The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former PLP MP and Senator faces being disbarred from the Bahamian legal profession over “the most serious and egregious” conduct related to client monies that were to pay $116,300 in due taxes.

A four-person Bahamas Bar Association disciplinary tribunal, in a February 15 ruling, ordered that Pleasant Bridgewater “be struck from the roll” of practicing attorneys after she was unable to account for funds advanced to her by a client to cover closing costs for a real estate transaction.

The tribunal, headed by Supreme Court justice, Renae McKay, noted that the complaint against the one-time Marco City MP by Gary and Janis Belcher had remained unresolved for now close to 15 years and there was “no evidence” that Ms Bridgewater “has or can otherwise account for the funds”.

The Belchers, expatriate real estate investors, had agreed in 2008 to acquire Lot 44 in ‘The Isles of Old Bahama Bay’ for some $1.163m. Ms Bridgewater acted as attorney for both the Belchers, as buyers, and the vendor, Dale Johanneson, and the transaction closed with the latter receiving the required sales proceeds.

However, the Belchers subsequently accused Ms Bridgewater of failing to pay the 10 percent Stamp Duty (now VAT) to the Public Treasury despite the necessary funds being advanced to her. They alleged that she has “failed to account for the funds”, and also failed to lodge the conveyance documenting their purchase for recording in the registry of records.

Realtors spoken to by Tribune Business yesterday said Ms Bridgewater’s actions, or inactions, had left her former clients exposed on two counts. Besides facing the prospect of having to pay a penalty, usually equivalent to 20 percent of the taxes due, the Belchers may also have to now pay a higher principal amount if the Government determines the property has increased in value.

And, without the conveyance being recorded, the couple’s title to their Old Bahama Bay property is not perfected or secured. Ms Bridgewater, who has the right to appeal, could not be located for comment prior to press time last night. However, the disciplinary tribunal ruling noted that Ms Bridgewater did not deny receiving all the necessary funds from the Belchers - including those to pay Stamp Duty - while also admitting five years later that taxes have not been paid.

“The complainant (Gary Belcher) advised that the deposit of $116,300, and the balance of the purchase price and closing costs in the amount of US$1.125m, respectively, were paid by wire transfer to [Ms Bridgewater’s] firm to allow the completion of the transaction to take place,” the ruling noted.

These costs were included, and broken out, in the completion document issued by Ms Bridgewater on March 20, 2008. These costs included $58,150 for the Belchers’ share of the Stamp Duty, equivalent to 5 percent of the purchase price, as the 10 percent is typically split 50/50 between buyer and seller.

None of the costs was disputed, and the tribunal’s ruling said: “The attorney does not deny that all of the requisite funds were received by the firm. Payment of the Stamp Duty and subsequent recording of the conveyance documents are part of the scope of works contemplated by the attorney and the complainant as evidenced by the completion statement. The attorney failed to pay the government Stamp Duty and record the conveyance.”

Ms Bridgewater “confirmed” she had acted for the Belchers in the transaction and received the funds, and admitted “that she failed to pay the Stamp Duty and record the conveyance. The admission most germane to this matter is made in the attorney’s e-mail to the complainant of May 29, 2013”.

The former PLP and Senator wrote: “Please see attached a copy of your conveyance. I have the original and [am] preparing it for stamping and recording. There is a penalty (20 percent of the Stamp Duty amount) due to the delay in stamping, which is not your fault at all and therefore not your expense. It has to be borne by me. Unfortunately, your matter is one of the several that I must resolve.”

During the hearings, Ms Bridgewater did not dispute the non-payment of taxes and admitted there “was an issue with the Stamp Duty”. The only thing she disagreed with was the $116,300 sum, but the Tribunal noted it was normal practice to withhold the seller’s Stamp Duty (now VAT) portion from the purchase price and apply it to paying the tax. And, as Ms Bridgewater was representing both sides in the deal, “she was at all material times seized of the full amount” of tax due.

Branding her arguments to the contrary as “disingenuous”, the Tribunal found of Ms Bridgewater: “The attorney offered no explanation as to where the funds were or why they were not immediately available on her firm’s account at the time Stamp Duty was to have been paid. The attorney did, however, acknowledge, as referred to above, that it was and is her responsibility and indicated that she was trying to make arrangements to settle the matter.....

“The expectation within the practice of conveyancing is that the Stamp Duty would have been paid forthwith upon the closing, or at least at as reasonably practicable a time after closing as possible after closing. It should be a matter of days, weeks at a stretch, but certainly not as in the present case, years later still being unaccounted for.

“The attorney has alluded to having experienced personal issues and difficulties which, while regrettable, are no excuse or explanation for the attorney’s failure in this regard.” The Tribunal reiterated that attorneys hold client funds on escrow or in trust, and monies designated for a specific purpose can only be used for that objective, with every cent accounted for.

“This matter has been outstanding from 2008. The Tribunal has seen no evidence of any actual attempt by the attorney to make good the loss beyond her mention of her desire or intent to do so. There is also no evidence that the attorney has or can otherwise account for the funds,” the Tribunal noted.

“The complainant has suffered extreme prejudice as a result of the failure of the attorney to act in accordance with her duties. This Tribunal finds.... that the funds were not applied to their purpose and have not been accounted for in any way, compounded by the length of time that has elapsed with the complete failure to mitigate by the attorney.” As a result, the Bar’s code of professional conduct was breached.

Ms Bridgewater is no stranger to controversy. She had to resign from the Senate after being charged alongside her client, ambulance driver Tarino Lightbourne, with attempting to extort money from Hollywood actor, John Travolta, by threatening to expose information surrounding the death of his teenage son, Jett, while the family were on holiday in The Bahamas.

Then-justice Dame Anita Allen was forced, though, to declare a mistrial amid jury deliberations for fear the outcome may have been prejudiced by statements made at a PLP conclave by now-Broadcasting Corporation of The Bahamas (BCB) chairman, Picewell Forbes, suggesting she had been acquitted. The charges against Ms Bridgewater and her client were ultimately dismissed after Mr Travolta decided to spare his family the emotional toll of a second trial.

Ms Bridgewater had also previously acted as attorney for Jasper Knabb, the Pegasus Wireless chief, whose promises to establish an operation in Freeport just prior to the 2007 general election ultimately proved empty after he pled guilty to US securities fraud and accounting violations. There is no suggestion that Ms Bridgewater did anything wrong in relation to Pegasus or Mr Knabb.

Besides Justice McKay, the other disciplinary tribunal members were Stephanie Unwala, Alexander Maillis and James Bain. The Bar’s marshalls were Sean Moree, of McKinney, Bancroft & Hughes, and Peteche Bethell.