Discovery Land Company was last night facing the possibility of losing $440,000 per week after the Privy Council upheld the injunction stopping all new work at its $175 million Baker's Bay Golf & Ocean Club development, with the project's opponents claiming the decision was a "recognition and validation" of their right to due process.
The developers, through their subsidiary Passerine at Abaco Holdings, yesterday acknowledged that the Privy Council "did not accede" to its application to set aside the July 27, 2006, injunction obtained by the Save Guana Cay Reef Association.
The injunction prevents Discovery Land Company from carrying out "certain works" on the project until Supreme Court Acting Justice Norris Carroll delivers his verdict on the substantive issues raised by the Association's case, or until the Privy Council hears the latter's application for special leave to appeal the Court of Appeal decision this October.
Not surprisingly, the developers are hoping Acting Justice Carroll delivers his verdict before October.
In a short statement yesterday, Discovery Land Company said an affidavit sworn by the Association's attorney Frederick Smith, said that on August 8, he had been told by Acting Justice Carroll's clerk that the judgement was imminent.
Mr Smith had been told "that Mr Justice Carroll anticipated that he would be delivering a judgement during the third week of August 2006".
However, in an affidavit sworn by Joey Arenson, a Discovery Land Company partner and attorney for yesterday's case, said: "I understand from our Bahamian attorneys that informal intimations from the Judge's chambers about its delivery have proved to be false dawns."
Meanwhile, an ecstatic Mr Smith said: "We won. The injunction stays in place and the Privy Council ordered them to pay our costs.
"The injunction stays in place until either the Supreme Court gives its ruling, or the special leave to appeal is heard in October.
"This vindicates their [the Association's] complaint throughout: that they have been blocked out of the process. It's a recognition and validation of their rights to due process."
Mr Smith added: "The people of Guana Cay are absolutely thrilled that the Privy Council, the highest court in the land, has recognised the tremendous public importance of this case, and is giving them the opportunity to have their day in court."
The partner in Callenders & Co said the legal action was stimulated by what the people of Guana Cay perceived as being "denied due process", and an opportunity to be heard.
"We are absolutely delighted that the Privy Council has seen fit to maintain the status quo. It is absolutely fundamental to our case that the physical environment, the marine and terrestrial environment, are preserved until all issues are dealt with by the court system," Mr Smith said.
He again argued that if Discovery Land Company had been allowed to continue work, the issues and subject matter being litigated in court could be rendered nugatory, meaning that changes to the Guana Cay environment would render the action irrelevant.
In his affidavit, Mr Arenson had alleged that it would cost the developers $440,000 per week if the injunction was upheld.
He 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 the Association 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).
"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."
It is unclear what impact the ongoing battle over Guana Cay, and the stop-start nature of the work performed by the developers to date, will have on wider investor perceptions of the Bahamas as a place to do business in.
In particular, it could alarm investors to know that any Heads of Agreement they sign with the Government could be subject to legal challenge; and held up in court battles, costing them time and money.
By NEIL HARTNELL, Tribune Business Editor
