The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian attorney’s bid to block the $11.9m sale of downtown Nassau’s Union Wharf property over an alleged debt owed by Peter Nygard has been dismissed by two separate courts.

Justice Simone Fitzcharles, in an October 8, 2024, verdict ruled that she would “not impede the sale” of a property - whose redevelopment could play a vital role in Bay Street’s revival - over $3.185m in purported legal fees owed by the jailed and disgraced fashion Canadian fashion tycoon to Carlton Martin.

Rather than grant the sale-barring injunction that the latter was seeking, Justice Fitzcharles ordered that the deal proceed on the condition that the attorneys for the seller, Gail Lockhart-Charles & Company, retain from the sales proceeds the sum claimed by Mr Martin in case he wins his claim.

She noted that blocking, or delaying, Union Wharf’s acquisition by Buena Vista Properties could result in its seizure by the Department of Inland Revenue and subsequent auctioning-off to cover unpaid real property tax debts owed to the Public Treasury.

Tribune Business sources, speaking on condition of anonymity, yesterday confirmed that the sale of Union Wharf has now closed after Mr Martin’s attempt to overturn Justice Fitzcharles’ initial verdict was also rejected in late October by the Court of Appeal. The only change made by the latter was to increase the sum retained by Gail Lockhart-Charles & Company to $3.5m.

“I think it’s going to be very good for The Bahamas,” one contact said of the Union Wharf deal. “It’s much better for it to be developed rather than have it sitting there as it has been for all these years.” The property occupies prime waterfront real estate overlooking Nassau Harbour, thus representing an opportunity for retail, commercial or high-end residential real estate and condo development.

The real property tax debt will now be eliminated from the sales proceeds. While Mr Martin’s interest is protected, he will now have to prove that Mr Nygard, developer of the infamous Nygard Cay retreat on New Providence’s western tip, does indeed have a beneficial ownership interest in Galaxy Group, the entity that sold Union Wharf.

Galaxy Group is understood to deny that Mr Nygard, now serving an 11-year sentence in a Canadian prison after being found guilty of sexually assaulting four women and currently fighting extradition to the US, was ever a beneficial owner of itself and Union Wharf.

And legal documents obtained by Tribune Business reveal accusations by Galaxy Group that Mr Martin has allegedly interfered with Union Wharf’s sale via multiple means, including encouraging a Junkanoo group to ignore an “order to vacate” and remain on a portion of the downtown property. It is also claimed that he sought to dissuade Buena Vista Properties from going through with the deal by alleging there were title issues.

“The claimant sought to interfere with the sale by encouraging one of the occupants of the property, Roots Junkanoo Ltd, to disregard the notice to vacate the Union Wharf property served on Roots by Galaxy, and to remain on the Union Wharf property as the Union Wharf property belonged to Mr Nygard and they had his permission to remain there,” Galaxy Group alleged of Mr Martin.

“Galaxy had to go to the cost and expense of obtaining an order in the Magistrate’s Court, requiring Roots to vacate the Union Wharf property, so that the sale of the property could proceed and Galaxy would be in a position to give vacant possession as required to complete the sale.

“Even after the Order was obtained requiring Roots to vacate the property, the claimant continued to interfere by appealing the Magistrate’s ruling. Galaxy was eventually able to get the Roots appeal struck out.” However, Galaxy Group alleged that Mr Martin’s efforts to obstruct and block Union Wharf’s sale were not finished.

“After the Roots appeal was struck out, the claimant, through his attorneys, wrote several letters to Buena Vista Properties Nassau Ltd seeking to persuade them that Galaxy’s title was encumbered by an equitable charge over the Union Wharf property with respect to the default judgment,” the Union Wharf vendor said in its October 21, 2024, defence and counter-claim.

Galaxy Group, in its counter-claim, is seeking damages from Mr Martin for “fraud” and “slander of title”. It is asserting: “The claimant [Mr Martin] has maliciously published false statements to the attorneys for Buena Vista Properties Nassau Ltd and others that disparage Galaxy’s title to the Union Wharf property.

“The false statements include the representation that the claimant has an equitable charge over the Union Wharf property and that Mr Nygard is the beneficial owner of the Union Wharf property.  The said false statements were published by the claimant knowing that they were untrue or recklessly not caring whether they were true or false, and with the intention of disparaging Galaxy’s title and preventing the sale of the Union Wharf property by Galaxy.”

The now-former Union Wharf owner continued: “Galaxy has suffered loss and damage, and is likely to suffer further loss and damage as a result of the claimant’s fraud and slander of title in that the sale of the Union Wharf property has been delayed and Galaxy has had to incur cost and expense in order to defend its title against the claimant’s disparagement and slander.

“And to procure the removal of Roots from the Union Wharf property, and to prevent the Union Wharf property being sold by the Department of Inland Revenue by public auction to settle outstanding real property taxes owed on the Union Wharf property, which said taxes were to be settled out of the proceeds of sale of the Union Wharf property.”

Union Wharf was sold to Galaxy Group by CIBC Caribbean (Bahamas) on April 17, 2015. Justice Fitzcharles, in her original October 8, 2024, ruling as the “duty” judge that weekend, said Mr Martin had sought an injunction to halt the Union Wharf sale and prevent Galaxy Group from disposing of its interest in the underlying real estate.

“Galaxy states that it is the owner of the property and the Nygard Foundation is the 100 percent owner of the shares of Galaxy Group Ltd,” she noted. “If Galaxy Group Ltd does not sell the property, the Department of Inland Revenue will do so by public auction in short course.”

With Justice Cheryl Grant-Thompson having previously approved Union Wharf’s sale after Mr Nygard failed to “follow through” with his own rival ownership claim, Justice Fitzcharles added that Galaxy Group “wishes to sell the same post-haste as the sale will be for substantially more than can be fetched in a public auction by the Department of Inland Revenue.

“The projected purchase price for the sale of the property to Buena Vista Properties is $11.9m. Mr Martin has a judgment against Peter Nygard in the amount of $2.856m plus interest. As at May 27, 2024, the amount due to Mr Martin with interest was $3.185m. Mr Martin claims that Mr Nygard is the beneficial owner of the property ,” Justice Fitzcharles wrote and, as a result, he has an “equitable interest” in it.

“He states that Galaxy Group has denied Mr Nygard’s beneficial ownership of the property and has therefore refused to recognise his charge on the property,” she added. “Mr Martin’s position is that the sale ought to be stopped until he is able to prove that Mr Nygard owns the property so that he may then appoint a receiver and take control of any sale of the property in order to realise assets to satisfy the debt due to him.”

Justice Fitzcharles said that granting Mr Martin his injunction could result in the Buena Vista Properties deal being scuppered, and “a substantial purchase price from a willing and able buyer” being lost. She added that the Department of Inland Revenue could also sell Union Wharf being sold for a much lower price to recover past due taxes, while Mr Martin’s claim that $11.9m was “an undervalue” is not supported.

She thus ruled that $3.185m be set aside from the sales proceeds to cover Mr Martin’s claim. And the latter was ordered to “give an undertaking in damages to compensate” Galaxy Group should he lose his Nygard ownership claim. The judge also restrained the Department of Inland Revenue from seizing and selling-off the property to allow the sale to Buena Vista Properties to proceed.