O’Dwyer decision another nail in the property coffin

ALTHOUGH we are not legal experts and cannot express an informed opinion on the legal intricacies of court cases, there is point raised in the judgement of the O’Dwyer vs Karayiannas Developers case that makes no sense at all. In her judgment, the judge noted that “the fact they (plaintiffs) submitted a sales contract to the Land Registry did not mean they automatically and in perpetuity have become the ‘owners’ (as they mean it) of the residence.”

This is a bewildering view that would suggest that the irrevocable right to property is not protected by the law in Cyprus. If a sales contract for a property that is submitted to the Land Registry does not mean the buyer has become the owner in perpetuity, then we have a serious problem with our laws.

How and when would a buyer become the legal owner of a piece of real estate in perpetuity? Are we to believe that our law does not always safeguard the right to ownership of property?

These are very important questions that nobody should be asking in a country in which there is rule of law. The protection of property rights is one of the fundamental principles on which democracies are built. Yet the judge in the above-mentioned case did not believe that submission of a sales contract to the Land Registry was enough to guarantee a person’s property rights. If this is the case, and the judge understands the law better than us, people should be told how their property rights are protected when they buy real estate.

Until this judgment was issued, most people were under the impression that once a sales contract was submitted to the land registry, the ownership of the buyer was indisputable. There is a Supreme Court decision supporting this position, but the judge in the O’Dwyer case either disagreed with it or was not aware of it. Whatever her reasons, her decision was another nail in the coffin of the Cyprus property market, as it served to reinforce the widely held view among foreigner buyers that Cyprus law offers little protection to property buyers.

There could not have been a worse advertisement for the Cyprus property market than this decision. When a judge rules that not even submission of a sales contract to the Land Registry safeguards property rights, what foreigner, in his right mind, would consider buying a holiday home in Cyprus?

Editorial: Published on January 29, 2011
Copyright © Cyprus Mail

2011 property market predictions

What does the coming year hold in store for the Cyprus property market? Pundits predict that things will be much the same as last year, but 2011 has not got off to an auspicious start.

2009 was a disastrous year for the Island’s property market and 2010 was not much better. After a promising start to last year with sales improving on 2009 figures, sales declined for six consecutive months between July and December.

The market in 2011 has not got off to an auspicious start with property issues once again making headlines in the English language press. This bad publicity will do nothing to encourage overseas buyers, and in particular British buyers, to return to the market.

Title Deed legislation?

Readers may recall that in June 2008, Interior Minister Neoclis Sylikiotis assured property buyers that legislation to resolve problems in the sector could be implemented by the end of the year.

Last week, more than two years after the deadline Mr Sylikiotis set himself, Chairman of the House Legal Affairs Committee proudly announced that the Island’s Deputies (MPs) had agreed a solution to one of the many problems that Mr Sylikiotis was looking to resolve – developers’ mortgages.

This solution graciously allows those buying property to repay part of the developer’s mortgage to get the Title Deeds to their home.

Of course, this solution is merely a way of ensuring the present system continues virtually unhindered and does nothing to protect buyers from the crooks and conmen that plague the Island’s property industry.

Details of the other legislative changes being proposed have yet to emerge. But if they are as ridiculous as last week’s ‘solution’, no-one will be delighted; apart from perhaps the Banks and property developers.

Institutionalised Extortion?

Also last week we received news that District Lands Offices (DLO) are continuing to overvalue property when assessing the Property Transfer Fees. These fees are effectively a sales tax payable at the legal completion of a sale and are equivalent to the Stamp Duty Land Tax or SDLT, charged on property transactions in the UK.

In some reported cases DLO valuations are more than double the property’s purchase price.

Let us take an example of a recent case of overvaluing by the Paphos DLO of a property bought in joint names (husband & wife) to see the impact of this practice:

Property Transfer Fees based on the €130,000 paid to the developer – €3,900

Property Transfer Fees based on the Land Registry’s market valuation of €280,000 – €10,582.80

This overvaluation by the Land Registry cost the buyer an additional €6,682.80 in Property Transfer Fees.

If the property had been purchased in a single name, the additional Property Transfer Fees would have amounted to a cool €10,774.19.

