Kessler v Hill

• Jurisdiction: Bermuda
• Judgment Date: 02 December 2005
• Date: 02 December 2005
• Docket Number: Civil Appeal 2005 No. 13 & 14
• Court: Court of Appeal (Bermuda)

In The Court of Appeal for Bermuda

Evans, Acting P

Civil Appeal 2005 No. 13 & 14

BETWEEN:

John Kessler

Appellant

and

Cameron Angus Hill

Respondent

Mr. J Woloniecki for the Appellant

Mr. A Martin for the Respondent

The following case was referred to in the judgment:

Carter v Mclaughlin (1996) 27 OR (3d) 792

Arbitration Act 1986

Bermuda International Conciliation and Arbitration Act 1993

Appeal from arbitration award — Lease of property — Option to purchase assigned to respondent — Whether domestic or international commercial arbitration — Meaning of ‘commercial’

JUDGMENT of Evans, Acting P

On 25^th November 2005 the Court heard:

(1) an appeal from the Judgment of Bell, J dated 26^th April 2005 in which he gave the Respondent, Cameron Angus Hill, leave to appeal from an arbitration award dated 22^nd December 2004; and

(2) an application by the Appellant, Dr John A G Kessler, for an Order setting aside a Costs Award dated 15^th April 2005 made in respect of the costs of the arbitration.

After hearing argument, the Court (1) dismissed the appeal and (2) refused the application to set aside the Costs Award, and ordered the Appellant to pay the Respondent's costs of the appeal and the application.

A third matter, namely, the Respondent's substantive appeal against the Award, pursuant to the leave given by Bell, J, was adjourned for hearing at the March 2006 sittings of this Court.

The Court's Reasons for its judgment dismissing the appeal and refusing the application are now handed down, as follows.

History

The Appellant is and has been throughout the owner of a residential property, The White House at Tucker's Point in Bermuda. He is a Dutch citizen formerly resident in Costa Rica and now living in Holland.

For a number of years and by two successive leases he leased the property to Richard Bueschel who is a United States citizen and who lives, and at all material times has lived, in the USA. The leases covered the years 1987 until 1999 in two six-year periods, and in 1995 a further agreement, entitled “Amendment to Lease” was executed, dated 1^st September 1995. By this agreement the period of the lease was extended by a further two years until 15^th May 2001 and Mr Bueschel, as tenant, was granted an option to purchase the property for a price to be fixed by arbitration, or by official valuers.

In 2001 Mr Bueschel sought to exercise this option to purchase the property but this was resisted by Mr Kessler. The dispute was referred to arbitration. Timothy Z Marshall was appointed sole arbitrator. On 2^nd August 2004 Mr Bueschel assigned his rights to Mr Hill, the Respondent to this appeal; and by agreement between the parties Mr Hill continued as the Respondent in the arbitration, without prejudice to the Appellant's submission that the right to purchase could not be assigned. Mr Hill is a Bermudian and he lives and works in Bermuda. By his Award dated 22^nd December 2004, the learned arbitrator held that ‘the purported exercise of the option by Mr Hill is invalid’, and he further found that Mr Hill was not entitled to the relief claimed in the arbitration, first by Mr Bueschel and then by Mr Hill as his purported assignee.

When Mr Kessler claimed the costs of the arbitration, it became necessary for the arbitrator to decide whether the arbitration was governed by the 1986 Act or by the 1993 Act, which disapplies the former if it is an international commercial arbitration. He held that it was governed by the 1986 rather than the 1993 Act; in short, that it was a domestic and not an international...