Bib Property Owners Association, Inc. v Better in Belize Ltd

• Jurisdiction: Belize
• Judge: Alexander, J.
• Judgment Date: 15 August 2024
• Docket Number: CLAIM No. CV656 of 2022 (No. 2)
• Court: Supreme Court (Belize)

BETWEEN:

[1] Bib Property Owners Association, Inc.

Claimant/Respondent

and

[1] Better In Belize Ltd.

[2] Better In Belize Homeowners Association Ltd

Defendants/Applicants

CLAIM No. CV656 of 2022 (No. 2)

IN THE SENIOR COURTS OF BELIZE

IN THE HIGH COURT OF BELIZE

Interim Injunction — Serious Issue to be Tried — Covenants, Conditions and Restrictions (CCRs) for Gated Community — Community Maintenance Fees — Whether Maintenance Fees Can be Used for Legal Fees and Insurance Premiums for Board Members — Balance of Convenience — Damages as Adequate Remedy.

Appearances:

Mr. Joseph Danilczyk and Ms. Rachel Montejo for the Claimant/Respondent

Mr. Hubert Elrington SC and Mr. Orson J. Elrington for the Defendants/Applicants

RULING

Alexander, J.

1 The present application is the latest in a series of applications by both sides in this matter. The application is for an interim injunction against the claimant.

2 The applicants are the defendants, Better In Belize Ltd. and Better In Belize Homeowners Association Ltd. (“the defendants/applicants”). An interim injunction was previously granted by this court against the defendants/applicants and, having not been discharged or discontinued, it remains in existence.

3 The present application came after the defendants/applicants obtained a security for costs order against the claimant on 16 ^th April 2024. The present application aimed at addressing how the community maintenance fees, now being collected by the claimant, are to be used. By this application, the defendants/applicants ask the court to restrain the claimant from using community maintenance fees to cover allegedly “unauthorized” expenses.

4 The unauthorized expenses include payment of the security for costs order made on 16 ^th April 2024, payment of other expenses incurred by the ongoing lawsuit, and payment of insurance premiums for directors. The defendants/applicants seek, therefore, to inhibit the use of community maintenance fees for any purpose other than those expressly stated in the Covenants, Conditions and Restrictions (“CCRs”).

5 Given the above, the resolution of the current application lies squarely on the CCRs, and the interpretation of that document, specifically as to how residents' monies are to be applied in the community's interest. The interpretation of the CCRs is also a major issue in the substantive claim.

6 At its core, the present application alleges that residents' monies are being misused or applied towards unlawful or inappropriate expenses. The defendants/applicants want to stop this from continuing to happen until the substantive matter before the court is fully ventilated. At first blush, it appears that the application is for legitimate and valid purposes and goes to the financial root of the practices of the claimant. Granting the order would likely protect the “unauthorized” depletion of community financial resources, if abuse is occurring.

7 Having considered the application and submissions by counsel, however, I am not satisfied that this is a case that warrants the grant of injunctive relief.

8 I find that there is no sufficient evidence before me that shows that the community maintenance fees are being misappropriated and/or applied outside the confines of the CCRs such as to require the urgent intervention of the court at this stage. If granted, the order would stymie the management of the community's finances and its day-to-day operations. Therefore, the balance of convenience lies with the claimant, the body charged with the responsibility for maintaining and operating the community. I was also not convinced that damages would be an inadequate remedy to compensate the defendants/applicants for any likely losses they will suffer should they be successful at the trial.

9 I refuse the injunction and order parties to bear their own costs.

Background

10 On 07 ^th November 2023, this court granted an injunction against the defendants/applicants to prevent their unlawful acts of interfering with the claimant's operations; and/or to stop them from undermining, vandalizing and destroying the claimant's properties, facilities and infrastructure (“the previous injunction”). Because of the nature of the reliefs sought in the previous injunction and the evidence, it was considered urgent that the court intervened to maintain the status quo in the Better in Belize Community (“the BIB community”) so that the substantive claim could proceed unhindered.

