The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Seven Bahamian landowners have lost the legal battle for the return of their south-west New Providence properties, the Privy Council ruling that compulsory acquisition by the Government was still in the public interest despite appearing to primarily benefit the $1.3 billion Albany development.

The London-based court’s ruling represents the final verdict on the group’s claim, which argued that the former Ingraham administration’s 2007 decision to abandon plans to relocate Nassau’s commercial shipping facilities to southwestern New Providence meant there was no longer any “public purpose” for acquiring their lands.

Detailing the background to the action, the Privy Council said it stemmed from the November 9, 2006, Heads of Agreement between the Government and Park Ridge Securities Corporation, which gave birth to the luxury $1.3 billion Albany community.

Apart from Albany, whose developers include Lyford Cay-based billionaire Joe Lewis’s Tavistock Group, and world-famous golfers Ernie Else and Tiger Woods, the Heads of Agreement also “envisaged” the relocation of all New Providence’s commercial shipping facilities from downtown Nassau to a location near Clifton Pier.

Other benefits included upgrades to the Clifton Heritage Park and the provision of 320 acres to the Government for affordable housing.

But, to facilitate both Albany’s creation and the movement of traffic to/from the port, “the Government agreed to secure the re-routing of a road which bisected the land upon which [Albany] was developed”.

This road was South-West Bay Street, and without its relocation the Albany developers would have been unable to bring all their landholdings into one and create the planned community. It was for this purpose, the South-West Bay Street re-routing, that the landowners’ properties were acquired.

The Government, via the Heads of Agreement, agreed to purchase these properties using its compulsory powers under the Acquisition of Land Act, with the Albany developers providing the financing to facilitate the acquisitions.

The Privy Council noted that this process proceeded rapidly, with the Declaration of Intended Acquisition published on January 19, 2007. This said the lands were to be acquired “for a public purpose, namely, construction of public roads”.

A March 16, 2007, notice said the responsible minister felt the lands should be obtained prior to paying compensation, and a January 4, 2008, notice said the real estate had been “duly appropriated” and “vested in the Treasurer.

In response, the seven landowners - Wendell Munnings, Patricia Bethel, Kenderlyn and Omar Theophilus, Levaughn Cooper, Maxwell Wells and Ava Munnnigs - filed their action in the Supreme Court on April 28,2008.

They sought declarations that they “were owners of the disputed land; that the public purpose for which the lands were being acquired had been abandoned on or about 2 May, 2007, and that the purported exercise of the powers was beyond the powers of [the Act] and unconstitutional”.

The Privy Council said the reference to May 2 related to that year’s general election, which restored the Free National Movement (FNM) to office.

In a press conference given shortly after the election, then-Prime Minister Hubert Ingraham referred to the south-west port proposal - much championed by the first Christie administration - as an idea whose time had “died”.This was seized on by the landowners.

“The significance of 2 May, 2007, was that there had been a change of government on that date. It seems that the new government did not support the proposal for relocation of the port, although they were apparently content to allow the remainder of the development project to proceed,” the Privy Council found.

“In an affidavit sworn in support of the originating summons, Mr Wendell Munnings, the seventh appellant, and one of the dispossessed owners, stated that, when the intention to acquire their land had first been made known, they had been led to believe that it was needed to facilitate the moving of the container port, but that on the change of government in May 2007, it was made clear that this aspect of the project had ‘died’.”

The London-based court said there were three grounds’ to the landowners appeal, the Court of Appeal having previously rejected their bid. These were the purpose of the acquisition; compensation; and constitutional issues.

“The [landowners] submit that the relocation of the port was an essential part of the scheme which justified it in the public interest,” the Privy Council recorded.

“Without it, in the words of Mr Munnings, the project, far from being to the benefit of the Bahamian public, consisted of amenities such as a golf course, restaurants and a luxury hotel, which would be available only to guests.

“In the light of the way the matter proceeded, the court should conclude either that the relocation was never genuinely intended, so that that aspect of the scheme was in effect a sham, or alternatively it was subsequently abandoned, thus removing the public justification for the implementation of the acquisition.”

However, the Privy Council agreed with the Government’s attorneys and the original ruling by Supreme Court Justice Cheryl Albury.

The Acquisition of Lands Act’s section 6 (3) requires all challenges to government compulsory land purchases to be filed within 30 days of the original notice being published.

The original notice had been filed in January 2007, but the landowners filed their action on April 2008, something that meant they were out of time to challenge the Government.

And, notwithstanding the fact that the port relocation was dropped, the Privy Council added that “it is not in dispute that the land was acquired, and has been used, for the construction of ‘public roads and related purposes’.

It added that Bahamian law allowed the Government to compulsorily acquire land for commercial purposes, and said: “There was nothing in the notice itself to tie it specifically to the roads required for relocation of the port. On the other hand, if one looks at the wider project, there appears to be no reason to suggest that it was not a proper public purpose within the scope of legislation. That, in terms, permits acquisition for purposes which are commercial in nature, such as the provision of hotel accommodation or ‘promoting the tourist traffic of The Bahamas’.”

The Supreme Court had agreed with the landowners’ contention that using Albany’s money to pay them compensation breached the Acquisition of Land Act, which required that the funds come from the Treasury.

The Court of Appeal had rejected this as creating “commercial nonsense”, with the Privy Council backing this and the Heads of Agreement method for compensating the landowners.

“In an Act which clearly envisages the use of compulsory powers to facilitate commercial development, such as hotels, it is difficult to see any fundamental objection to a proposal of this kind. There is no general principle of the common law which precludes the use of compulsory powers to facilitate private development of this kind,” the court ruled.

“It seems that the promoters could have achieved precisely the same commercial result if the agreement provided for payment to be made, in the first instance, out of public revenue but subject to an indemnity by Park Ridge.”

The landowners had won at the Supreme Court by arguing that the Government breached both the Acquisition of Land Act and the constitution by failing to pay them prompt, and adequate, compensation for their holdings.

But the Privy Council backed the Court of Appeal in rejecting this, saying there was no evidence that the landowners had attempted to “formulate” their claims, and therefore could not complain about delay on the Government’s part.

The case has now been remitted to the Supreme Court to assess land values and compensation payable. The landowners were represented by Bahamian attorneys, Cedric and Kahlil Parker of Cedric Parker & Company.