Although the buyer has the right to challenge the Land Registry valuation, it would be Land Registry staff who would undertake the on-site revaluation of the property. How objective and impartial would their valuation be?

Impartial legal system?

The impartiality of the Cypriot legal system was brought into question last week following the unexpected verdict in the celebrated Conor O’Dwyer saga that has been dragging on for the last five years.

Mr O’Dwyer lost his private criminal prosecution against property developer Christoforos Karayiannas & Son Ltd concerning the sale of his house for a second time. The prosecution case against the woman who bought the house, Michelle McDonald, also failed.

Despite damning evidence to the contrary, the judge ruled that Christoforos Karayiannas had not committed fraud by selling Mr O’Dwyer’s home for a second time to someone else, and to add insult to injury, she ordered O’Dwyer to pay the defendants costs.

Speaking to the Cyprus Mail after the judgement Mr O’Dwyer said “My worst fears have come true. What this means is that a developer can keep your money and never deliver your house, then if they want they can re-sell it. Our contract is in the Land Registry and someone else is in our house, it’s that simple.”

There has been much discussion on Internet forums about the judge’s decision. Some believe she was bribed, some say she was leaned on by the local mafia, others say that she deliberately interpreted the law incorrectly to favour the Cypriot defendants.

Mr O’Dwyer’s lawyer, Yiannos Georgiades will file an appeal with the Supreme Court in the next few days, provided that the Attorney General gives his consent. “It’s a mistake on the judge’s part”, he said.

Conclusion

It is difficult to see how the Island’s property market will not be damaged further by these events. It is also difficult to see how Cyprus can recover from the damage without its government taking immediate and effective action to resolve the many problems and restore overseas investor confidence.

By: Editorial Published: Wednesday 26th January 2011
To see comments from British expats read this article in the Cyprus Property News
Copyright © Cyprus Property News

Both sides prepare for next round in O'Dwyer case

LAWYERS ON both sides of the Conor O’Dwyer vs Karayannas Developers dispute are sharpening their pencils in anticipation of the next bout in this high-profile property dispute.

Last week’s court decision clearing Karayannas Developers of the charge of criminal fraud over a disputed villa in Frenaros is by no means the end of the line in the long-running saga.

O’Dwyer bought the property on land belonging to the developers in 2005; disagreements arose soon after when he noticed that the construction did not match the designs he was shown when making the purchase.

He also claims that the villa was later resold without his knowledge, causing him not only to lose the property but also e1/4100,000 in installments he had paid to the developer up to that point.

O’Dwyer lost the private criminal case he brought against the developers because the judge deemed that he did not establish, beyond reasonable doubt, intent to defraud on the part of the defendants.

The legal action initiated was based on section 303A of the penal code, which states: “Any person who, with intent to defraud, deals in immovable property belonging to another is guilty of a felony and is liable to imprisonment for seven years.”

Intent to defraud is defined as “having knowledge or, given the circumstances, ought to have knowledge, that he did not have the consent of the registered owner of the immovable property or of any other person legally empowered to provide such consent.”

The judge in the criminal case said the burden of proof was on O’Dwyer to demonstrate that the accused (the developers and the second buyer) intended to commit fraud.

O’Dwyer’s lawyer Yiannos Georgiades said they would be filing an appeal with the Supreme Court sometime in the next few days, provided the Attorney-general gives his consent.

In her verdict, the judge said that, at the time the complainant filed the sale contract with Land Registry, there was no evidence that the defendants (the developers and the second buyer) intended to cheat O’Dwyer.

Georgiades said this was a major point he would be contesting in his appeal with the Supreme Court: “Mr. O’Dwyer has never claimed that the developers intended to cheat him from the outset, or from the time he filed the sale contract. Rather, his position is that they tried to defraud him at a later stage, due to their disagreements over the villa.”

Therefore the judge’s reasoning on the question of intent to defraud should have referred to the time when the developers sold the property to the second buyer, Georgiades explained.

“It’s a mistake on the judge’s part,” said Georgiades.

“In my opinion, the judge also failed to follow a previous Supreme Court decision according to which a buyer of a property becomes the owner of the property in equity provided he files the contract of sale with the Land Registry.”

