The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The “warring groups” at a Freeport condominium complex were yesterday sent back to the Court of Appeal, after the Privy Council dismissed as “meritless” a previous verdict that rendered key court Orders invalid.

The UK-based court, the highest in the Bahamian Judicial system, overturned an earlier Court of Appeal verdict that found two Supreme Court Orders were a “nullity” because the original action was brought against a non-existent company.

A group of owners, headed by Apollon Metaxides, had settled their action against Silver Point Condominium Apartments (SPCA), the governing body for the condo complex, via a series of consent Orders and agreements in 2009 and 2010.

However, another group of Silver Point owners, headed by Johann Swart, then launched their own proceedings against the Metaxides group and SPCA, arguing that their settlement was invalid and attempting to have it set aside via the Supreme Court.

One of the ground advanced by the Swart group, according to the Privy Council judgment, was that the consent orders (and overall settlement) were “a nullity” because the Metaxides action had been launched against Silver Point Ltd, a non-existent company.

It should have been brought against SPCA, as the body corporate, and the Swart group alleged that the Metaxides action was never properly amended to list it as a defendant.

Referring to the initial Supreme Court ruling by then-justice, Hartman Longley, the Privy Council said of the ‘nullity’ argument: “The judge made short shrift of this point, saying that the action had proceeded on the basis that the proper parties were before the court, that an application to set aside an irregularity should be made within a reasonable time, and that there was no merit in the submission advanced.

“The Swart group appealed on numerous grounds. It is questionable whether their notice of appeal embraced the point that the Metaxides action was invalidly constituted, but the argument was advanced at the hearing of the appeal before the Court of Appeal.”

While a company called Silver Point Ltd was the original developer for the Silver Point Condominium Apartments in the 1960s, it had ceased to exist by the time the Metaxides group launched its action.

Nor did Silver Point Ltd have responsibility for the complex’s management and operation, which was the preserve of SPCA.

“The background to the litigation was that the Metaxides group had fallen out with some other unit owners and the Board over a number of issues, including whether unit owners should be permitted to replace the original windows and doors with others which did not match them in colour and construction,” the Privy Council recorded.

“An annual general meeting was scheduled to take place on the afternoon of Saturday, January 14, 2006, at which it was anticipated that there would or might be a decision about alterations.”

This was pre-empted by Mr Metaxides and his group launching their legal action three days earlier, with Silver Point Ltd named as the defendant.

Their attorney, Edwin Knowles, then appeared before Justice Carroll on January 13, 2006, with an amended originating summons naming the defendant as ‘Silver Point Ltd (Silver Point Condominium Apartments)”.

“The judge’s note records that Mr Knowles said that he was not certain who was the correct defendant, and so he had named both [Silver Point Ltd and SPCA] ‘to ensure he gets the right one’,” the Privy Council said.

The Metaxides group received their injunction preventing the SPCA AGM from taking a decision to replace outer doors and windows with non-compliant materials, and the amended summons was filed with the court.

An ‘appearance’ was entered by attorneys for SPCA two weeks’ later, and the Privy Council said both sides and the Supreme Court proceeded as if it was the defendant.

Two affidavits were sworn to that effect by SPCA Board members, while the parties to the consent Orders that settled the action were the Metaxides group and SPCA.

“Despite the skilful and tenacious advocacy of Fred Smith QC on behalf of the Swart group, the Board is in no doubt that Justice Longley was right to regard the submission that the consent orders were a nullity as meritless for the reasons which he gave,” the Privy Council ruled.

It found that the Court of Appeal based its ‘nullity’ verdict on the wrong case law, adding that the SPCA case was “quite different”.

“The consent orders were founded on agreements between parties which existed, and which had invoked or submitted to the court’s jurisdiction,” the Privy Council said yesterday.

Turning to Mr Smith’s arguments, it added: “It is argued that those Orders should nevertheless be set aside because the defendant was named in the (unamended) originating summons as Silver Point Ltd and, it is said, because the originating summons was not effectually amended.”

Dismissing this, the Privy Council said it was “obvious” that the Metaxides group’s action was against the body responsible for the condo complex, SPCA.

While the first originating summons was “a misnomer”, and the amended version created “confusion or uncertainty”, these issues were “inconsequential” because SPCA had recognised itself as the defendant by participating in the proceedings.

“The Swart group has no right to have set aside a consent order validly made between the parties to it,” the Privy Council ruled, adding that the Metaxides Order was not binding on non-parties to the dispute.

“It is possible that the Swart group may be bound by the agreement made between SPCA and the Metaxides group by reason of section 14 of the [Condominium] Act, but that is a different issue,” it added.

“In the Swart action, the Swart group claims that in entering into the amended settlement agreement and amended consent order action, SPCA acted ultra vires the Act, the [condominium] declaration and the bylaws.”

Justice Longley had also rejected this claim, but the Court of Appeal has yet to hear the Swart group’s appeal on this matter. This is where all parties have now been sent by the Privy Council.

“In short, the determination either way of the [nullity] issue.... was not going to resolve the issue whether SPCA acted ultra vires in entering into the settlement agreement,” the Privy Council ruled.

SPCA was represented before the Privy Council by Bahamian attorney Gail Lockhart-Charles. And the Metaxides group was looked after by Christopher Maynard and Mr Knowles.