The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The judicial system’s highest court yesterday voiced “dismay” that a Bahamian KC and her attorney husband have “withheld a substantial sum” due to a Nassau Street condo complex that has accrued over 25 years.

The Privy Council, in rejecting the final appeal by Krystal Rolle KC and her husband, Wallace, ruled it was “unwise” for the couple to have represented themselves in the 20-year legal battle with the Town Court condominium complex’s management association as their arguments were “wholly without legal substance” and “incapable of being argued” had they not been attorneys.

And the five UK law lords, in a unanimous verdict, also determined that the couple must pay the legal costs incurred by Town Court at every stage and hearing during its progress through the Bahamian legal system “to reflect [our] opinion of their conduct”. The Privy Council’s ruling that the costs be “assessed on an indemnity basis” means that the Rolles must pay more than normally would be the standard in such a case.

Tribune Business was unable to reach the couple for comment before press time last night. Their listed office phone number was said to be ‘out of order’ when called, and an e-mail sent to their address did not receive a response.

Detailing the background to the dispute, the Privy Council judgment noted: “In 2001 the appellants, Wallace I Rolle and Krystal D Rolle, purchased a condominium unit in the Town Court condominium, a property comprising 65 units located on Nassau Street, New Providence, The Bahamas. It was never the appellants’ intention to live there themselves.

“They acquired the unit to let to tenants for the purpose of generating rental income. The appellants enjoyed such rental income in the following years without the inconvenience of having their profits reduced by contributions to the common expenses of the property. This was because the appellants refused to pay such contributions. They asserted that they had no legal obligation to do so.

“That might seem an improbable, if not reprehensible, position to adopt. But, as the appellants informed the court in their opening written submissions at the trial, they are both lawyers and “as counsel and attorneys at law have legal knowledge which the other unit owners may not possess’,” the Privy Council said.

“That legal knowledge led them to conclude that the owners of the condominium units had no power to delegate their duties to manage, maintain and operate the property to a managing agent. The agreement by which a managing agent had been appointed was accordingly, in the pleonastic phrase that some lawyers like to use, ‘null, void and of no legal effect’.

“So too, therefore, was every act done by the managing agent pursuant to that agreement, including every demand made on the appellants for payment of contributions to the costs of maintaining and insuring the building and other common expenses. Hence nothing was legally due from the appellants.

“For good measure, the appellants gave as a further reason why the agreement with the managing agent was a nullity the fact that the unit owners as a body were misdescribed in the agreement as ‘Town Court Condominium Association’, when they should have been described as ‘the Town Court Management Company’. Points based on misnomers in statements of account issued to the appellants were also taken.”

Real Estate International was the agent hired to manage the Town Court condo complex on the management association’s behalf. The Rolles launched legal action against the condo association more than two decades ago in January 2005, seeking a Supreme Court declaration that “the demands made on them for contributions to the common expenses of the property were invalid”. The sun in dispute ultimately hit $222,302.

“What is more, they said that it was in fact the respondent who owed money to them,” the Privy Council recorded. “They averred that the respondent, although in their case precluded from using a managing agent to perform this duty, had a duty to keep the common property in good repair, of which it was in breach.

“This had resulted in a leak of water into the appellants’ unit from the floor above, which the appellants had paid a plumber to fix at a cost of $5,946. The appellants also alleged that they had had difficulties in finding and retaining tenants because of the poor state of repair of the property, depriving them of rental income. They claimed that the respondent was liable to compensate them by paying damages for these losses.”

The Privy Council noted that the outstanding sum claimed by the Town Court management association hit $118,658 a October 2024, before increasing further to the $222,302 five years later in October 2019. “Why the action took 16 years to come to trial, in February 2021, has not been explained,” the Privy Council said.

“Certainly, the delay did not advantage the other unit owners, who throughout this time were compelled to fund the appellants’ share as well as their own shares of the common expenses. Lest it be thought that they were seeking to avoid their financial responsibilities, the appellants emphasised in their submissions at the trial that it was only the costs of employing the managing agent to which they were in principle unwilling to contribute.

“They accepted that they would be liable to pay contributions to the common expenses if valid demands for such contributions were made by the respondent that did not include the managing agent’s fees. This acceptance, however, has never been reflected in any actual payment of money by the appellants. They say that this is because they do not know the exact amounts referable to the managing agent’s fees and, until they do, they are entitled to pay nothing at all.”

Sir Ian Winder, the chief justice, on April 8, 2022, upheld the couple’s claim for the plumbing repair costs and awarded them $20,000 for the resulting loss of rental income. “But he rejected their other claims, finding that the appointment of the managing agent was valid and that demands for contributions issued by the managing agent were therefore also valid,” the Privy Council said.

“The judge accepted that there were some discrepancies in the accounting information provided by the respondent, and directed the respondent to make a proper accounting of the charges levied on the appellants in the relevant period.

“He said that upon the provision of the accounting the appellants ‘will be required to make payment thereon’. He invited the parties to agree the terms of an Order, failing which the judge said that he would settle it himself. The Board has been told that this was, however, never done.”

The Court of Appeal “unanimously dismissed” the couple’s appeal but, “undaunted’, they appealed again to the Privy Council with Mrs Rolle representing them as lead attorney. The Privy Council said the only issue left for it to address was whether Town Court “has the power to delegate its functions of managing, maintaining and operating the condominium to a managing agent”.

Clause 17 of Town Court’s declaration of condominium gave it “the power to delegate all or any of its powers and duties to any company firm or person of its choice”, and the Privy Council found that “no one can reasonably doubt what” it means.

But Mrs Rolle argued that it was “null and void as being ultra vires” the Law of Property and Conveyancing Condominium Act and the bye-laws that governed Town Court’s operation. She cited “inconsistency” between the Act and Town Court’s declaration of condominium, pointing to three such instances. However, none impressed the Privy Council;

“Despite the forcefulness with which the arguments in support of the main ground of the appeal were advanced, they did not withstand the slightest scrutiny,” the Privy Council ruled. “The Board therefore did not find it necessary to call on counsel for the respondent [Khalil Parker KC] to reply to them.

“The appellants’ assertion that the respondent did not have power to appoint a managing agent, and further assertions of legal invalidity based on that premise, are directly contrary to the clear wording of the governing instruments.

“It follows that, in failing and refusing to pay the managing agent’s fees, let alone the other elements of the contributions levied by the respondent, the appellants have been acting unlawfully for the past 25 years, in manifest breach of their obligations under section 18 of the Act.”

And, in dismissing the Rolles’ appeal, the Privy Council ruled: “Members of the Board also wish to record their dismay that the appellants have withheld a substantial sum of money due to the respondent for an inordinate period of time - 25 years since the arrears began to accrue - on grounds which were so wholly without legal substance.

“Had the assertions of legal invalidity made on this appeal, as well as in two courts below, not been made and maintained by lawyers unwise enough to act in their own cause, the Board would not have thought them capable of being argued.

“To reflect its opinion of their conduct, the Board proposes to direct that the appellants must pay the respondent’s costs of the appeal and of the proceedings in the courts below, to be assessed on the indemnity basis, unless the appellants show good reason why such an Order should not be made in written submissions filed within 21 days of the date of promulgation of this judgment.”