Henderson J
IN THE GRAND COURT OF THE CAYMAN ISLANDS
HOLDEN AT GEORGE TOWN, GRAND CAYMAN
CAUSE NO. 367 OF 2004
BETWEEN: REDWOOD HOTEL INVESTMENT CORP.
PLAINTIFF - APPLICANT
AND: CONDOCO GRAND CAYMAN RESORT LTD.
DEFENDANT - RESPONDENT
Appearances: Mr. J. Malins Q.C. instructed by Kyle Broadhurst of Broadhurst Barristers for the Plaintiff – Applicant
Mr. Jeremy Walton of Appleby Spurling Hunter For the Defendant – Respondent
Before: The Hon. Justice Henderson
Heard: January 26, 2005
RULING
The plaintiff, Redwood Hotel Investment Corporation, asks for summary judgment on an alleged contractual obligation on the part of the defendant, Condoco Grand Cayman Resort Ltd., to convey to the plaintiff, as part of an apartment, a terrace with no covering over any part of it.
The parties entered into an agreement for the purchase and sale of an apartment in the Ritz Carlton development on Grand Cayman Island at a time when construction had not started and the final architectural drawings were not yet in place. The contract of purchase and sale contains, in the parcel clause, this language:
"Therefore the purchaser has agreed to purchase and the vendor has agreed to sell a strata lot, being that certain condominium apartment, hereinafter the apartment, in the development to be known as Apartment 411, containing approximately 5490 square feet of livable area including the terraces, the relative layout of which apartment (i.e. unit plan L) is shown on Appendix B attached hereto, and the relative location of which apartment (i.e. the north tower) is shown on Appendix C attached hereto."
The clause goes on to specify the purchase price. Attached as Appendix B to the agreement is a one-page drawing entitled "Appendix B: Relative Layout of the Apartment". The drawing is to scale and shows, in considerable detail, the load-bearing walls, the cabinets, and the presumed location of furniture to be installed, as well as the locations of doors and windows. The area to the front of the apartment is labeled on the diagram as a "terrace." There are load-bearing walls between the terrace and the interior of the apartment shown on the diagram, but on three sides the terrace is not shown as having any load-bearing structures.
In addition, there are no columns or pillars shown anywhere on the terrace portion of the diagram.
In fact, the apartment was constructed with a trellis of some substantial size on the terrace. The intent was to cover the trellis with plants in such a way that most, but not all, of the sunlight (and for that matter the rain) falling on the top of the trellis would be prevented from penetrating.
After some time had passed, the vendor decided to increase the height of the development by two storeys. As a result of that decision the design changed. What has been described in argument as a "large concrete slab" now projects out from the load-bearing walls at the front of the unit several feet onto the terrace. Thus, a portion (but not all) of the terrace is now a covered area.
The plaintiff asserts that the documents to which I have referred provide him with a contractual right to the conveyance of an apartment containing a terrace which is not covered in any part or in any way.
A number of arguments have been advanced, but I need consider only two.
First, the plaintiff argues that the plain and obvious meaning of the word "terrace" is such as to entitle him to an area with no covering between the floor and the sky. Second, the plaintiff argues that the absence of any reference on Appendix B to concrete columns or pillars in the terrace portion of the diagram amounts to a promise that they would not be present.
The plaintiff is entitled to summary judgment if (but only if) there is no triable issue raised by the defense. In this context, I must ask: does this plaintiff have a plain and obvious contractual entitlement to a terrace consisting of an area with no overhead covering at all?
I address first the argument based on the plain dictionary meaning of the word "terrace."
The plaintiff cited two dictionary definitions. We find in Websters's Encyclopedic Unabridged Dictionary of the English Language this definition of the word "terrace" (I quote only the relevant parts):
The flat roof of a house. An open, often paved area connected to a house or an apartment house and serving as an outdoor living area; deck. An open platform as projecting from the outside wall of an apartment; a large balcony. A row of houses on or near the top of a slope.
In Collins Concise Dictionary, Third Edition, we find a similar definition, which reads, in part:
"A paved area alongside a building serving partly as a garden. a balcony or patio. A flat roof of a house built in A Spanish or Oriental style."
Two other dictionary definitions were referred to by the defendant. In the Merriam Webster Online Dictionary part of the definition of the word "terrace" reads:
(a) a columnated porch or promenade;
(b) a flat roof or open platform;
(c) a relatively level paved or planted area adjoining a building.
Finally, the defendant referred to the Compact Edition of the Oxford English Dictionary which, as one would expect, contains the most complete definition and myriad examples. In part, that definition reads:
"a raised level place for walking with a vertical or sloping front or sides faced with masonry, turf, or the like, and sometimes having a balustrade, especially a raised walk in a garden or a level surface formed in front of a house on naturally sloping ground or on the bank of a
river a gallery open on one or both sides, a colonnade, a portico, a balcony on the outside of a building, also a raised platform or balcony in a theatre or the like."
From these definitions it will be seen that while a terrace may often be open to the sky, it is not necessarily so. The definition equates a terrace with a "portico," which is defined elsewhere in the Oxford English Dictionary as a covered space, and to a "balcony" which, it is conceded, is often covered, and to a "porch".
