International Conflicts of Jurisdiction

• Pages: 91-98

Page 91

This unnecessarily complicated case before the Privy Council deals with a sale of Bahamas real property under a court order. The property in question is a one-story residence on a plot of land known as Lot 32, North Cat Cay. Though in a desirable location, the house is in a poor state of repair and seems to have been empty for long periods.

Part of the difficulty is that although the litigation has so far produced seven orders (some interlocutory and some fi nal) made by Bahamas fi rst instance Judge Lyons, it was only at the hearing leading up to Order (6) that the judge heard oral evidence from deponents followed by cross-examination.

Another complication has been the concurrent Florida bankruptcy litigation involving Mr. James F. Walker, one of the Petitioners, initially with questionable regard to the principles of international comity.

The first 5 orders include Order (1) of September 3, 2002 for the sale of Lot 32 (then owned by the bankrupt and his wife) to Susan Lundborg (Respondent); Order (2) of July 7, 2003 that the parties complete the sale within 14 days; Order (3) of July 21, 2003 (not in the record) embodying an undertaking that Respondent would not proceed pending an application for a stay of the order for sale made by Mr. Walker's Florida trustee in bankruptcy; Order (4) of March 23, 2004 allowing Respondent's intervention and rejecting the trustee's application for a stay; and Order (5) dated July 26, 2004 and applied for by Mrs. Walker which stayed the order for sale until the court could resolve the disputed issues by cross-examining the deponents.

Two more orders need consideration: Order (6) of December 7, 2004 (after the lower court had heard some oral evidence) setting aside the order for sale; and Order (7) dated February 28, 2005 setting aside a money judgment which a bankruptcy Plaintiff, Eleanor C. Cole, had obtained against Mr. Walker in the Supreme Court of the Bahamas on December 3, 1996, which purported to enforce an earlier Florida judgment against the bankrupt.

The Petitioners' appeal to the Judicial Board of the Privy Council is from a November 15, 2005 order of the Bahamas' Court of Appeal It set aside Orders (6) and (7). The Board has to resolve the appeal based on the points at issue, and, incomplete as they are, on Judge Lyons fi ndings of fact.

Plaintiff , the Petitioners and the Respondent are all U.S. citizens living in Florida. The Petitioners, however, at one time did reside in the Bahamas. In 1983, they bought Lot 32 as joint tenants. They immediately mortgaged it back to the previous owners and have since paid off that mortgage.

In October 1990, Plaintiff sued Mr. Walker in the Bahamas' court to enforce a November 1989 Florida judgment for about $300,000 which she had gotten against him. Mr. Walker had entered an unconditional appearance and the court had given summary judgment against him in April 1991. A month later, however, he got an order setting aside the judgment on the ground that he was challenging the original Florida judgment. Five years went by but the Florida judgment technically remained in eff ect. On December 3, 1996, Plaintiff again obtained summary judgment in her enforcement proceedings in the Bahamas.

Under § 63 of the Supreme Court Act, this judgment placed an enforceable equitable charge on Mr. Walker's interest in Lot 32. The charge did not aff ect Mrs. Walker's interest, but it did enable Plaintiff to apply to the court under Order 31 of the Supreme Court Rules for an order to sell all the interests in Lot 32. This charging order severed the joint tenancy. Half the net proceeds would go to Mrs. Walker and the court would have applied the other half to satisfy Plaintiff's judgment debt.

Page 92

There was then a further delay before Plaintiff 's attorneys, Callenders & Co. of Nassau, took steps to enforce the equitable charge. Plaintiff 's attorneys obtained a professional appraisal in June 1997 that valued Lot 32 at $326,250. On June 18, 1999 they fi nally sought an order for sale. Those are the proceedings in which the lower court made all but the last of the seven orders; the court issued Order (7) in Proceedings 1355 of 1990. When the Court exercises its power to order a sale, the usual course is to make an order in general terms, entrusting the conduct of the sale to a specified party, and giving general directions as to the manner of sale (e.g. by public auction or private treaty), the minimum price, and so on. That was the relief Plaintiff sought by the originating summons with Petitioners as the original defendants, and former owner Mrs. Kraff t Keims, now a widow, added as a third defendant in June 1999.

On August 18, 1999, Sidney Collie, a Nassau attorney, entered an appearance for Petitioners through Gary Rotella, a Florida attorney, whom Mr. Walker had instructed; the three of them met at Rotella's office in Fort Lauderdale on August 14, 1999. Mr. Walker asked Collie to act for both Petitioners. Collie's evidence, which the judge accepted, was that his only contact was with Mr. Walker (and not his wife) and even those contacts were few and far between.

The rest of 1999, the whole of 2000 and most of 2001 went by without any progress. Plaintiff 's Nassau attorney, a Mr. Turnquest of the Callenders fi rm, wrote to her on July 31, 2001 apologising for the delay. His letter stated that he did not think that another appraisal of the property was necessary.

Plaintiff (who was by this time an elderly lady in poor health) fi nally swore her fi rst affidavit in support of the originating summons on January 9, 2002. Plaintiff 's affidavit averred that Respondent, who lived in Florida, had gotten in touch with her and said she was interested in buying Lot 32. On January 27, 2002, Respondent sent Plaintiff a document described as a "letter of intent" for the sale and purchase of the property for $400,000. Plaintiff seemed, initially at least, to have been grateful to Respondent for her intervention.

During the summer of 2002, there was renewed contact between the bankrupt and Collie. The bankrupt seems to have found out about Respondent's interest in the property and about the prospect of the originating summons eventually coming before the court. The trial court heard the originating summons on the afternoon of September 3, 2002. That morning, Saunders, a Nassau attorney, swore out an affidavit exhibiting the fi ve-year-old appraisal. In his fi rst affidavit, he asked the court to set a reserve price of $326,250.

Mr. Saunders then swore to a second affidavit, the text of which in part was as follows: "1. I am authorised by the Plaintiff ... [to present] to this Honourable Court ... a bona fi de off er to purchase [Lot 32 by "private contract"], the Plaintiff being resident out of the Bahamas in the State of Florida...