The Tribune

• Developer’s Club, marina ownership is affirmed

• But homeowners hail ‘true victory’ after 10 years

• Judge: ‘Good sense’ absent at upscale community

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A “bitter impasse” at one of western New Providence’s most affluent communities has ended with its developer confirmed as owner of the Old Fort Bay Club and the project’s marina.

Justice Indra Charles, in a January 4, 2022, ruling said the eight-year legal battle between New Providence Development Company and the Old Fort Bay Property Owners Association “could have been avoided if good sense had prevailed”.

She urged both sides to “put their differences aside”, following a long-running dispute that continues the near-decade hold-up to the proposed Old Fort Bay marina expansion, and called upon them to “hold no one to ransom” following her judgment.

The fight, which has stymied the high-end gated community’s progress since 2013, was sparked by the Property Owners Association’s claim that the Old Fort Bay Club, marina and two parcels of land subsequently sold to other developers were “common areas” that belonged to it and its homeowner members rather than New Providence Development Company.

It based its ownership assertion on plans for the “Old Fort Bay subdivision” failing to identify land that was to be sold as lots to real estate buyers, together with the developer neglecting to “expressly reserve” those land parcels for itself.

Suggesting that New Providence Development Company and its affiliates were acting as “a constructive trustee” for these common area assets, the Property Owners Association accused the developer of “misappropriation and improper dealings with the common areas, thereby amounting to breach of fiduciary duty and breach of trust”.

In particular, it took issue with the sale of the two land parcels, Pineapple House and Pineapple Grove, for $600,000 and $880,000, respectively, to developers who are named in the judgment as the Mosko and Miaoulis families. The planned marina expansion, which was blocked by a court injunction, and Old Fort Bay Club’s leasing were also cited as “wrongful use of trust property”.

New Providence Development Company, and its Old Fort Bay Company affiliate, hit back by branding the Association’s claims as “absurd”. They argued that the Old Fort Bay gated residential community forms just part of the 861 acres that the former conveyed to the latter on July 1, 1970, to kickstart development in western New Providence beyond Lyford Cay.

The 861 acres now include the nearby Royal Bank of Canada (RBC) branch, Shell gas station, and portions of the Charlotteville and Venetian residential developments, as well as the Old Fort Bay Town Centre. “The developer disputes that the disputed lands are ‘common areas’ and asserts that it is the owner of all lands except those which were sold,” Justice Charles noted.

“With respect to the Club and the marina, the developer asserts that the Property Owners Association, in correspondence, has acknowledged that it owns them. The developer asserts that it is entitled to complete the proposed expansion works for the marina. It denies that the expansion works are inconsistent with the building scheme.”

Setting out New Providence Development Company’s case further, Justice Charles added: “The developer contends that it has been trying for over a decade to resolve this dispute in good faith, and on reasonable terms, and has even sent a signed handover deed to the Property Owners Association that would have transferred 85.637 acres of land to them, but the Property Owners Association has spurned this and many other opportunities to strike a reasonable resolution.

“The developer says that the Property Owners Association has done so because it is wedded to absurd notions such as a claim to entitlement not only of the Club and surrounding areas, but also the marina, Pineapple House, Pineapple Grove, the boat basin and the identified ‘Beach Reserve’.”

Both sides last night claimed victory in a battle in which Justice Charles acknowledged that “neither party was wholly successful”. New Providence Development Company and its affiliates hailed the Supreme Court’s affirmation of their Old Fort Bay Club and marina ownership as their success, together with the upholding of their right to sell land to the Pineapple developers.

The developer, in a statement issued to this newspaper, said: “The Property Owners Association’s main argument was that all land within Old Fort Bay subdivision not developed as lots for sale must be considered ‘common area’.

“The developer, which has been trying for years to conclude the handover of common areas to the Property Owners Association, was strongly opposed to these demands. The judge ruled in favour of the developer on this key point.”

New Providence Development Company also pointed to the judge’s finding that the Property Owners Association cannot levy fee assessments against assets it owns within Old Fort Bay, and the upholding of its rights to install docks, jetties and moorings in the community’s canals and waterways.

