Grenada government loses appeal in Rex Grenadian expropriation case

The Eastern Caribbean Supreme Court of Appeal has dismissed an appeal by the Grenada government against an earlier Supreme Court order of February 22, 2017, temporarily preventing the Keith Mitchell-led administration from taking further steps under the Land Acquisition Act to compulsorily acquire property leased to The Grenadian by Rex Resorts.

The 172-room hotel located on the island’s southern tip, has a 99-year lease of the land in question with the government, with which it is in full compliance but which the government is seeking to terminate unilaterally, and thus effectively expropriate the property.

In its ruling on December 15, the Court of Appeal noted that it is settled law that an appellate court would be weary of interfering with the exercise of discretion by a judge unless it is shown that the judge in exercising his discretion blatantly erred in principle or failed to take into account relevant factors or took into account irrelevant factors, or his decision was so unreasonable that it exceeded the generous ambit within which disagreement is permissible.

The Justices of Appeal said that in considering an application for an interim injunction in which there is a public law element in issue, in determining where the balance of justice lies, the court has a wide discretion to take the course that seems most likely to minimise the risk of an unjust result.

In this case, while a public authority acting within the law should be permitted to exercise its functions and duties for the benefit of the public, having regard to the circumstances of this case, the judge in exercising his discretion correctly applied the relevant principles.

“He (the judge) took into account the relevant matters and did not take into account irrelevant matters. There is therefore no basis to interfere with the exercise of his discretion”, the appeal court said.

The Court of Appeal accordingly dismissed the government’s application and awarded costs to the Rex Grenadian hotel.

“We welcome the court’s decision and remain committed to providing first-rate service and accommodation to our guests in the months and years to come,” a Rex Resorts spokesperson said following the most recent ruling.

As a public service, THE NEW TODAY reproduces an edited version of the ruling handed down by the three-member panel of Court of Appeal Justices: Mde.Louise Blenman, Mario Michel and Mde. Gertel Thom:

Mr. Thomas Astaphan, QC, with him Dwight Horsford, Solicitor-General and Maurissa Johnson for the Applicants (The State).

John Carrington, QC, with him Dickon Mitchell and Skeeta Chitan for the Respondent (Rex Grenadian).

Civil Appeal – Application to set aside the decision of a single judge – Land acquisition proceedings – Public law element in proceedings – Whether the learned single judge erred in the exercise of his discretion in making the conservatory order – Rights of the Crown to land acquisition pursuant to the Land Acquisition Act Cap. 159, Revised Laws of Grenada 2010

The Grenadian Hotel obtained a 99-year lease on 30 acres of land from the Grenadian Government (“the Government”) in 1991. In February 2016, the Government sought to acquire the leasehold interest of the land pursuant to the Land Acquisition Act by publishing a declaration for acquisition in the Gazette.

On 17th March 2016, the Grenadian Hotel sought and obtained leave of the court to bring judicial review proceedings. Wallbank J granted an interim injunction against the Government prohibiting further publications in the Gazette of the declaration for acquisition of the Grenadian Hotel’s interest in the property.

Adrien-Roberts J heard the claim for judicial review and on 20th December 2016 she quashed the decision of the Government to publish the declaration and granted a permanent injunction preventing the Government from breaching the covenant for quiet enjoyment outlined in clause 3(1) of the lease.

The judge however refused to grant the following additional reliefs:

(i) an order of prohibition against the Government from compulsorily acquiring the Grenadian Hotel’s interest in the property and its hotel business and

(ii) a permanent injunction preventing the Government from derogating from the grant created under the terms of the lease.

During the period 20th December to 6th January 2017, the Government made three further publications of a

declaration to acquire the Grenadian Hotel’s interest in the property. On 16th January 2017, the Grenadian Hotel sought to appeal against the decision of Adrien-Roberts J to refuse the additional reliefs.
Subsequently the Grenadian Hotel sought and obtained a conservatory order against the Government pending the determination of its appeal against the decision of Adrien-Roberts J.

On 22nd February 2017, Baptiste JA having heard the application for the conservatory order directed that the Government take no steps to enforce their rights pursuant to the Land Acquisition Act.

The learned judge further ordered that the Grenadian Hotel be permitted to continue to remain in possession and operate its hotel until the determination of the appeal against the decision of Adrien- Roberts J.

The applicants being dissatisfied with the decision of Baptiste JA applied to this Court to have the order set aside.

Held: Dismissing the application and awarding costs to the Grenadian Hotel, such costs to be assessed within 21 days if not agreed, that:

(1). It is settled law that an appellate court would be wary to interfere with the exercise of discretion of a judge unless it is shown that the judge in exercising his discretion blatantly erred in principle or failed to take into account relevant factors or took into account irrelevant factors, or his decision was so unreasonable that it exceeded the generous ambit within which disagreement is permissible.

