.

Conclusion

  1. It remains only for me to thank learned counsel for their courtesies and assistance during the course of the trial, and for their patience in awaiting this Judgment. I have already mentioned counsels’ marshalling, mastering, and indexing of the voluminous documents in the case – pleadings, correspondence, evidence, statute, and case law authorities etc., for all of which the Court is very much in counsels’ debt.

 

 

Hon. Carlos W. Simons OBE QC

Judge of the Supreme Court

20 April 2022