The developers claim that they sold the house a second time after notifying O’Dwyer of the termination of their contract.

In her verdict, the judge noted she was not convinced that once someone files a property with the Land Registry that means they “automatically and in perpetuity become the ‘owners’ of the residence.”

The judge noted that since the dispute — whether the contract was terminated or not — is pending before another (civil) court, she could not rule on who was the rightful owner of the property and that therefore this became a moot point as far as the case before her was concerned.

She further observed that the best course of action for the complainant (O’Dwyer) would have been to first resolve that dispute in civil court before embarking on a criminal case.

He elaborated: “If this ruling stands, we would be shooting ourselves in the foot. It’s like telling foreigners, you’re not safe when you buy property in Cyprus. And ironically enough, this is despite existing law which does afford protection.”

The next battleground is in civil court, where the developers are suing O’Dwyer for libel but are also seeking to prove that they did terminate the contract with him, and that thus they were within their rights to sell the same property to another buyer. The first hearings are scheduled for February.

Supreme Court legislation states that as soon as a contract is filed by a buyer with the Land Registry, the buyer is the beneficial owner of a property provided they fulfill all their contractual obligations.

The latter phrase is key to the case of the developers, who argue that their contract with O’Dwyer was terminated when, they say, he breached the contract by refusing to pay the remaining installments.

Georgiades counters his client was willing to continue installments but was refused by the company.

Efthimios Flourentzou, lawyer for Karayannas Developers, says that O’Dwyer had issued the developers a “verbal ultimatum: ‘either give me a large sum of money or else a more expensive villa’.” An allegation which O’Dwyer has flatly denied.

“He did not want the house, it seems,” Flourentzou said. “With his behaviour, Mr. O’Dwyer has severed all ties with my clients.”

He was referring to a website created by O’Dwyer chronicling the affair and casting aspersions on the developers.

But Georgiades has an entirely different take: “Even if a property buyer is said to have not fulfilled the terms of a contract, the contract cannot be terminated unilaterally by either party. You have to go to court, which will decide on the case. Until that time, the buyer remains the beneficial owner, and is entitled to specific performance.

“Imagine what would happen if developers were allowed with impunity to wriggle out of a contract because of complications with a buyer, and then re-sell the property to another. It’s not logical.”

Georgiades went on to muse why, in the first place, Karayannas Developers were going to civil court to validate that their contract with O’Dwyer has been terminated.

“If they indeed lawfully terminated the contract — which is what they’re saying — then why are they going to court to prove it?”

He said the developers did not give O’Dwyer two-weeks notice, as stipulated in the contract, to pay the installments or else they would terminate the contract.

“Instead, they gave him a choice: either keep up payments or give up the house. This was sent by a letter through their lawyers.”

By Elias Hazou Published on January 26, 2011
Copyright © Cyprus Mail

O’Dwyer developers guilty of 2006 assault

FATHER AND son Christoforos and Marios Karayannas were yesterday found guilty of assaulting their client Conor O’Dwyer in 2006. The case, tried in the Famagusta district court, relates to the first assault on Conor by the developers from whom he had bought a villa.

The injuries sustained during this assault were not serious. Conor was assaulted again in 2008 by Karayannas and ended up in hospital for six days with serious injuries. The civil case for this assault is still pending.

Both father and son were found guilty of the second assault by the Criminal Court of Famagusta last year and although the judge pronounced a 10-month prison sentence, the sentence was suspended. The Attorney General is appealing against the suspension of the sentence and the decision issued by the judge, on the grounds that they were found guilty of actual bodily harm and not grievous bodily harm.

In court yesterday, the judge noted that both defendants are liable for the injuries that they caused to O’Dwyer and the damage to his video camera. The judge did not accept the argument that the defendants tried to use reasonable force to prevent the plaintiff from entering their property. The plaintiff was in a public place and was not trespassing. According to the judge, the two defendants tried to stop O’Dwyer from leaving the place. The judge said the defendants forcefully grabbed the plaintiff’s mobile, preventing him from calling his lawyer and then grabbed his video camera. They pushed him around while he was trying to get into his car, injuring him and they broke his camera. The Court ordered the defendants to pay the plaintiff total damages of €1,739 plus interest and legal fees.

