The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Blackbeard’s Cay developer is seeking nearly $16 million in ‘special damages’ from the Government because it “recklessly breached” its duty to defend the project from environmental activists.

Blue Illusions and its principal, Samir Andrawos, are arguing that the Attorney General’s Office failed to “properly defend” their interests from the legal challenge launched by reEarth, with numerous documents and evidence supporting their case not presented to the Supreme Court.

The developer, in legal documents seen by Tribune Business, is also alleging that Prime Minister Perry Christie and Allyson Maynard-Gibson, the attorney general, told it not to join in the Judicial Review proceedings because the Government would “protect its economic interest”.

That, if true, has proven to be a mistake, given reEarth’s successful Judicial Review action, which resulted in Justice Stephen Isaacs’ quashing Blackbeard’s Cay’s dolphin and planning-related permits.

That July 2014 ruling effectively requires the Government to ‘shut down’ the project, and Blue Illusions and Mr Andrawos are now mounting an ‘11th hour’ rearguard legal action to preserve the development and their $12 million investment.

The developer, in its June 7, 2016, statement of claim against the Attorney General (and the Government), is alleging that the Christie administration not only failed to defend it, despite prior promises, but also “induced” it to invest via approvals processes that were flawed.

And Blue Illusions is claiming that the Government entered into two international treaties, the Convention on International Trade in Endangered Species (CITES) and UNEP Specially Protected Areas and Wildlife Protocol, without informing it despite their provisions cutting across its commercial marine mammal facility.

The developer is now seeking a Supreme Court declaration that the Bahamas’ accession to these two treaties, without a ‘carve out’ for its operations, is “void” and breaches its constitutional rights by “infringing” on its property rights.

It is seeking a declaration that Justice Isaacs’ ruling is “void” on the same grounds, and wants an injunction to prevent the Government enforcing those two treaties, along with other unspecified damages.

Claiming “misfeasance and breaches of duty” and contract, Blue Illusions and its affiliate, Carib Resorts, are seeking $15.715 million in special damages from the Government in the Supreme Court.

“The first defendant [attorney general/government], by its said deliberate acts of misfeasance and breach of contract, has caused the [developer] loss and damage inclusive of loss of profits for the duration of the term of the sub-lease and extension thereto,” Blue Illusions’ statement of claim alleged.

Its ‘special damages’ claim is broken down into $8.124 million for construction materials used to construct buildings, docks, piers and seawalls; $3.874 million spent on rent and construction and operational payrolls; $1.632 million for equipment and furniture; $1.795 million spent on the lease acquisition, back taxes and back severance payments; and $290,000 for the purchase of the project’s eight dolphins, whose ownership it is disputing.

Blue Illusions sub-leased the 19.142-acre site, located on Balmoral Island off New Providence’s north coast, opposite Sandals Royal Bahamian, from the original Bahamian investor group in early 2012.

That group, Blackbeard’s Cay Ltd, has been named by Blue Illusions as the second defendant in its action. It is seeking $1.795 million from the original investors, having paid off their outstanding debts and liabilities as part of the takeover deal - including $1 million in outstanding rent/lease payments owing to the Government.

Blue Illusions alleged that it received approval from the former Ingraham administration in early 2012 to “redevelop Balmoral Island as a $9 million dolphin and water park resort”, subject to meeting all government conditions and approvals.

The developer, in its statement of claim, said both the Government and the original Bahamian investor group “induced” it to invest via the approval process used by the Bahamas Investment Authority (BIA) and the National Economic Council (NEC).

Subsequent events showed this was an error, as the reEarth Judicial Review action revolved around whether or not the Government had followed the statutory processes set out in law for granting the approvals and permits required by Blue Illusions.

Justice Isaacs, in ruling in favour of the Judicial Review application, found the Government breached the Marine Mammals Protection Act and the Planning and Subdivisions Act by not following these laws, and their approval processes, in giving the nod to the Blackbeard’s Cay development.

However, the BIA gave the project the go-ahead on November 22, 2011, granting Blue Illusions the sub-lease and 20-year extension in return for paying the Bahamian investor group’s outstanding $1 million rent bill and meeting all regulatory requirements.

Blue Illusions alleged that it “paid all of the outstanding debts of [Blackbeard’s Cay Ltd] relating to its operations on Balmoral Island”, and “expended $12 million in capital works to comply with its agreement with the Bahamas Investment Authority and National Economic Council”.

As a result, it is claiming there is “a proprietary estoppel” preventing interference with its lease, while the $1 million rent payment had created a “contractual obligation” for the Government to act ‘in good faith’ towards Blue Illusions.

Yet the developer is alleging that the Government failed to properly defend it from reEarth’s Judicial Review action, despite its attorneys, Charles Mackay and Desmond Bannister, supplying documentary evidence to counter the activists’ case.

“The Prime Minister and the Attorney General represented orally to [Blue Illusions] that it should not join the said Judicial Review proceedings as the Government’s lawyers would protect its economic interest in the dolphin and water park facility at Balmoral Island, and that it should assist the Attorney General’s Office by providing documents,” Blue Illusions alleged.

It added that its attorneys supplied the Attorney General’s Office with approved site plans, other approvals and permits, the lease and documents showing Balmoral Island’s history as a tourist attraction destination.

Besides failing to point out to the Supreme Court that the project was approved prior to the Bahamas signing on to the CITES and UNEP treaties, Blue Illusions alleged the Attorney General’s Office had also “deliberately failed to prosecute” the appeal of Justice Isaacs’ ruling, which was struck out.

With reEarth now pushing to enforce that ruling, and Blue Illusions in dispute with its former Honduran partner, Instituto De Ciencias Marinas (IMS), over the ownership and dispatch of the project’s dolphins back home, the developer’s anxiety to protect its investment shines through.

The ‘statement of claim’ is merely the latest move in what is becoming a complex legal web, with Blue Illusions already having sought a variety of injunctions to prevent the Government from shutting down Blackbeard’s Cay, or removing the dolphins and exporting them to Honduras.