(2). In considering an application for an interim injunction in which there is a public law element in issue, the approach to be adopted is the application of the guidelines outlined in American Cyanamid v Ethicon with the necessary modifications appropriate to the public law element.

The public law element is a special factor in considering the balance of justice. In determining where the balance of justice lies the court has a wide discretion to take the course which seems most likely to minimise the risk of an unjust result

(3). While a public authority acting within the law should be permitted to exercise its functions and duties for the benefit of the public, having regard to the circumstances of this case, the learned single judge in exercising his discretion correctly applied the relevant principles. He took into account the relevant matters and did not take into account irrelevant matters. There is therefore no basis to interfere with the exercise of his discretion.

JUDGMENT

THOM JA: This is an application to set aside the Order of Baptiste JA in which he granted an interim conservatory order pending the determination of the appeal filed by the respondent (“The Grenadian Hotel”).

For ease of reference I will refer to the applicants collectively as the Government.

[1] The background to this application is that the Grenadian Hotel operates a resort on approximately 30 acres of Crown land pursuant to a 99-year lease dated July 29, 1991 (“the property”).

[2] In February 2016, the Government sought to compulsorily acquire the leasehold interest of the Grenadian Hotel pursuant to the Land Acquisition Act by publishing a declaration for the acquisition in the Gazette. In response, the Grenadian Hotel sought and obtained leave of the court to bring judicial review proceedings.

In granting leave Wallbank J also granted an interim injunction against the Government prohibiting the Government from making or causing to be made a second publication in the Gazette of the declaration to acquire the Grenadian Hotel’s interest.

[3] On 31st March 2016 the Grenadian Hotel filed its claim for judicial review of the Government’s decision to compulsorily acquire its interest in the property.




[4]Adrien-Roberts J having heard the claim, on 20th December 2016 in her oral ruling declared that the decision to acquire the Grenadian Hotel’s interest in the property was illegal, null and void. She quashed the Government’s decision to acquire possession and the decision to publish the declaration in the Gazette on 5th February 2016.

The learned judge also granted a permanent injunction preventing the Government from breaching the covenant for quiet enjoyment outlined in clause 3(1) of the lease. The learned judge refused to grant the following additional reliefs:

(i) an order of prohibition against the government from compulsorily acquiring its interest in the land and its hotel business and

(ii) a permanent injunction preventing the Government from derogating from the grant created under the terms of the lease.

[5] The Government did not appeal the decision of the learned judge. Instead, the Government on the said 20th December 2016 issued another Notice of Declaration to acquire the Grenadian Hotel interest in the property. This notice was published in the Gazette dated 23rd December 2016, with the second publication on 30th December 2016 and the third publication on 6th January 2017.

[6] On 16th January 2017, the Grenadian Hotel filed an appeal against the learned judge’s refusal to grant the additional reliefs of prohibition and a permanent injunction against derogation from grant. The Grenadian Hotel then sought an interim conservatory order against the Government pending the determination of its appeal. This application for a conservatory order was opposed by the Government.

[7] The application was heard by Baptiste JA, who granted the application and directed the Government to take no steps to enforce their rights arising from the acquisition notice issued pursuant to the Land Acquisition Act and that the Grenadian Hotel be permitted to continue to remain in possession of the Property and to continue to operate its hotel business until the determination of the appeal. His reasons for so doing are outlined in paragraphs 9-11 of his judgment and read as follows:

“[9]. The court’s jurisdiction to grant interim conservatory orders is not in doubt. For the reasons they have advanced, the respondents submit that that jurisdiction does not arise in this appeal.

The respondents have presented their opposition to the application for interim conservatory order with clarity but I am not of the view that the application can be disposed of with the simplicity they have advanced.

The respondents emphasised that the learned judge declined to grant prohibition against acquisition of the subject property and a permanent injunction against non-derogation of grant. I note that these are some of the very matters that the applicant seeks to challenge on appeal.

The applicant also points to the fact of the grant of a permanent injunction preventing the first, second and third respondents from breaching the covenant for quiet enjoyment contained in clause 3(1) of the lease.

[10] I note that the applicant’s basal contention relates to its property rights under section 6 of the Constitution. The applicant quite legitimately complains about the extraordinary haste with which the respondents have acted in issuing the Notices of Declaration of Acquisition of the land after the judgment of Adrien-Roberts J.

The respondents acted with such expedition that in a mere ten days after the judgment, they provided themselves with a platform for arguing that as a matter of law the land now vests absolutely in them. Given what has transpired, the applicant’s complaint that should it be successful on its appeal, its fundamental right not to be deprived of its property will be immediately and irremediably contravened by the respondents, cannot be taken lightly.

It seems to me that it is in precisely circumstances of this kind that a conservatory order is needed. Such an order is intended to preserve the subject matter to ensure that the appeal is not rendered nugatory, thus ensuring that the rights of the applicant would still be capable of protection upon the hearing and determination of the appeal.