During the trial the defendants claimed that the incidents were triggered by O’Dwyer’s behaviour. They said he was ruining their reputation on the internet because of a dispute with them over a property transaction. The judge dismissed this, saying “…any disputes among people who enter into commercial transactions are not resolved by the use of force or by causing fear or through verbal abuse.”

January 26, 2011 Author: Elias Hazou
Copyright © Cyprus Mail

Good news at last for Conor O’Dwyer

Earlier today Cyprus District Court Judge G. Philippou found property developers Christoforos and Marios Karayiannas guilty of an assault against Conor in 2006 and ordered them to pay damages plus interest and legal fees.

FATHER and son Christoforos and Marios Karayiannas were found guilty today in a civil action which was filed in the District Court of Famagusta by Conor O’Dwyer with regard to his first assault case which took place back in 2006.

The judge accepted as true all of the evidence given before the court by Mr O’Dwyer and the other witnesses.

District Court Judge, G. Philippou concluded that both of the defendants assaulted Conor and are liable for the injuries that they caused to him and the damage to his video camera.

They used violence against him without any reason. The judge did not accept that the defendants tried to use reasonable force in order to prevent the Plaintiff from entering their property. The judge stated that he accepted the evidence given by the Plaintiff that he had been in a public place, not trespassing, after having been invited there by his friends who live in that residential block of houses.

The defendant tried to prevent the Plaintiff, by using force, from leaving the place despite the fact that the Plaintiff was trying to leave peacefully.

The judge said that the defendants forcefully grabbed the Plaintiff’s mobile, preventing him from calling his lawyer and then grabbed his video camera while at the same time, they were preventing him from going away. They pushed him around while he was trying to get into his car, injuring him and they broke his camera.

Both defendants were acting together and encouraging each other to assault Conor. The judge found that the defendants were lying in court and gave conflicting evidence. In many parts of his evidence, Marios Karayiannas gave different evidence than that which he had given in a previous affidavit.

The Court ordered the Defendant to pay the Plaintiff total damages of 1,739.20 Euros plus interest and legal fees.

This is the first time that Conor was assaulted by the developers from whom he had bought his house. The injuries sustained during this assault were not very serious but Conor was assaulted again in 2008 by Karayiannas and ended up in hospital for 6 days with serious injuries. The civil case for this assault is still pending.

Both father and son were found guilty of this assault by the Criminal Court of Famagusta last year and although the judge imposed a 10-month prison sentence, the sentence was suspended.

The Attorney General is appealing against the suspension of the sentence and the decision issued by the judge, i.e. to the effect that they were found guilty of actual bodily harm, not grievous bodily harm.

The Defendants tried to claim, via their lawyer, that the incidents had been triggered by the behaviour of the accused, who was ruining their reputation through the Internet because he had a dispute with them over the selling a house to him. Conor gave them 66,000 Cyprus pounds for a house that they never gave him and they also kept his money.

The judge stated without any disrespect to the defendants’ lawyer that the peaceful protest by the Plaintiff and the publication of his story on the Internet were irrelevant to the matter of the assault – “…any disputes among people who are entering into commercial transactions are not solved by the use of force or by causing fear or through verbal abuse.”

The judge also pointed out that despite the intensive and not so nice way that he was cross-examined by the lawyer for the defence, Conor remained calm throughout the whole procedure and he was answering in a simple way.

This whole dispute arose five years ago when Conor O’Dwyer and his family decided to live the dream and move to a house that they bought in Frenaros, Cyprus. The dream turned into a complete nightmare for the couple and their family when they paid a large deposit of 66,000 Cyprus pounds to the developer, only to be told subsequently that their dream home has been resold to another couple despite the fact that they were registered as the beneficial owners of the property at the Land Registry.

(The Attorney General will appeal a court decision and the sentence handed down in the second assault case against Christoforos and Marios Karayiannas that took place in 2008.)

To see comments from British expats read this article in the Cyprus Property News
Copyright © Cyprus Property News

O’Dwyer loses case against developers

By Nathan Morley Published on January 21, 2011

HOMEBUYER Conor O’Dwyer was left devastated yesterday after losing his private criminal prosecution against a land developer in a case which could have far-reaching implications for the property sector in Cyprus.