11 Unfortunately, tempers have not cooled, and relations in the BIB community remain heated, causing parties to come running to the court yet again for its intervention. The acrimonious relations are clearly seen since, after I granted the previous injunction, at least three other applications were filed by parties inclusive of the instant application.

12 On 16 ^th April 2024, I granted a security for costs order, requiring the claimant to pay BZ$40,000 on/or before 5 ^th July 2024 or the claim will be struck out. On the same 16 ^th April 2024, an application for committal of Mr. Walter Browning, principal of the first defendant (or director), which was also listed for hearing, was adjourned to a date after the satisfaction of the security for costs order.

13 On 19 ^th April, the instant application was filed to prevent the use of the maintenance fees for payment of the security for costs order. It appears that by the time this inter partes injunction was heard, the claimant had already satisfied the security for costs order, using the community maintenance fees. It is this use of the fees, paid by residents to maintain their community for funding of this lawsuit, in particular, that is stiffly opposed by the defendants/applicants.

14 When the applications came up for hearing on 13 ^th June 2024, counsel for the defendants/applicants, Mr. O.J. Elrington, made compelling arguments that the present application must be disposed of before the committal proceedings. Mr. Danilczyk held an opposing view, stating that the security for costs order was already satisfied and that the CCRs were being put to proper use. He pressed the court to deal with the committal application instead of the present application. I did not find favour with the arguments as advanced by Mr. Danilczyk, though I commend learned counsel for his sage oral submissions, which assisted me in disposing of this matter.

15 Given the continuing volatile and tense relations in the BIB community, however, I felt that I needed to consider the context of and dispose of the present application in priority to the committal proceedings. Therefore, I acceded to the arguments of Mr. O.J. Elrington, which I found as a reasonable request to interrogate, in a preliminary way, how residents' funds are being used by the claimant. Having determined the order in which the outstanding applications would be disposed of, I turn to the present application but must comment as follows.

16 The several applications in this matter have retarded its progress through the system. The approach of both parties is to use these various applications as a litigation strategy, which effectively has impeded the progress of this case towards trial. Despite giving case management orders on 5 ^th June 2023, a pre-trial hearing is yet to be convened as the court must dispose of the various applications before parties could be readied for trial. This approach to litigation is most unfortunate. It works contrary to the overriding objective and against the interest of litigants. It does not help that both counsel engage unnecessarily in censuring each other for stalling the litigation by the filing of these several applications. Both counsel must own this approach, which is against the best uses of the court's time and resources and serves only to delay the actual litigation.

17 The present application brings in sharp focus the 2016 Agreement, which forms a major part, if not the nucleic, of the substantive claim and the counterclaim. I do not propose by this ruling, therefore, to deal in any in-depth way with the 2016 Agreement or the CCRs that form a part of it. My resort to the CCRs will be only for the limited purpose of disposing of the specific issue raised in the present application.

The 2016 Agreement

18 The 2016 Agreement consists of the CCRs governing the BIB community and a document called the ‘Assignment of Authority and Responsibility’ (together ‘the 2016 Agreement’). Therefore, it is the operations agreement that guides how things are to function in the BIB community.

19 In keeping with the 2016 Agreement, the first applicant/defendant had negotiated, sold and then transferred to the claimant the infrastructure in the BIB community between 2016-2017. This included the community's communications (internet) tower, buildings, solar power system, equipment and machinery necessary for the claimant to function and carry out its responsibilities. The 2016 Agreement also contains terms and conditions or the CCRs, to guide how the parties should function or run the BIB community. It is a central governing document.

20 As stated above, the 2016 Agreement is at the core of the substantive claim and counterclaim before this court. A determination of all issues related to this document is reserved for the trial.

The Counterclaim

21 The counterclaim was filed on 3 ^rd January 2023. Because of the reliefs sought in the counterclaim, I will address it briefly. The reasons for doing so are obvious from the paragraphs below.

22 By its counterclaim, the defendants/applicants seek an order for the return of community funds, received by the claimant for the maintenance and upkeep of the BIB community, that have been and are being used for unauthorized and unlawful purposes.

23 The defendants/applicants also counterclaimed for a declaration that they are entitled to possession of the subdivision, an injunction prohibiting the claimant from accessing...