By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Supreme Court judge has issued a warning about the “pitfalls” and “classic dangers” that result when one attorney represents both buyer and seller in the same real estate deal.

Justice Loren Klein sounded the alert in a January 16, 2025, verdict involving a case where Vincent Wallace-Whitfield acted as legal representative for both sides in an aborted land exchange transaction involving properties in Abaco’s Bahama Palm Shores development. The deal eventually broke down and an acrimonious legal battle resulted.

The judge also expressed reservations that Mr Wallace-Whitfield “wrote in indelible market” on the VAT-stamped Deed of Exchange that the transaction was cancelled, noting that the law stipulates that such an instrument can only be voided by the person entitled to it or someone they have instructed to do this.

“This case concerns the fall-out from an aborted agreement for the exchange of properties between the parties. It also illustrates the inherent pitfalls in the practice of a single counsel and attorney acting for both parties to a land transaction,” Justice Klein wrote in his judgment.

“I cannot end this decision without making some general observations about the practice of counsel acting for both parties where there are conflicting interests, as this case is a classic example of the dangers inherent in that practice.

“Although the practice is not unlawful where counsel has obtained informed consent from the parties, it is obviously risky and ought to be discouraged except in the plainest of cases where such conflicts are unlikely to manifest.” Tribune Business has reported several times over the years on real estate transactions where complications have arisen from one attorney representing both parties in the same deal.

In this particular situation, Justice Klein wrote: “In the instant case, it ought to have been clear to joint counsel [Mr Wallace-Whitfield] reasonably early in this matter - and certainly from the point of the defendant’s e-mail of 26 April, 2020 - that it was impossible to fairly represent both parties.

“It is also a matter of some concern that joint counsel defaced and cancelled the Deed executed by the plaintiffs on 15 February, 2021. The law is clear that a deed may be lawfully cancelled by a person who is entitled under it, or by some other person to whom the person entitled has delivered it up to be cancelled.

“Joint counsel in his witness statement testified that he considered the agreement cancelled based on the defendant’s letter of 10 February, 2021, but it will be noted that the letter simply stated that the defendant would be ‘returning all documents relative to your property provided to Mr Vincent Wallace-Whitfield’. It is equally clear that the plaintiffs never authorised the cancellation of the Deed.”

Justice Klein, noting that Mr Wallace-Whitfield appeared as a witness for the defendant party in the trial proceedings, added that “it was astonishing” to see the defence and counter-claim assert that he “admonished” them in his capacity as their legal adviser “not to proceed with the sale exchange of her property for that of the plaintiffs”.

“As counsel for the plaintiffs [Alexander P. Maillis II] rightly pointed out, joint counsel was not on trial in this matter,” Justice Klein said. “But his conduct in this matter did come under scrutiny and drew fire from counsel for the plaintiffs during cross-examination.

“With that observation, I reiterate that it is generally advisable that counsel should seek to avoid putting himself in such situations in the first place. But if he does do so, with the concurrence of parties who have been made fully aware of the legal position, at the first sign of trouble or disagreement he should advise the parties to seek independent counsel. I say no more on this.”

Justice Klein’s warning was delivered in the dispute over a land exchange agreement signed between Julio and April Perotti, and Karen Bethel, in June 2019. The latter “unilaterally purported to terminate” that in February 2021 “on the grounds that the plaintiffs failed to produce the documents evidencing title to their property after a protracted delay”.

However, the Perottis argued that the delay was “caused by extraordinary natural events, in particular Hurricane Dorian of 2019 and the COVID-19 pandemic of early 2020”, and that Ms Bethel “unlawfully terminated the agreement without issuing a notice to complete making time of the essence, and in circumstances where it was clear that the plaintiffs had good title to the property”.

The Perottis initiated legal action on February 25, 2021, alleging breach of contract and that Ms Bethel be ordered to live up to the agreement. Ms Bethel, for her part, counter-claimed for breach of contract herself and sought damages for trespass over an aborted deal that would have seen her take possession of the Perottis’ lot 29 in exchange for her lot 281. Both were located in Bahama Palm Shores.

Ms Bethel alleged that she asked Mr Wallace-Whitfield to represent her on the same day that the land exchange agreement was signed, namely June 25, 2019. “It appears that following the signing of the agreement, the second plaintiff (Mrs Perotti) was also searching for an attorney-at-law to complete the transaction and, according to her, the defendant recommended her attorney, Mr Wallace-Whitfield,” Justice Klein wrote.

“Thus, when Mr Wallace-Whitfield contacted the plaintiffs by e-mail on 9 July, 2019, with respect to the transaction, the second plaintiff inquired whether he would also be able to prepare the deed of exchange in respect of the plaintiffs’ lot and the applicable fees.

“He agreed to this and later communicated his fees. As will be explained later in this ruling, Mr Wallace-Whitfield’s role in the transaction and these proceedings ended up being of some significance, as he was not only instructed on behalf of both parties but ended up being called as a witness in these proceedings by the defendant.”

However, after the Perottis encountered delays in obtaining the necessary documents to prove title to their property, Ms Bethel ultimately decided to withdraw from the transaction and communicated this to the couple on February 10, 2021. She cited the deal taking “much too long”, and not all title documents being in place, as the reason for doing so.

“It appears that in the aftermath of Hurricane Dorian the plaintiffs entered into possession of Lot 281 and constructed on it a dwelling structure, parked a trailer home, and fenced in a portion of the lot,” Justice Klein said in relation to Ms Bethel’s trespassing complaint.

“The plaintiffs, who by this time had engaged independent counsel (Maillis and Maillis), wrote on 12 February, 2021, to the then-counsel for the defendant (also an independent counsel) rejecting the rescission, stating that there was a written agreement for which consideration had been given and which had been partly performed, and the defendant could not simply ‘change her mind’.

“On 15 February, 2021, Mr Wallace-Whitfield wrote in indelible marker on the front page of the VAT-stamped Deed ‘Transaction Cancelled Except as to refund of Value Added Tax’, which he also signed and returned to Maillis and Maillis.”

Justice Klein ruled that the land exchange deal “subsists” and remains binding on both parties as Ms Bethel’s efforts to cancel it were “ineffective”. He ordered that its terms be performed and executed, and that the Perottis pay a nominal $10 sum for their 16-month trespass between November 2019 and May 2021 on lot 281.