Dart wins appeal over Hyatt beach and golf course rights

The Dart group has won its appeal against a judgment requiring it to provide beach club and golf course access to neighbouring property owners as a condition of its purchase of a suite of resort properties including the old Hyatt hotel and the Britannia golf course.

The decision means restrictions, which effectively prevented Dart from building on the site, will be lifted and the landowner will be free to develop the area as it sees fit.

The golf course has already been closed and has fallen into disrepair. The Hyatt has been an empty shell since Hurricane Ivan in 2004.

It is not yet clear what plans Cayman’s largest private landowner has for the substantial oceanside site, which it bought in 2016. But the decision, which could yet be appealed, could unlock the development potential of the site.

The long-running dispute with property owners in the neighbouring Britannia Estates, who had existing rights to use the sports and recreation facilities, stemming from agreements with the original resort, had to be resolved before any future plans could be considered.

Reversing an earlier court decision, the Court of Appeal ruled Tuesday that those rights had been incorrectly registered and should be deleted from the Land Registry.

The panel of judges acknowledged this decision would have “a profoundly negative impact” on some 193 property owners who had “paid a premium price” for their homes on the basis that certain rights, including access to the golf course, would be protected.

However the justices said the rights, as registered, couldn’t prevent the landowner from building on the golf course.

They concluded that this was the result of an error in the legal mechanism chosen to protect those rights when they were first registered.

“The die was therefore cast at the very moment that the requested entries were recorded in the register, and it is most unfortunate that the proprietors must bear the consequences of the mistaken selection of this defective mechanism for the protection of the rights,” they wrote.

Their decision overturns an earlier judgment of the Grand Court, which had ruled that Dart did inherit the obligation agreed by the previous landowner to provide access to those facilities.

In that ruling, Justice Segal ordered that the Land Registry be rectified so those rights were registered as “easements”.

But the Court of Appeal concluded that it was not appropriate to retrospectively rectify the register in this way.

A windfall for Dart?

Lawyers for the Britannia property owners argued before the Court of Appeal that the original decision should be upheld.

They argued that deleting the rights completely, as Dart requested, would be unjust, given that they had relied on those rights for almost 30 years.

They further argued that Dart would “make an unjustified windfall” because the price they paid for the land was likely reduced because of the belief, albeit mistaken, that it was protected by entries in the Land Registry which would restrict development.

“The cancellation of those entries will unlock or enhance development value in the properties, particularly for the Dart Group, with its Camana Bay development close by,” the homeowners argued in their submissions to the Court of Appeal.

Rights improperly registered

Despite those considerations, the Court of Appeal justices said the rights were improperly registered and failed to satisfy the legal definition of “restrictive agreements”.

“Those entries are accordingly grossly inaccurate and give a very misleading impression. In our view the case for their deletion is overwhelming,” they wrote.

The judgment goes on to opine that the integrity of entries into the Land Registry is important for “commercial certainty”.

“The whole point of the system created by the [Registered Land Act] was that entitlement to land and related interests therein are to be determined by entries in the register and that people should be able to rely on the entries to determine and vindicate their real property interests.”

The Dart group, in a press release Tuesday, described the ruling as an “important decision for certainty of title in respect of land in Cayman that is governed by the Registered Land Act”.

The dispute may not be over yet, though. The Britannia owners can appeal to the Privy Council.

In a statement through their lawyers Monday, they said “The Britannia proprietors note the judgment of the Court of Appeal, which openly acknowledged its profoundly negative and most unfortunate consequences. They are collectively considering the options open to them, including a further appeal.”