The Tribune

• Offers ‘way forward’ advice after real estate battle

• Denies developer exclusivity as ‘commercial absurdity’

• But property manager found operating without licence

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Supreme Court judge has made an impassioned plea for peace to prevail in an Abaco community that has been beset by a long-running dispute between its developer and several homeowners.

Justice Indra Charles, in a July 20 verdict, sought to help Schooner Bay Ventures and its opponents find a harmonious “way forward” after denying both their claims in a battle over who has the right to manage properties within the development.

Having branded Schooner Bay Ventures claim to have exclusivity over all real estate sales, rentals and management a “commercial absurdity”, and effectively upheld the rights of the south Abaco community’s homeowners - one of whom is the prime minister - to market their properties however they want, Justice Charles urged the two sides to compromise if they wish to use “Schooner Bay’s” name in their promotions.

Schooner Bay’s founding articles and declaration require persons planning to use the community’s name in their advertising to first obtain approval from its board of governors, and Justice Charles wrote: “Given the fact that the Plaintiffs’ properties are geographically located in Schooner Bay, it is my fervent hope that if and when they make the necessary application to the board, such approval will not be unreasonably withheld.

“At the end of the day, it is hoped that this community would thrive and flourish in growth, and everyone would live peacefully and happily ever after.” Justice Charles, though, said she was merely providing advice and that this was “not binding” on either side following a dispute whose origins date back more than seven-and-a-half years.

It stemmed from allegations by James Malcolm, principal of Destination Schooner Bay (DSB), a property management company, that the developer was interfering with his business and engaging in restraint of trade by trying to stop him looking after several residences owned by Schooner Bay homeowners.

His four homeowner clients included Bennet Holdings Ltd, a company owned by well-known Bahamian accountant, Bennet Atkinson; Thomas Scheerer; Arunas and Marilyn Pleckatis; and Teofilo Victoria and Maria Mercedes de la Guardia. They joined Mr Malcolm and DSB in seeking a Supreme Court declaration that they had a right to place their properties in a rental pool and advertise them in a magazine.

However, Schooner Bay Ventures and its principals, Dr David Huber and his attorney, Tina Gascoigne, argued that this violated the community’s covenants and restrictions that gave the developer “exclusive rights to market and manage rental properties in Schooner Bay, and to which the homeowners agreed”. Both sides sought damages.

Ms Gascoigne, in a December 19, 2013, letter terminating Mr Malcolm’s employment as Schooner Bay’s marketing director, warned that while “you may continue to operate your business with the clients you currently have, we will be launching our own property management/vacation rental business to service Schooner Bay clients and buyers....”

Schooner Bay Ventures subsequently launched its own vacation rental and property management business in the 2014 first quarter, but alleged that it found Mr Malcolm and DSB were holding themselves out as “the sole authorised agent and representative” for the community when it came to this segment, thus denying them business.

Ms Gascoigne warned Mr Malcolm to cease such activities, and matters came to a head in early 2016 when the latter sought to place his clients’ Schooner Bay properties in Coastal Living magazine as a means to market them. The Schooner Bay Ventures attorney, though, stopped this by informing the magazine that Mr Malcolm was in breach of the community’s declarations.

Justice Charles noted that she was unable to take into account Mr Malcolm’s allegation that “two letters were sent to Schooner Bay Ventures from the Bahamas Real Estate Association (BREA) pointing out that Schooner Bay Ventures is not in possession of a BREA developer’s license and, as such, would not be lawfully entitled to carry out real estate business in relation to the Homeowners’ properties as it contended it is exclusively entitled to do”, because this was not mentioned in his pleadings.

However, Justice Charles accepted Schooner Bay’s argument that Mr Malcolm had breached the Real Estate (Brokers and Salesmen) Act 1995 because he had not been licensed as such when he signed the contracts to represent his fellow homeowner plaintiffs.

She rejected claims by DSB’s attorneys that Mr Malcolm had been licensed because we was employed by other realtors, including Damianos Sotheby’s and Bahamas Islands Realty, adding: “Based on the evidence and the applicable legal principles, I find that DSB operated independently of a broker. It follows that DSB was operating illegally and in violation of REA.

“DSB/Mr Malcolm’s services were not lawful since they contravened the Real Estate (Brokers and Salesmen) Act, as Mr Malcolm was not a broker who is the only licensee allowed to perform the services which he promised to the homeowners.

“Pursuant to section 40 of Real Estate (Brokers and Salesmen) Act 1995, neither Mr Malcolm nor DSB is entitled to bring an action for the recovery of any fee or reward for, or in respect of, anything done by him on behalf of any other person in the course of engaging in such practice. I so find.”

As a result, the claim by Mr Malcolm and his fellow homeowner plaintiffs fell away. However, Justice Charles also rejected Schooner Bay Ventures’ assertion that the community’s founding declaration and covenants give the developer exclusivity on all real estate sales.

The relevant clause only permitted the exclusivity to last for eight years, meaning it expired in 2017, while also permitting “unsigned home-based real estate offices” to operate. “Schooner Bay Ventures cannot shift the goal post to a date at its own whim and fancy,” Justice Charles found.

“In my judgment, when these words are given their ordinary meaning, it is apparent that DSB’s property management activities do not infringe the declaration as there has been no attempt by DSB to operate real estate sales, rental or management offices within Schooner Bay other than unsigned home-based real estate offices.”