[11] I refer briefly to the respondents argument that the judgment of Adrien-Roberts J effectively brought the (lease) between the parties to an end and that subsequent to the judgment the government began a new process of compulsory acquisition which remains unchallenged.

It seems to me that it may be difficult to argue that there is no nexus between the matters in so far as the substratum remains the government’s attempts to compulsorily acquire the property in question. The applicant has ventilated its dissatisfaction with parts of the judgment of Adrien-Roberts J by filing a notice of appeal approximately three weeks after the judgment.

It is just and proper that the necessary interim conservatory orders be made so as not to render the appeal otiose.

[8] It is common ground that in granting the interim conservatory order the single judge exercised a judicial discretion. The sole issue is therefore whether the learned Single Judge erred in the exercise of his discretion in making the conservatory order.

[9] The single judge having exercised his discretion it is settled law that an appellate court would be very wary to interfere with the exercise of discretion unless it is shown that the Single Judge was blatantly wrong due to an error in principle in that he applied the law incorrectly or he failed to take into account relevant factors, or take into account irrelevant factors, or his decision was so unreasonable that it exceeded the generous ambit within which reasonable disagreement is permissible.

[10] It is well settled that the principles by which a court is guided in exercising its discretion whether to grant or refuse an interlocutory injunction are the guidelines set out in the well-known case of American Cyanamid v Ethicon Limited.

(a) The public law element is a special factor in considering the balance of justice and the court has a wide discretion to take the course which seems most likely to minimise the risk of an unjust result.

(b) Where the dispute is between a public authority and a quasi-public authority, an injunction may be granted to the quasi-public body without any undertaking in damages.

(c) It is an exceptional course for the court to restrain a public authority from enforcing an apparently valid law. A court would only take such course where having regard to all of the circumstances of the case the court is satisfied that the challenge to the validity of the law is prima facie firmly based and adoption of such an exceptional course is justified.

(d) A public authority acting within the law should be permitted to exercise its functions and duties for the benefit of the public.

[11] Mr. Astaphan, QC takes issue with the manner in which the single judge applied the above principles. He submitted that the single judge erred in the exercise of his discretion in that he failed to correctly apply the principles by (a) taking into account irrelevant matters and (b) failing to take into account relevant matters.

Irrelevant matters

[12] Mr. Astaphan, QC referred to paragraph 10 of the judgment of Baptiste JA and submitted that the expeditious manner in which the December acquisition was made was not a relevant factor to be taken into account in determining whether a conservatory order should be made. The Act requires that the acquisition process be conducted expeditiously. While no time is specified in the Act within which the publications should be made, section 52 of the Interpretation and General Provisions Act provides in effect that where no specified time is prescribed in legislation within which any act is to be done, such an act shall be done without unreasonable delay. He relied on the cases of Thames and Macleod v Attorney- General of Grenada, Governor General of Grenada and Authorized Officer8, and Grand Anse Estates Ltd v Sir Leo De Gale et al.
Mr. Astaphan, QC argued that the single judge

therefore erred when he took into consideration and gave undue weight to the period of time within which the acquisition was completed which was wholly irrelevant.

[13] Mr. Carrington, QC in response submitted that having regard to the order of the lower court and the reliefs sought on the appeal, the haste with which the declaration was made and the effect of the declaration were relevant matters in determining where the balance of justice lies.

[14] In this case there is an ongoing business on the property. If the Government was allowed to exercise rights pursuant to the declaration pending the appeal, the business would have ceased. The declaration was made and publication completed before the time permitted for an appeal against the order of the judge had expired.

In other words, the Government had changed the status quo before the time for filing an appeal had expired. In those circumstances the Single Judge was correct in taking into account the timing and effect of the action of the Government in making and publishing the declaration.

[15] Mr. Astaphan, QC also contended that there was no nexus between the appeal proceedings and the subsequent acquisition by the Government. No constitutional relief was sought in the lower court by the Grenadian Hotel thus the single judge erred when he took into consideration irrelevant matters when he stated at paragraph 10 that the appellant’s basal contention relates to its property rights under section 6 of the Grenada Constitution of 1973.

[16] Mr. Carrington, QC in response submitted that the appeal involved the question whether the Government could acquire the land and thereby the business of the Grenadian Hotel. Thus, the December acquisition is directly related to the subject matter of the appeal since if the orders of prohibition are issued then the Government would be prevented from acting pursuant to the December acquisition.

Also whether the December acquisition is in breach of the order of the lower court of the permanent injunction against breach of the covenant for quiet enjoyment is also a live issue in the appeal. I agree. The matters are inextricably bound together. When the single judge’s statement is read in the context of the judgment, the single judge was putting the Grenadian Hotel’s case into a proper perspective.

(To be continued)

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