However, the Old Fort Bay Property Owners Association said it, too, was “overall pleased with the outcome of the ruling”, which orders the developer to pay damages for selling 0.765 acres of the ‘Beach Reserve’ that belonged to itself and its members as a “common area”.

Asserting that such damages will be “significant”, Sean Andrews, the Association’s chairman, told Tribune Business via a written statement that “a true victory” had been achieved via Justice Charles’ order that all “common areas” - such as the security booth - be transferred by New Providence Development Company to it “forthwith”.

“This brings to fruition what the Property Owners Association has fought over ten years to achieve,” Mr Andrews said. “The Property Owners Association intends to add additional amenities to service its owners including the long-awaited construction of a Property Owners Association office on property, the ownership of which was determined by the Court in the Association’s favour.”

Mr Andrews added that it was “of particular importance” that Justice Charles had imposed conditions on New Providence Development Company and its affiliates before the planned marina expansion - involving the installation of 17 extra floating docks - can proceed.

Despite the project having already been approved by the Government back in 2013, she ordered that all Old Fort Bay residents with property that abuts the marina must first be properly consulted and given a chance to make their views heard. And the Supreme Court judge also mandated that an Environmental Impact Assessment (EIA) be conducted in accordance with Bahamian law.

A further site visit will also be held before Justice Charles determines whether to give the marina expansion the go-ahead. Mr Andrews said this issue had formed “the basis of the commencement of the initial action by the Property Owners Association and its application for emergency injunctive relief”.

He added: “The potential environmental impact on Old Fort Bay cannot be diminished, given the proposed location within the development. The Property Owners Association believes that ultimately the right decision will be made regarding the proposed marina expansion having regard to the rights and views of the property owners and the potential environmental impact.”

Justice Charles criticised several of the key witnesses who gave evidence during the trial. She branded Matthew Hudson, a Canadian attorney and real estate developer, and Old Fort Bay property owner, as “an unimpressive and unreliable witness”.

She added: “No doubt he has an axe to grind because if the proposed extended marina becomes a reality that, according to him, would greatly lower the value of his lot.” Justice Charles said the legal action begun by Mr Hudson, which was consolidated with that of the Association, was in effect designed to hold New Providence Development Company “to ransom”.

The “unimpressive and unreliable witness” description was rolled out for Richard Schaden, a US attorney who testified on behalf of the Association, with Justice Charles at one point questioning his honesty and accusing him of “evasiveness”.

And the “axe to grind” analogy was also wheeled out in reference to the evidence provided by Alistair Henderson, New Providence Development Company’s former principal. “In short, like Mr Hudson and Mr Schaden, I also take his evidence with a pinch of salt,” Justice Charles wrote.

She noted that two former Old Fort Bay Property Owners Association chairmen, Dr Harold Munnings in 2008 and Sir William Allen, The Bahamas’ former finance minister, in 2011 had both written correspondence confirming that New Providence Development Company owns the Old Fort Bay Club into which it had invested $4.2m for renovations.

“In my judgment, the Property Owners Association’s core submission that all lands within the ‘Mauve Line’ of the Old Fort Bay subdivision, which were not developed as lots for sale, are ‘common area’ is untenable and must fail,” Justice Charles concluded.

“The indisputable fact is that all of the land within Old Fort Bay belongs to the developer unless and until a conveyance is entered into and transfer of title takes place. The developer has the right to sell, develop or retain the land.”

As for the 2.01-acre Pineapple House parcel, and the 2.22 acres on which Pineapple Grove now sits, Justice Charles said these were “lands in the ownership of the developer (until it sold them to third parties), which it was free to do. It was never agreed, understood or expected that any of these lands would become ‘common areas’.

“These lands are located outside the perimeter fence erected around Old Fort Bay in the 1980s (long before any lot within Old Fort Bay was developed or sold). Neither the Property Owners Association nor Old Fort Bay residents ever contributed to maintenance or other costs associated with these lands.”

Gail Lockhart-Charles QC and Lisa Esfakis were the attorneys for the developer, while Krystal Rolle QC and Vanessa Carlino represented the Association.