B.C. Supreme Court does turn as Caribbean bill collector
Antigua and Barbuda’s idyllic white beaches attract celebrities like Elton John, but it is financial shenanigans under their azure skies that have caught the eye of the B.C. Supreme Court.
A default judgment and garnishee order for $30 million have been issued by the court against the government of the postcard islands, which rest at the confluence of the Caribbean Sea and Atlantic Ocean.
HMB Holdings Ltd., a group of New York investors, won the rulings as part of a decade-long quest to recoup losses from the expropriation of the defunct Half Moon Bay Resort, which it purchased in 1971. (The case was heard in B.C. because the resort is now owned by a B.C. company through a subsidiary.)
It is a stunning seascape of sapphire coves and fecund reefs, but in 1995 a one-two punch of hurricanes devastated the resort.
Five years later, the Antiguan government took the first step toward condemning the property and in 2007 decided to expropriate it, ostensibly for a public purpose.
The move was made at the reputed behest of Texas fraudster Allen Stanford, who held dual citizenship and was once described in the Houston Chronicle as “the leading benefactor, promoter, employer and public persona” of Antigua, a yachting hub that is home to about 80,000.
In November 2006, he was appointed knight commander of the Order of the Nation, a former British colony where Horatio Nelson lived for three years.
Calling himself Sir Allen, the con man apparently had plans to redevelop the Half Moon Bay property on the government’s behalf.
However, three years later, U.S. law enforcement busted Stanford over an elaborate international Ponzi scheme. He was stripped of his title and convicted of running a US$7-billion scam. Stanford is now breaking rocks in the hot sun, serving a 110-year sentence in a federal prison in Florida.
Left holding the expropriated property, the Antigua government claimed it was broke and refused to pay the former owners.
Determining what was adequate under the country’s Land Acquisition Act proved laborious and the dispute eventually landed on the desk of the Queen’s advisers.
In 2014, the British Privy Council made a final ruling that the total debt stood at just under US$40 million, with interest and costs, and ordered the Antiguan government to pay HMB “punctually.” The Privy Council’s decision was affirmed by the Eastern Caribbean Supreme Court in the High Court of Justice and the Eastern Caribbean Court of Appeal.
The government didn’t pay, and instead sold Half Moon Bay in December 2015 to an Antiguan-incorporated subsidiary of B.C.-based Replay Resorts Inc. for US$23 million. HMB’s lawyer, Lincoln Caylor of Bennett Jones LLP in Toronto, said the company received about $15 million. Since then, Antigua has made no further payments, Caylor said.
On Oct. 25, 2016, HMB filed its civil claim in B.C. based on the Privy Council ruling.
“There are still payments due from Replay to the Antigua government and we’re hoping to intercept those,” lawyer Brigeeta Richdale, of Bennett Jones in Vancouver, explained.
“We understand there is still several million to be paid over the next few months. The judges in B.C. were quite amused. I don’t think they had seen a judgment from the Queen before.”
When the Antigua government failed to respond to the B.C. claim, master Dennis Tokarek granted judgment April 7 and issued the garnishee order for $30.2 million naming Freetown Destination Resort Ltd. Freetown is the Antiguan-registered subsidiary of Replay.
“We were expecting people to show up, but nobody ever has,” Richdale added.
Attempts to reach Replay and Freetown were unsuccessful.