The Government and San Francisco-based Discovery Land Company will today attempt to overturn the Privy Council injunction that stopped work on the $175 million Great Guana Cay development, the developers alleging that it could cost them $440,000 per week if it is upheld.
An affidavit sworn by Joseph Arenson, a Discovery Land Company partner and attorney, alleged that the firm may lose $1.75 million a month, resulting from fixed costs related to operating expenses, staff costs, equipment and dredgers, if the injunction was upheld. Arguing that “the majority of these costs would remain if the injunction were not discharged”, Mr Arenson said its continuation would also result in Discovery Land Company losing potential real estate sales and employees, and harm the firm’s reputation.
He added: “Every time the development is interrupted, its attractiveness as an investment is materially prejudiced. These losses are extremely difficult, if not impossible, to quantify.”
But in their submissions to the Privy Council on behalf of the Save Guana Cay Reef Association (SGCRA), which is opposing the Baker’s Bay Golf & Ocean Club project, attorneys Frederick Smith and UK counsel Jonathan Adkin, argued that the costs Discovery Land Company would incur as a result of the injunction’s continuation were minor.
They alleged: “Even if the development were lawfully permitted to proceed, it is submitted that in the context of a planned $500 million, 10-year development, the costs arising from delay would be relatively modest.
“Further, it is clear from the (wholly unparticularised) schedule of losses exhibited with Mr Arenson’s first affidavit… that at least some of these costs would not in any event be incurred were the injunction continued (for example, the $65,000 sales expenses).”
The duo alleged: “It is submitted that the public interest factors in the present case all point one way: the proposed development is not an infrastructure project of national importance to the Bahamas; the potential negative impact on the public interest if the development is permitted to continue is potentially highly significant.”
The Save Guana Cay Reef Association will be represented at today’s Privy Council hearing by Mr Adkin and Ruth Jordan.
Discovery Land Company will be represented by Michael Beloff QC, David Pievsky and Michael Barnett of Graham, Thompson & Co.
The Government respondents in the case – Wendell Major as Cabinet Secretary, the Treasurer, and the Prime Minister as the minister responsible for crown lands – are being represented by James Dingmans QC and Leif Farquharson from the Attorney General’s Office.
In his affidavit, Mr Arenson said it was incorrect for the Association to imply that the Government was ‘giving away’ Crown and Treasury Land to the development, rather than “that there will be a grant of such leases on commercial terms”.
He alleged that although the Heads of Agreement referred to 105 acres of Crown Land and 43 acres of Treasury land being used in the development, “the present negotiations with the Government involve acreage of a much smaller amount of Treasury land”.
“The works to date have been substantially on the private land,” Mr Arenson alleged.
The issue of Crown and Treasury land has been a sore point for the Association. In an affidavit responding to Mr Arenson’s, Troy Albury, its president and director, alleged that because no leases had been executed, “I do not understand on what legal basis the developers can be undertaking works on Crown and Treasury lands”.
He also hit out at Mr Arenson’s allegation that on July 15, 2006, 80 Guana Cay residents wrote to the Association “asking it to stop misrepresenting the community” in the battle against the development. Mr Albury responded by denying it had received any written or other requests of that nature, pointing out that the Association had delivered a petition with 170 names against the development to the Government.
In his affidavit, Mr Arenson disputed the Association’s allegation that its rights and the environment would suffer “substantial irreparable damage” if the project was allowed to continue.
But an affidavit filed in support of the Association by Dr Michael Risk, a professor of biology and geology with McMaster University in Canada, said there were “extremely serious deficiencies” with the development’s Environmental Impact Assessment (EIA) Review. Asked to conduct a review of the EIA by the Association in 2004, he said: “At that time, I outlined several extremely serious deficiencies in the EIA, where aspects of the development that could develop into full-blown environmental catastrophes had been handled badly, or not at all.
“I underlined problems with the marina dredging, runoff of nutrients from the golf course (I dove a lovely fringing reef no more than 20 yards from one of the proposed holes), and emphasised that there were grave problems with the marine monitoring programme.
“Another of my fears has been realised: the bedrock on the island is much closer to the surface than previously estimated. This means that any wastewater discharge, and all the fertilizers, herbicides and pesticides used on the proposed golf course (or as part of the preparations of the development), will be on the reef in a matter of hours.
“It appears that the developers have already removed substantial areas of topsoil, which means that any substance with an environmental impact (oil, fertilizers, pesticides, etc) will simply pass straight into the reef, destroying it.”
In their application to overturn the Privy Council injunction on continuing work at Great Guana Cay, Discovery Land Company is arguing that the issue raised no “far reaching” question of law or matter of major public importance that would allow the Association to directly appeal to the Privy Council.
The Association had sought special leave to appeal to the Privy Council after this was refused by the Court of Appeal on June 28, 2006.
The Association had been seeking to obtain an injunction against the developers after the Court of Appeal relieved them of their November 22, 2005, undertaking not to conduct any new work until the Supreme Court delivered its verdict on the merits of the case.
Supreme Court Justice Norris Carroll heard the substantive issues raised by the Association’s case in February 2006, but has yet to deliver his verdict.
In his affidavit, Mr Arenson said: “I understand from our Bahamian attorneys that informal intimations from the Judge’s chambers about its delivery have proved to be false dawns.”
By NEIL HARTNELL Tribune Business Editor