Those dictionary definitions accord with my own general understanding of the current usage of the word. I am entitled to take judicial notice of common English usage. In my experience, the word "terrace" has a relatively broad and general meaning. It frequently refers to an area which is not covered in any way, but not infrequently it refers to an area either partly or even wholly covered. The essential characteristic of a terrace, like a patio, a balcony, or a porch, is that it is open on one or more of its sides to the elements.
That short discourse on the meaning of the word "terrace" dictates the result on the first issue. I am entirely satisfied that there is a triable issue with respect to the semantic arguments which have been advanced.
The plaintiff also relies, as I have said, on what Appendix B shows or, more accurately, fails to show. There are now two hefty cement columns in place on the terrace. I infer from the evidence that each is approximately two feet square.
Can Appendix B have been intended by the parties to this contract as a contractual promise to build an apartment with the precise layout shown? That very question has been addressed by our Court of Appeal, albeit in a different context. At an earlier stage in the rather lengthy and somewhat acrimonious relationship between these parties, the vendor proposed to convey an apartment which was approximately 1000 square feet less, than the 5490 square feet specified in the agreement. The plaintiff sued. The matter reached the Court of Appeal. In granting an order for specific performance to the plaintiff, the Court of Appeal said this about Appendix B (which that court referred to, on some occasions, as Annex B):
"The relevant phrase in the instant contract describing the function of the Annex B plan is 'the relative layout of which apartment ... is shown in Appendix B'. Having regard to this wording, the judge was, in our view, entirely correct to find that its purpose was merely to demonstrate the internal configuration of the apartment and that it was never intended to demonstrate the exact dimensions or to fix the overall square footage of the condominium."
Given the different issue and evidence in the case before me, I do not think I am bound to accept that conclusion without examining it. However, I am in respectful agreement with what the Court of Appeal has said on the subject. Appendix B is specified in the parcel clause as being attached for the purpose of showing the relative layout of the apartment. That phrase is repeated on the Appendix itself. I think one can infer, from the face of the contract and its Appendix that the purpose of the plan is to distinguish the sort of layout that was being conveyed to this purchaser from other layouts in the same development which would be available at different prices. It is the relative layout that the plan is intended to demonstrate and not the actual or precise configuration which will be constructed.
Lewison, on The Interpretation of Contracts, says this at page 349:
"A plan showing a layout of property not yet built will not usually amount to a warranty that the property will be built as shown on the plan."
The author then cites two authorities for that proposition. There will no doubt be exceptions and hence his use of the word "usually".
The present contract contains extensive modification rights reserved to the vendor, including the right to make minor modifications and the right to make major modifications
as long as they do not have a material detrimental effect on the purchaser. From those clauses it is, again, relatively easy to infer that the purpose of Appendix B was not to fix the precise configuration of what was yet to be built, but rather to demonstrate the sort of layout that the purchaser had a right to expect.
Here there is at least a good arguable case that the vendor is not bound to convey an apartment which conforms in every respect to the plan described as Appendix B. Their obligation was to convey an apartment with a relative layout of the sort shown there. It is at least arguable that the vendor's obligation goes no further.
The absence of the concrete pillars, in this context, is of little significance. They are not the sort of structure which would inevitably be placed on a plan designed to show the relative layout of the interior of the apartment. It is at least arguable that the parties would have known and understood and intended that at the time they entered into the contract.
For these reasons the application for summary judgment is dismissed.
[… Submissions regarding costs]
RULING ON COSTS
The question of whether this purchaser has a contractual entitlement to a terrace which is free of any covering is a question of construing the contract and the Appendix. It is a question of mixed law and fact, but there is little in the way of fact that bears on it. I think the defense is in adequate form to give to the plaintiff notice of what the issues will be. I do not think the plaintiff has suffered any prejudice or additional expense arising from the form of the pleading.
Costs must follow the event. I award the defendant its costs.
RULING
The plaintiff has also applied in Cause 721 of 01 for, as the summons puts it, "a direction from the court that the defendant construct the apartment with a terrace as set out in Appendix B of the agreement, that being a terrace without any obstructions or roofing above it or with any support columns, beams or other structures upon it."
The order sought is said to be an entitlement pursuant to the order of the Court of Appeal, dated the 29th November 2002, in which the Court of Appeal ordered that the parties had liberty to apply for such further or other directions as may be necessary "in this matter."
The words "this matter" refer to the dispute about square footage which resulted in the Court of Appeal granting an order for specific performance.
In my view, the liberty to apply contained in their order of November 29th, 2002, was for the purpose of making such ancillary orders as might be necessary to carry out the overall intent and purpose of the Court's original order. I would have no hesitation in granting an ancillary or supplementary order if the subject matter had something to do with square footage. The present dispute, however, is entirely different. I do not think it would be appropriate, in the procedural sense, for me to grant directions in Cause 721 of 01 which have a bearing only on the question of whether a covering may be erected over part of the terrace.
That application also is dismissed.
Dated this 10th day of February, 2005
Henderson J.
Judge of the Grand Court