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(CNS): The Cayman Islands Court of Appeal has overturned a Grand Court decision that rights acquired by almost 200 homeowners in the Britannia residential community to access what was once the beach and other amenities at the former Hyatt resort should have been honoured by the current landowner. The Dart Group acquired the derelict hotel destroyed in Hurricane Ivan in 2004 and the redeveloped Beach Suites, as well as the surrounding land in 2016. Since then, it has been in dispute with the Britannia owners about those access rights.
In a decision handed down by the appeal court yesterday, some ten months after the appeal was filed in May 2022, the panel of judges said they recognised the implications of this decision.
“The Court has well in mind that the outcome of this appeal will have a profoundly negative impact on some 193 proprietors who, when purchasing their properties, are likely to have paid a premium for the Rights that they would have assumed had been securely protected by restrictive agreements registered in the register,” the judges wrote.
But the court said it was “driven to conclude, the apparent restrictive agreements” that the owners had believed would protect their rights “lacked the essential ingredient plainly and obviously required” to actually restrict the building on or the use of the land by its owner.
“The die was therefore cast at the very moment that the requested entries were recorded in the register, and it is most unfortunate that the proprietors must bear the consequences of the mistaken selection of this defective mechanism for the protection of the Rights,” the appeal court ruled.
Responding to the ruling, Dart and its attorneys said it was an important decision “for certainty of title in respect of land in Cayman that is governed by the Registered Land Act”. The islands’ largest developer and their wealthiest investor had argued that once the group had bought the former resort, it should not be bound by deals struck 15 years previously that prevented it from developing the land, which is close to Camana Bay, the town built and owned by the Dart Group.
Dart, which is keen to retain the amenities at the new hotel on the former Beach Suite site exclusively for the use of its high-net-worth guests at Palm Heights, also closed the golf course at Britannia, shutting out the owners in the connected development from all the remaining amenities they believed they had paid for. As a result, the Britannia owners took on the powerful corporate entity and were successful in the Grand Court.
Dart has consistently contended that there was “considerable uncertainty” over the nature and validity of the rights. The group claimed to have engaged in discussions for years with Britannia owners seeking to reach an agreement but had been unable to do so and so reverted to the courts.
However, the appeal court found that although the owners’ rights did meet the definition of easements, which would have ensured their access to the property, they were not registered as such since the original parties specifically requested that the registrar record the encumbrances as a restrictive agreement, not an easement.
The court, therefore, agreed with Dart that the nature of the rights did not amount to restrictive agreements capable of being registered as encumbrances. In this significant conclusion, the appeal court has decided that this fundamental error on the Land Registrar must be rectified by cancelling and deleting the rights in their entirety.
“As things currently stand, the register contains entries registering agreements that do not qualify for
registration by reason of failing to satisfy the definition of restrictive agreements,” the appeal court said in the ruling. “Those entries are accordingly grossly inaccurate and give a very misleading impression. In our view the case for their deletion is overwhelming.”
In a statement on its website, the legal team at Appleby representing Dart said that the appeal court’s decision “addresses a number of fundamental aspects of Cayman property law”.
“By giving primacy to commercial certainty, CICA judgment marks the reversal of a decision that created potentially impracticable consequences for the future use of the Land,” Appleby said. “On the Grand Court’s reasoning, the golf course land at Britannia could only be used to play golf by the Owners, but there was no requirement for the Dart Companies to maintain it as such and it could not be modified to any alternative use.”
CNS reached out to representatives of Britannia and their legal team at Walkers, who told us that they are considering the decision. “The Britannia proprietors note the judgment of the Court of Appeal, which openly acknowledged its profoundly negative and most unfortunate consequences. They are collectively considering the options open to them, including a further appeal,” Walkers stated.
See the full judgment in the CNS Library.
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