CMK BWI Ltd and 7 others v Attorney General of the Turks and Caicos Islands (on behalf of the Crown and Government of the Turks and Caicos Islands) (Turks and Caicos Islands)

The decisive question is whether a post-commencement amendment objectively creates new obligations, not whether the parties call it a variation or rescission. Under the Crown Land Ordinance 2012, a substantial alteration to a pre-existing commitment to allocate and dispose of Crown land may constitute a new allocation and disposition subject to the Ordinance.

The presumption against retrospectivity protects unchanged pre-commencement transactions and minor amendments where applying the Ordinance would be unfair. It does not allow parties to evade the statutory regime by making substantial contractual changes. A proposed commercial lease inconsistent with the required process and market-value rules is beyond the public authority’s powers.

The Developers agreed with the Turks and Caicos Islands Government in 2008 to undertake a development in South Caicos. In return for specified Island Improvements and proof of US$2 million expenditure, the Crown was to grant a 49-year lease of identified parcels at a peppercorn rent.

A 2013 amended and restated agreement removed the expenditure obligation, altered the trigger for the lease, extended its term to 999 years and added a further parcel. The Crown Land Ordinance 2012, which had come into force in 2012, imposed requirements for commercial Crown land disposals. The Government refused to grant the lease.

The Supreme Court dismissed the claim. The Court of Appeal dismissed the appeal, holding that the 2008 agreement had been varied rather than rescinded. The central issue before the Board was whether the 2013 amendments were sufficiently substantial to constitute a new allocation and disposition caught by the Ordinance.

Appeal dismissed unanimously.

1. The Board accepted, as an ancillary point, that under the 2008 agreement proof of US$2 million expenditure was a condition of performance of the Government’s obligation to grant the lease, rather than a condition of the obligation’s existence. That conclusion was expressly not determinative.
2. The legal effect of the 2013 agreement depended on the substance of the alterations, assessed objectively. The distinction between variation and rescission was not decisive. Otherwise, parties could avoid the statutory regime by varying an earlier agreement instead of replacing it.
3. The amendments were substantial. The Developers no longer had to carry out the Island Improvements or spend US$2 million. The lease obligation was triggered by notice and related preparatory steps. The lease term changed from 49 years to 999 years, an additional parcel was included, and the practical commencement date changed. The original terms were replaced and new obligations arose.
4. The Crown Land Ordinance 2012 was to be interpreted according to ordinary meaning, statutory context and legislative purpose, subject to the presumption against retrospectivity. An unchanged pre-Ordinance agreement, and potentially a minor amendment where retrospective application would be unfair, would not ordinarily be caught without clear language. Substantial amendments creating a different allocation and disposition were different.
5. The 2013 agreement therefore created a new allocation and disposition of Crown land after the Ordinance had commenced. The lease provisions did not satisfy the Ordinance’s requirements for commercial Crown land, including the prescribed process and market-value requirements, and were ultra vires the Government’s powers. The Board advised His Majesty that the appeal should be dismissed.

• Privy Council: Appeal from the Court of Appeal of the Turks and Caicos Islands dismissed unanimously.
• Court of Appeal of the Turks and Caicos Islands: Appeal dismissed. The 2008 agreement had been varied, not rescinded, but the statutory regime prevented enforcement of the amended lease arrangement.
• Supreme Court of the Turks and Caicos Islands: Claim dismissed with costs. The 2013 agreement was within the scope of the Crown Land Ordinance 2012 and the Government could not perform the lease obligation as agreed.