The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former Cabinet minister may seek more than $66m in damages after the Supreme Court found that the government's lease of his shopping plaza is "valid and binding", it was revealed yesterday.

Damian Gomez QC confirmed to Tribune Business that Justice Cheryl Grant-Thompson had given a verbal pre-Christmas ruling in favour of Leslie Miller's claim of an "unlawful conspiracy" by the government and Bank of The Bahamas to seize his Summerwinds Shopping Plaza off Tonique Williams Highway.

He added that the government and BISX-listed bank's conduct had been "really catastrophic" for Mr Miller and his companies, with the former's failure to finance contractually-agreed upgrades to the property under the lease's terms - as well as the loss of rental income and triggering of a loan default - all set to factor into how damages are calculated.

Mr Gomez, who represents Mr Miller in the dispute, said he understood the Attorney General's Office had already filed to stay the ruling, and for leave to appeal, even though both sides are now waiting for Justice Grant-Thompson to issue her written verdict. This was supposed to happen on December 30, but has been postponed to a date yet to be determined.

"She didn't give her reasons, and said she would do that subsequently," the former minister of state for legal affairs said. "But she ruled in favour of the application we made.

"She struck out the defence on the basis it was frivolous, vexatious or an obvious abuse of process. In light of their [the Government and Bank of The Bahamas] submissions, they really have no defence."

Mr Gomez expressed surprise that the Government and the bank would seek permission to appeal before the Supreme Court released the reasons behind its verdict, revealing he had been contacted by an attorney from the Attorney General's Office to inquire about his availability for a hearing but had received no date yet.

"What I was told was that they've applied for leave to appeal and for a stay," he added. "I don't see they're entitled to either. Quite frankly, with just what they admitted in their pleadings, I'm surprised they're bold enough to do that."

Depending on the success of the Government's appeal application, Mr Gomez said the next step in the process would get to "the heart of the case against the Government and Bank of The Bahamas" - the assessment of damages due to his client.

Tribune Business has seen written suggestions that the Government owes as much as a $66m liability to Mr Miller, but Mr Gomez told this newspaper yesterday: "It could be higher than that.

"The leases called for the Government to put in a mezzanine floor, which would double the size of the property. That would have been a benefit that inured to the landlord beyond the term of the lease. That's really where most of the money is.

"When you take that into the criteria, and the fact the lease was entered into in the context of regularising Bank of The Bahamas' position with the Central Bank, the Government understood that if it reneged it would cause a default in the loan arrangement, and all the costs tied to that are tagged on to the economic loss suffered."

Mr Miller did not return Tribune Business calls seeking comment yesterday, while Carl Bethel QC, the attorney general, declined to comment. "I'm not aware of the details of the case or the basis of the ruling, and am not prepared to make any comment until I am briefed by counsel involved in the matter," he told Tribune Business.

The ex-Cabinet minister's lawsuit, filed last July, had been seeking a Supreme Court declaration that the five leases entered into on December 1, 2016, by the former Christie administration are "valid and binding" upon the Government.

Those leases were among the contracts identified by K Peter Turnquest, deputy prime minister, during the 2018 mid-year Budget debate as "handcuffing" the Government's financial plans. It was one of two cases he cited where the Government owed between $13-$14 million for property leases and had "no exit clauses", even though "not one single government worker has ever set foot in the building".

Tribune Business also reported recently on the other "case", which involves businessman and accountant Kingman Ingraham, who is asserting a $30m claim against the Government based on its alleged breach of an irrevocable lease agreement to rent the former Kelly's Warehouse on Soldier Road for the Department of Public Health - a situation that has placed his family home in jeopardy.

Between his claim and that of Mr Miller, the Government - meaning the Bahamian taxpayer - could be facing a near-$100m payout liability if both their claims are upheld and they obtain the damages sought.

Tribune Business knows of other potential multi-million dollar claims against the Government by investors and companies who believe it has breached binding, legally enforceable contracts they have with it. This suggests the $186m figure quoted by former MP and Cabinet minister, Pierre Dupuch, as to the total liabilities faced by the taxpayer may not be completely far-fetched.

Mr Dupuch, in a letter released on Monday, again referred to this sum and alleged that the Government, through the Attorney General's Office, is using the courts and arbitration system to drag these claims out in a bid to wear its opponent down and force them to settle for 'cents on the dollar' when the financial burden created - along with legal expenses - becomes too heavy to bear.

Sir Franklyn Wilson, the Arawak Homes and Sunshine Holdings chairman, yesterday told Tribune Business that Mr Dupuch's comments are "very significant and cannot be ignored" given that "very tidy sums" were involved in the various breach of contract claims against the Government.

He added that Mr Miller's claim, now the Supreme Court has ruled in his favour, would have to be treated as a liability on the Government's balance sheet if - and when - it moves to accrual-based accounting.

The current cash-based system only picks these up when they are paid, meaning that there could be a nasty shock in terms of the Government's true financial position when all these debts are accounted for with the switch to accrual-based accounting come 2022.

"I don't care what you say about Mr Dupuch's analysis," Sir Franklyn said, "whether it's $186m or some other figure. You cannot dispute that the figure is a material amount. Mr Dupuch has only scratched the surface of how serious this."

Many observers are questioning why the Government prefers to fight instead of exiting contracts and hirings it no longer wants, arguing that the proper course is simply to negotiate a financial settlement with the other side or pay them what is due under the deal's terms. The cash-strapped Treasury, though, may provide one explanation.

In Mr Miller's case, he is alleging an "unlawful conspiracy" by Bank of The Bahamas and the Government to seize his shopping plaza, claiming that both reneged on agreements to fund multi-million dollar renovations at Summerwinds Plaza so it could be rented to government ministries.

Besides claiming damages for the loss of multi-million dollar rental income through these purported contractual breaches, Mr Miller also accused the Minnis administration of deliberately refusing to follow through on the leases signed by its predecessor knowing it "would trigger a default" on $25-$28m worth of loans owed to Bank of The Bahamas, thereby paving the way for the bank and the Bahamas Resolve bail-out vehicle to seize control of the Tonique Williams Highway plaza.

In a previous interview, Mr Miller described the leases - entered into by the former Christie administration in December 2016 - as "a win-win" for all parties given that the rental rate was 45-55 per cent lower than that typically enjoyed by the Government.

The outspoken ex-MP told Tribune Business that the main potential tenant was the Immigration Department, which had been lined up to lease some 98,000 square feet at the former Robin Hood store. Other government departments supposed to join it are the Registrar General's Department, Public Parks and Beaches Authority and Parliamentary Registration (voting) Department.