Builders beware (Part Two) – Will the building be demolished?

Sherry Ann McGregor
Sherry Ann McGregor

February 13, 2020

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If there is no appeal from the recent ruling by the Supreme Court in the case of Hsia and Others v Lyn and Others [2020] JMSC Civ 5, the judgment will stand and the parties will then be required to address the court sometime towards the end of April 2020 in relation to arrangements for demolition of the apartment building. If, however, an appeal is filed, and an application for stay of execution of the judgment is granted, there will be further litigation before the order to demolish the building can be enforced.

The judgment has sparked many spirited debates as to whether the building will ever be demolished. All the commentators, so far, seem to agree that the developer did many things wrong, in that he started construction before applying to modify the restrictive covenants, ignored the objectors’ notice to cease and desist, and disregarded an injunction granted by the Supreme Court. However, the questions surround the best approach to be taken to right the wrong.

There is much speculation as to whether the interests of third parties might be affected by the demolition of the building, such as any financial institutions that might have underwritten the cost of the development or the tenants who are currently occupying the apartments who stand to be displaced.

While these concerns have evoked some sympathy and given rise to suggestions that alternatives to demolition should be considered, persons who believe that the surge in multi-family dwellings in the Corporate Area has gone unchecked for too long, welcome this judgment as a wake-up call.

Although I do not pretend to have the answers, some questions have arisen as to the roles of the relevant regulators, and whether there was scope for them to have intervened to prevent the building from being completed in breach of the relevant approvals and covenants. In other words, when the municipal council approved the construction of multiple residences on property that was known to be subject to restrictive covenants that needed to be modified for those residences to be constructed, did the council have any further role to play in ensuring that the conditions of approval were met? In other words, should construction have been halted by the council pending the modification or discharge of the restrictive covenants?

A “development scheme”, as defined in the Real Estate (Dealers and Developers) Act, means “a scheme or intended scheme for the development of land the subdivision or proposed subdivision of which is subject to the provisions of the Local Improvements Act or the Town and Country Planning Act”. Wasn’t this, therefore, a development scheme which was subject to the modification or discharge of the restrictive covenants prior to advertisement for contracting with prospective purchasers? Were there any prepayment contracts between the developer and prospective purchasers? If so, how could the construction of the apartment building have been completed without the Real Estate Board intervening to protect the interests of those purchasers?

If regulatory bodies are effective gatekeepers, ordinary citizens should not need to commence private civil claims in order to prevent unlawful construction from progressing. While a private citizen must file an objection to have the court properly consider whether an application for modification or discharge of a restrictive covenant should be granted, the burden of pursuing such an objection while the builder continues construction in violation of conditions of approval should never arise. We now wait to see whether the building will remain standing but, in the meanwhile, I expect a review of building and other relevant regulations to avoid a recurrence of the scenario that arose in the case.

Sherry Ann McGregor is a partner, mediator and arbitrator in the firm of Nunes Scholefield DeLeon & Co. Please send questions and comments to lawsofeve@gmail.com.

Sherry Ann McGregor

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Sherry Ann McGregor

Sherry Ann McGregor is a partner, mediator, and arbitrator in the firm of Nunes Scholefield DeLeon & Co.

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