Belitza Marling Sagaray Silva v Replay Destinations (Bahamas) Ltd

Where a sale contract refers both to illustrative plans and to plans forming part of the registered title, the latter may define the vendor’s obligation to convey legal title if the contractual language gives them that precise and authoritative role. Illustrative plans may identify the property generally and describe construction works without defining the title to be conveyed at completion. A known discrepancy between registered title and the property as constructed does not itself impose an obligation to procure an amended title before completion. Contractual meaning is determined objectively, and post-contract events are irrelevant under the orthodox approach.

The purchaser agreed to buy a penthouse apartment in The Bahamas. The contract referred both to illustrative plans showing the apartment as constructed and to plans attached to the registered condominium declaration, which showed a smaller area. The parties knew of the discrepancy and expected that the declaration might later be amended.

Klein J dismissed the purchaser’s claim on 24 February 2022. A majority of the Court of Appeal upheld that decision, while the President dissented. The purchaser appealed to the Privy Council on contractual construction and sought permission to raise further issues concerning the validity of the declaration, unfair contract terms and specific performance.

The central issue was which plans defined the title the vendor had contracted to convey at completion.

The Board refused permission to introduce the purchaser’s third to sixth grounds of appeal. The proposed issues had not been properly raised below, several required factual investigation and consideration of local law, and the sixth ground depended on a construction argument which failed. The appeal was therefore confined to construction of the contract.

1. Construction of clause 1(a). The contract objectively required the vendor to convey the existing legal title defined by the plans attached to the condominium declaration, rather than an expanded title corresponding to the illustrative Exhibit A plans.

2. Function of Exhibit A. The Exhibit A plans were conceptual, preliminary and illustrative. They identified the apartment generally and identified construction works relevant to the vendor’s warranties. They did not require the vendor to procure amendment of the declaration before completion.

3. Contractual context. The common-property entitlement, provisions contemplating amendment of the declaration, obligations to comply with the declaration, permitted title exceptions and provisions addressing discrepancies in area all supported conveyance of the declaration title at completion. The parties knew of the mismatch and could have required advance amendment, but the contract contained no such obligation.

4. Subsequent events. Events after formation, including steps concerning title insurance and amendment, could not determine the contract’s meaning under the orthodox approach to interpretation.

5. The Board advised His Majesty that the appeal should be dismissed.

• Privy Council: Appeal dismissed. The Board agreed with the first-instance judge and the majority of the Court of Appeal on the construction of the contract.
• Supreme Court of The Bahamas: Klein J dismissed the purchaser’s claim on 24 February 2022.
• Court of Appeal of the Commonwealth of The Bahamas: A majority of Isaacs and Crane-Scott JJA upheld the judgment. The President, Sir Michael Barnett, dissented on the construction of the contract. The additional grounds were rejected because they had not been raised before the judge.