The long awaited verdict has cleared Paralimni based Karayannas Developers of any wrongdoing – whilst delivering a bitter blow for O’Dwyer after years of legal wrangling over a disputed villa in Frenaros.

Despite the state refusing to press charges citing lack of evidence, O’Dwyer pushed on with the action after a court found there was a prima facie case.

O’Dwyer, 40, tried to establish criminal activity claiming his contract was cancelled by Karayannas – pointing to the fact that the disputed four-bedroom villa was already rubber stamped in his name at the Land Registry.

To make matters worse, O’Dwyer alleged that the villa was later resold without his knowledge, resulting in him not only losing the property but also £100,000 of installments he had paid to the developer.

“My worst fears have come true,” O’Dwyer told the Cyprus Mail after the court hearing yesterday, “What this means is that a developer can keep your money and never deliver your house, then if they want they can re-sell it. Our contract is in the Land Registry and someone else is in our house, it’s that simple.”

In a surprise move, the judge presiding over the Famagusta district court in Larnaca also ordered that O’Dwyer foot all the legal bills, which he estimates could amount to tens of thousands of pounds.

O’Dwyer initiated the legal action two years ago citing section 303A of the penal code – the action made the case significant, as 303A has never been used in such a prosecution.

Article 303A states that: “Any person who, with intent to defraud, deals in immovable property belonging to another is guilty of a felony and is liable to imprisonment for seven years.”

Lawyer Yiannos Georgiaides, acting for O’Dwyer, confirmed to the Cyprus Mail that an appeal against the ruling will be launched, whilst also insisting that there had been a clear error of law.

Georgiaides pointed to existing Supreme Court legislation which he said states that as soon as a contract is filed by a buyer with the Land Registry, the buyer is the legal owner of the property.

“We will appeal against the decision of the judge in this private prosecution because we believe it is against existing Cyprus law and could give the wrong messages to investors from abroad that in Cyprus their rights are not protected by buying property even if they file the contract of sale with the land registry.”

Georgiaides added that investors must be assured that the law in Cyprus is safeguarding their rights.

“The judgments of the Supreme Court are binding on the lower courts since in Cyprus we follow the English common law system,” he said.

Supporters of O’Dwyer maintain that the case has national significance and could have severe adverse effects on the property market.

However the lawyer for Karayannas Developers, Efthimios Flourentzou told the Cyprus Mail that he was delighted with the outcome and the key points of the case had been laid bare during the hearing.

“I was convinced about the outcome, substantial elements of the charges brought simply could not be proved – justice is done,” he told the Cyprus Mail.

Karayannas Developers have continually denied any wrongdoing and accused O’Dwyer of attempting to extort a more expensive house from them – a charge that O’Dwyer flatly denies.

The ongoing saga has taken a series of twists and turns over the past five years, including O’Dwyer staging demonstrations outside the Cyprus High Commission in London, sleeping outside the Presidential Palace in Nicosia and publishing his entire story online and on the video site You Tube.

Last year the developer, his son and an associate were all convicted of actual bodily harm against O’Dwyer and given suspended sentences after they rammed his rental car at a busy junction near the disputed house, then subjected him to a savage beating.

In a separate twist, the state filed charges against O’Dwyer last year – following a complaint from the developer over a personal website he created documenting the entire house purchasing saga.

O’Dwyer is a self employed importer of giftware and his wife Michaela is a management accountant. Their intention when purchasing the property was to live in Cyprus and start a new business.

The case has been closely followed by expatriate communities on the island, where as many as 30,000 Britons are now thought to own property.
Copyright © Cyprus Mail

Conor O’Dwyer’s lawyer speaks out

Conor O’Dwyer’s lawyer was interviewed on Cyprus radio channel CyBC 2 by Rosie Charalambous about the criminal case against property developer Karayiannas and Michelle McDonald, the woman now living in Conor’s home.

EARLIER this evening Conor O’Dwyer’s lawyer, Yiannos Georgiades, spoke with Rosie Charalambous on the CyBC Radio 2 programme ‘Round and About’ about the criminal case against property developer Karayiannas and the woman now living in Conor’s home, Michelle McDonald.

