The Tribune

• Appeal Court upholds order to sell Bay Street property

• Finds not covered by injunction over govt ‘unpaid rent’

• ‘Set-off’ talks failed as court doubts ‘post-dated’ returns

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Finlayson family yesterday lost its bid to overturn a Supreme Court order compelling the sale of a downtown Bay Street property to settle a near-$2.2m tax debt owed to the government.

The Court of Appeal, in a unanimous verdict, refused to grant the former Commonwealth Brewery/Burns House owners extra time to appeal Justice Indra Charles’ order despite their arguments that another judge had granted a blanket “injunction” against the Treasurer and attorney general to stop the government selling or interfering with any of their property assets.

That injunction, granted by Justice Keith Thompson in a separate action brought by the Finlayson family’s General Bahamian Companies (GBC) entity, involved a claim for unpaid rent said to be owed by the government for use of another property.

GBC was described as the parent entity for Dove Properties Ltd, the vehicle that owned No.56 Bay Street, and the subject of Justice Charles’ sale order as the property upon which $2.2m in outstanding real property tax was owed.

The Finlaysons and their attorney, Desmond Edwards, tried to argue that Justice Thompson’s “injunction” applied to Dove Properties as a GBC subsidiary. They also alleged that Justice Charles failed to take into account their negotiations with the government to “set-off” the real property tax debt against the unpaid rent owed to them.

However, finding that the talks appeared to have been unsuccessful, the Court of Appeal also questioned if - and when - Dove Properties became a GBC subsidiary.

While Mark Finlayson, son of Garet “Tiger” Finlayson, produced GBC annual returns showing it held two shares in Dove Properties, the Court of Appeal noted that the stamp on these corporate filings “post-dated” Justice Charles’ sale order of September 4, 2020.

Appeal justice Milton Evans, detailing the background to the court’s verdict, said the Treasurer initiated legal action to recover the real property tax debt owed by Dove Properties for No.56 Bay Street on August 8, 2016.

“As of June 21, 2016, the total amount of real property tax and surcharge payable ... in respect of the property is $2.178m,” the Government alleged. “On June 21, 2016, the treasurer issued a certificate under section 38(2) of the Act stating that as of January 1, 2016, the outstanding tax was due and payable by” Dove Properties.

A judgment for this sum was entered against the Finlaysons’ company on May 10, 2019, although its execution was stayed until November 30 that year. However, on February 18, 2019, GBC obtained the injunction order from Justice Thompson over the unpaid rent dispute with the Government.

“Armed with the Order from Justice Thompson, [Dove Properties] then sought to arrange a set-off with the parties involved in the two actions (which I should note have not been consolidated),” appeal justice Evans wrote. “The basis of the request by the applicant for a set-off was the assertion that (Dove Properties) herein is a subsidiary of GBC.

“It appears that this attempt to effect a set-off failed, and by summons filed herein on June 30, 2020, the (treasurer) moved to enforce the consent judgment. On September 4, 2020, Justice Charles granted the order for the sale of the property and it is that order which was the subject of the proposed appeal.”

Dove Properties was some 24 days late in filing its appeal which Mark Finlayson, as the company’s director and vice-president, blamed on the COVID-19 restrictions and the problems this had created for interviewing witnesses with comorbidities.

He argued that No.56 Bay Street’s sale would cause “severe and irreparable” financial harm to Dove Properties and his family, but the Court of Appeal dismissed the bid for extra time to appeal on the basis that there were no “real prospects of success”.

“Notwithstanding the number of grounds of appeal, Mr Edwards’ submissions were reduced to the following points,” appeal justice Evans found. “Firstly, that as the applicant company is a subsidiary of GBC, the property to which the Order for sale relates is covered and protected by the Injunction granted by Justice Thompson.

“Secondly, that Justice Charles ought to have given proper consideration to the fact that a set-off was being discussed between the parties.” The Court of Appeal, though, had some trouble over whether Dove Properties is a GBC subsidiary.

“It should be noted that by his supplemental affidavit, [Mark] Finlayson produced what purported to be amendments to the annual returns for the years 2019 and 2020. These returns show GBC as the holder of two of the issued shares in the applicant company,” appeal justice Evans found.

“There are a number of things which are unclear relative to these returns, the primary one being when it is alleged GBC became a shareholder in the applicant company. However, what is clear is that on September 4, 2020, when the enforcement order was made, there was no evidence before Justice Charles to support the applicant’s claim that the applicant was a subsidiary of GBC.

“This was seen from the fact that the date stamp which appears at the bottom of the document post-dated the making of the Order.” Similarly, the Court of Appeal found that No.56 Bay Street was not caught by Justice Thompson’s injunction because it did not specify what property it was referring to.

This is not the first case in recent times where the Finlaysons are being pursued over alleged debts. They were also before the Court of Appeal last year in an unsuccessful bid to halt Caterpillar Financial Services Corporation’s effort to recover the remaining multi-million dollar debt said to be owed over the construction of their luxury yacht, the 147-foot Maratani X.

The Finlaysons have long been prominent figures in the Bahamian business community, having sold their interest in Commonwealth Brewery/Burns House (now 700 Island Wines and Spirits) to Heineken for $125m almost a decade ago.

Other ventures they have been involved with, most notably the now-defunct City Markets supermarket chain and the acquisition of Solomon’s Mines, the luxury goods retailer, have been notably less successful.