Ginn Wins Ownership Battle Critical To Billion-Dollar Project

Sunday, 20 December 2009 00:00 News Editor
Ginn has won a "very critical" legal battle over a challenge to its ownership of 179 acres vital to its $4.9 billion Bahamian resort project, the Court of Appeal finding that a rival claim to the property was "without merit".

Wilbert Bootle and his family had challenged the Certificate of Title granted to Ginn for the site in Grand Bahama's West End. The land in question is located at the heart of the company's mixed-use Ginn sur mer project, and Mr Bootle alleged he and his family had a better ownership claim to the 179 acres via adverse possession.

However, the Court of Appeal found Mr Bootle's appeal against the original Supreme Court decision to be "clearly without merit", dismissing his action and removing any doubt as to the validity of Ginn's ownership.

One source familiar with the land situation, speaking to Tribune Business on condition of anonymity, said the 179 acres in question was situated at the heart of the Ginn sur mer project. Had the Bootle challenge succeeded, and a Certificate of Title been issued instead to him, the impact on the proposed development could have been disastrous.

Besides sitting in the middle of the two major chunks of real estate - one a 600-acre parcel, the other 1,200-1,400 acres - that Ginn acquired from the old Sammons estate to facilitate its project, the 179 acres incorporates part of the development's airport runway and the entrance to its canal system.

"It's a very critical piece," the source said of the disputed 179 acres. "The runway is at the end of that, and it's where the entrance to the canal system is. Ginn couldn't ignore it."

And if Mr Bootle's claim had won, the source said: "It could have derailed the entire development, because the land was in the middle of the project. Ginn didn't take any chances."

Tribune Business was told that when Ginn was in the process of acquiring its West End real estate from the Sammons estate, which owned the former Grand Bahama Hotel Company, both parties - and their attorneys - were unable to establish possessory title to the 179 acres in question.

Sources said this was due to a technical problem, namely that the site's borders did not match the description contained in legal documents establishing the chain of title. To eliminate any uncertainty, the Grand Bahama Hotel Company and Ginn moved to 'quiet' the title to that land via a Quieting Titles Act petition.

Part of this process involves Ginn/Grand Bahama Hotel Company publishing notice of its Quieting Titles Act petition, so that any rival ownership claimants can stake their claim and have it heard by the court. This, Tribune Business was told, was what prompted the Bootle claim.

A Bootle is understood to have been the original Crown Land grantee in West End in the 18th century, but the land involved is understood to have gone through hundreds of conveyances since, while the Sammons estate enjoyed 40 years of uninterrupted possession.

In its judgment, the Court of Appeal recorded how Mr Bootle was appealing a May 18, 2006, order by retired Justice Jeanne Thompson, in which she ordered that Ginn-LA West End be issued with a Certificate of Title to the property. She also dismissed Mr Bootle's adverse possession claim.

In her ruling, Justice Thompson had found that Mr Bootle's evidence of adverse possession "falls woefully short of the necessary proof" to trump Ginn/Grand Bahama Hotel Company's documentary title.

The Grand Bahama Hotel Company had initiated the Quieting Titles petition and, via agreements on November 17, 2004, and on March 23, 2005, sold its interest in the 179 acres to Ginn-LA West End, Ginn's holding company for the Ginn sur mer project. Given that Grand Bahama Hotel Company had sold its interest, the Certificate of Title was issued in Ginn's name.

While Mr Bootle's initial appeal against the verdict was struck out for failing to 'settle the record' in the time set by the Court of Appeal, the latter recorded: "Some time after this (it is not certain when) the appellant learnt that the original petitioner in the quieting action, Grand Bahama Hotel Company, which was registered as a foreign company in the Bahamas in 1963, but at all material times was a company incorporated in Delaware in the United States, was voluntarily dissolved on April 28, 2006."

This meant that at the time Ginn was granted a Certificate of Title on May 18, 2006, the entity that had initiated the Quieting Titles Act petition was not in existence.

This, the Court of Appeal said, prompted Mr Bootle to seek to overturn the order striking out his original appeal, and to challenge the Certificate of Title issued to Ginn.

Apart from alleging that Grand Bahama Hotel Company could not apply to strike out his appeal because it was a non-existent entity, Mr Bootle alleged that Ginn was not a party to the action. He also alleged that Grand Bahama Hotel Company's attorneys did not disclose that the company no longer existed when Ginn was issued its Certificate of Title.

"The hub of the appellant's argument, therefore, is his contention that Grand Bahama Hotel Company could not have been a petitioner capable of maintaining an action in the Supreme Court at the time of the grant of the Certificate of Title, and nor could it have been a party to this appeal since it was a non-existent entity from the date it was dissolved and struck off the Delaware register, even though that fact was not notified to the Registrar General of the Bahamas," the Court of Appeal said.

"In this respect, [Mr Bootle] has made a serious allegation of fraud against counsel for Ginn, who were also counsel for the [Grand Bahama Hotel Company], alleging that they knew, or must have known, of the fact but did not disclose it to the court."

Yet the Court of Appeal's verdict was that Mr Bootle's appeal was "without merit" regardless of whether it was reinstated. The court found there was "nothing" that would prompt it to interfere with Justice Thompson's findings of fact.

In addition, the Court of Appeal said the sales agreement that enabled Ginn to acquire the property was a Vendor Purchaser summons. "That meant as a matter of law, that from the time the agreement was entered into Ginn acquired an equitable interest in the properties and became, in the eyes of equity, the beneficial owner of the property the subject of the Quieting, which interest predates the dissolution of the company," the court found.

As a result, even though the Grand Bahama Hotel Company had ceased to exist on the date Ginn obtained its Certificate of Title, the court still had to consider Ginn's ownership interest.

"Ginn's equitable interest was indefensible in the circumstances, as there was no one who could make a better claim to the property," the Court of Appeal found. It also ruled that Mr Bootle's complaint about Ginn not being substituted as the petitioner was "clearly without merit".

Source: The Tribune