Here are Mr Georgiades opening remarks and background to the case:

“First of all I would like to clarify that it was a private prosecution, it was a criminal case. It wasn’t the Civil Case that is still pending through which Conor is pursuing his rights and is asking for remedies. This is just a private prosecution under Section 303A of the Penal Code.

And according to this section of the Penal Code the developer or anybody really, cannot sell or rent or in any other way give possession of a house to a third person which he knows belongs to another person.

So in this case Conor bought this house and he was according to the Supreme Court Judgement in Cyprus he was the owner, the beneficial owner, from the moment he filed the contract of sale with the Land Registry.

That was done in 2006. In 2006 Conor bought his house with his wife and they filed their contract with the Land Registry. They paid CYP66,000 and later on because of disputes he had with the developer, the developer decided unilaterally to terminate this contract and sell it to another person although he knew that it belongs to Conor and although he knew that he should go to court – the civil court – in order to decide whether he could lawfully terminate this contract and sell it to another person.

Well, the thing is that the second buyer – it seems like she knew about Conor’s purchase of this house and still she carried on buying the house and that is why in this criminal prosecution we filed the case also against the second buyer. Because according to the law, section 303A, anybody who is entering into transactions of selling or renting or getting a house belonging to another is liable for criminal offence.”

Click here to listen to the 16 minute interview between Rosie Charalambous and lawyer Yiannos Georgiades.

By: Nigel Howarth Published: Friday 21st January 2011
To see comments from British expats read this article in the Cyprus Property News
Copyright © Cyprus Property News

British home buyer loses case in court ruling

A judge has ruled that British home buyer Conor O’Dwyer’s private criminal prosecution against Karayiannas and Michelle McDonald has not been proven and has ordered Mr O’Dwyer to pay their costs.

CONOR O’Dwyer has failed in his attempt to get justice through the Cyprus judicial system following a court ruling earlier today in his private criminal case against property developer Christoforos Karayiannas & Son Ltd and Michelle McDonald, the person now living in his home.

In 2008 the Attorney General wrote a three-line letter to O’Dwyer telling him that his developers had not committed any crime by effectively re-selling a house legally registered in his name. However, when O’Dwyer brought a private criminal prosecution against the accused, the judge agreed that Karayiannas and McDonald had a case to answer.

The judge accepted evidence from an official from the Department of Lands and Surveys who confirmed that O’Dwyer’s contract had been duly signed and lodged with the Land Registry for ‘Specific Performance’.

The court heard evidence that O’Dwyer made the stage payments as required by his contract until Karayiannas refused to accept a payment. It also heard how O’Dwyer made numerous attempts contact the Karayiannas to discover what was happening and how all of these were ignored.

The judge also accepted that the developer had resold the property to someone else without seeking Mr O’Dwyer’s consent to cancel the contract or applying for a court order to withdraw the contract from the Land Registry.

But despite the evidence submitted the judge did not consider it sufficient to prove that a fraud had been committed ‘beyond reasonable doubt’ and ordered Mr. O’Dwyer to pay the defendants’ costs.

According to the Island’s ‘Specific Performance Law’, the deposit of a contact of sale at a Land Registry prevents a property from being sold for a second time. It can only be withdrawn from the Land Registry with the agreement of the vendor and the purchaser – or by a court order.

Mr O’Dwyer’s lawyer, Yiannos G. Georgiades, said that: “We will appeal the decision; we believe it goes against the laws of Cyprus. The decision could give the wrong messages to overseas investors that their rights are not protected when they buy property in Cyprus even if they have filed their contracts with the Land Registry.”

“Investors must be assured that the laws of Cyprus safeguard their rights if they file the contract with the Land Registry and that the developer cannot resell their property without their consent.”

Referring to case law Andricos Nicou and others v George Georgiou 1 CLR(1999) p 940, Mr Georgiades added “The judgements of the Supreme Court are binding on the lower courts since in Cyprus we follow the English common law system.”

By: Nigel Howarth
Published: Thursday 20th January 2011
Too see comments from British expats read this article in the Cyprus Property News
Copyright © Cyprus Property News