Gonzales v Canouan Development Corporation Ltd [2025] EWHC 253 (Comm) (07 February 2025)

Executive Summary

Gonzales v Canouan Development Corporation Ltd [2025] EWHC 253 (Comm) concerns a dispute over a $750,000 price adjustment linked to the sale of a luxury villa (Golf Villa 3) on Canouan island, Saint Vincent and the Grenadines.
The Claimant, Mr Angel Alberto Buenano Gonzales, sold the villa in 2015 to CDC, owned by Andrea Pignataro, under a contract including a side letter providing for a price adjustment if the property or related entities were sold within three years.
The core issue is the interpretation and application of the side letter’s price adjustment clause triggered by a 2017 transaction unknown to Mr Buenano until 2020.
CDC denies owing the adjustment, disputing the valuation and interpretation of the side letter.
The case was heard in December 2024, with judgment delivered in February 2025.

Potential for protracted litigation due to ambiguous contract drafting and delayed discovery of triggering events.
Risk of valuation disputes in property transactions involving complex ownership structures (SPVs and holding companies).
Confidentiality and communication breakdowns between parties can exacerbate disputes and delay resolution.
Lack of factual evidence from the Defendant (CDC) may indicate strategic non-cooperation, increasing litigation risk.

The case involves parties from the UK legal jurisdiction and a Caribbean island (Saint Vincent and the Grenadines), highlighting cross-jurisdictional commercial property investment risks.
UK courts applying English law to offshore property transactions underscores the UK’s role in adjudicating international commercial disputes.
The involvement of US-based law firms (Debevoise & Plimpton LLP) for CDC and UK firms (Brown Rudnick LLP) for the Claimant reflects transatlantic legal collaboration.
The case may influence investor confidence in Caribbean luxury real estate markets, particularly regarding contractual protections and dispute resolution.

The villa was initially purchased for $3.5 million in 2006 and sold for the same nominal price in 2015, with an agreed mechanism for price adjustment based on subsequent resale value.
The side letter’s adjustment formula provides for 30% of the excess sale price over the original purchase price plus expenses, incentivizing value appreciation through investment.
The dispute centers on the valuation of GV3 in 2017 and whether the adjustment clause was triggered by a subsequent sale of the property or related entities.
The case highlights the economic complexity of luxury real estate developments involving branded residences requiring substantial capital investment ($400k-$700k per villa).
Delays in payment and disputes over contractual terms may affect liquidity and investment returns for stakeholders in similar developments.

Parties engaging in luxury real estate transactions involving SPVs should ensure clear, unambiguous contractual terms, especially regarding price adjustments and resale conditions.
Early and transparent communication between buyers and sellers is critical to avoid protracted disputes and costly litigation.
Legal counsel should rigorously review side letters and ancillary agreements to prevent drafting errors and ambiguities.
Investors should consider the risks of delayed discovery of triggering events and incorporate robust disclosure and notification clauses.
Cross-jurisdictional transactions require careful legal structuring and dispute resolution planning, leveraging experienced counsel familiar with both local and English law.
Monitoring developments in Caribbean real estate litigation can provide early warning of emerging contractual and valuation risks.

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**Source Notes:**

Case Title: Gonzales v Canouan Development Corporation Ltd [2025] EWHC 253 (Comm)

Link: https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/253.txt