Half Moon Bay Background H.M.B. Holdings Limited is an Antiguan Company formed by American shareholders, registered in 1971.
It assembled and purchased a115 acres of property, fronting the beach at Half Moon Bay, which includes a hundred-room hotel, a 9-hole golf course, various resort amenities and as yet undeveloped estate and residential land. The property was bought and assembled from previous individual owners.
In the early 1970's, the Company increased the size of the hotel and developed various amenities for its guests,building a reputation of elegance and quality of service as well as a list of patrons which included many outstanding repeat guests. The Company has always been compliant with the laws and the treasury of Antigua, neither asking for or reciprocating any favours with Government officials at any level.
The Company also steadfastly turned down offers to purchase the property. Shares changed hands with time, but the shareholders that remained and /or passed their shares to their children had no desire to sell or leave Half Moon Bay.
Following the severe damage caused by Hurricane Luis in 1995, the ALP government of Antigua offered its services in brokering the sale of the property to a new owner for redevelopment. When the company politely refused to sell, the Government embarked on a program of creating impediments to the owners' ability to refinance the reconstruction of their Resort.
Five years later, when a fourth refinancing package was put together, in spite of all the obstacles presented, the Government devised a new strategy of blocking the owners’ ability to redevelop their property: applying the Land Acquisition Act to the property and exercising its right of eminent domain to a forced acquisition -- on the strength of the hypocritical argument that the owners were unable to produce the requisite refinancing to return this valuable national resource to service.
The ALP Government went to Parliament seeking a Declaration granting the Government power to forcibly acquire the property on three separate occasions. The first (December 2000) was stopped by an Injunction, the second (December 2001) imploded because the government gave Parliament a wrong legal description of the property, and the third (February 2002) was stopped by an application for and the granting of a Judicial Review by Justice Donald "Ian" Mitchell in the Eastern Caribbean High Court.
The hypocrisy of the arguments presented to Parliament as a basis for this action was accompanied by character assassination of the Managing Director, by racial and gender slurs, by a litany of lies which have been subsequently perpetuated in documents, published in numerous articles and vociferously argued to this day on the air. Nothing out of the ordinary for the type of governance represented by the ALP, but nevertheless distasteful, distressing and ultimately damaging.
It also became increasingly evident that the proposed acquisition was initiated with the intent of transferring the property to R. Allen Stanford, who was so certain of the ultimate success of this hijacking that he hired Nicklaus Golf to redesign the golf course at Half Moon Bay.
Jr. Minister of Finance, Asot Michael, announced that the transfer of ownership of the property was part of a transaction between Stanford and the Government in which a loan of US$13 M was "forgiven" and a new loan of US $40 M was made available to the Government.
The following year, Lester Bird went so far as to indicate in his 2003 Budget Speech to Parliament that the resale of the Half Moon Bay property could balance the budget. The Wall Street Journal featured a front page article on the subject. American Congressmen and Senators expressed their concern to the Prime Minister in writing.
The UPP, in Opposition at the time, reviewed the documents in the Managing Director's possession which confirmed the distortion presented by the Government in Parliament and in protest of this Declaration walked out of Parliament on three separate occasions when the matter was submitted to a vote.
In addition, Baldwin Spencer swore an Affidavit in support of the owners' Application for Judicial Review, in which he stated that "the decision by the cabinet of the Government of Antigua and Barbuda is fundamentally flawed. The decision must not be allowed to stand. The decision is pregnant with bias unreasonableness and maladministration. The court must intervene."
The legal road to a hearing of the matter was effectively blocked by the Government. Initially, the government submitted an application to strike the review. This was denied by the trial Judge in a 39 page decision.
That decision was then appealed by the Government to the Court of Appeal, which reversed the lower Court's decision by replacing the discretion of the High Court Judge by its own evaluation of facts not in evidence.
The next eight months were spent by the Government working with the Court of Appeal in an effort to deny the Company leave to appeal to the Privy Council. This right was finally granted on September 17th, 2003 on the basis that "the appeal may, just may be regarded as an appeal which involves indirectly a claim to or question respecting property." (Justice Redhead)
By that time, there was much debate as to when the next election would be scheduled -- in any case it would have to occur no later than March 2004. In the meantime, on the initiative of Baldwin Spencer, a verbal agreement had been reached betweenthe UPP and the Company, that should the UPP would become the ruling party, it would reverse the Government's position with regard to the commenced process of forced acquisition of the property.
As an indication of mutual goodwill and in order "not to punish the UPP for the damage inflicted by the ALP", Spencer asked that the Company to consider dropping the claim for damages against the Government. HMB Holdings Limited agreed to do so, with the understanding that no further damage would be inflicted by a new UPP administration.
Given these circumstances, the Company waited to file the appeal to Privy Council. The elections of 2004 brought the UPP into power. The Company celebrated and shared relief at a new beginning for everyone, anticipating the opportunity to work together towards a common goal.
The Managing Director met the new Prime Minister Baldwin Spencer within a week of his election to office. He assured her that the matter of the reversal of the attempted acquisition would be dealt with forthwith. He offered similar assurance to the newly appointedU.S. Ambassador, the Honourable Mary Kramer, who arrived to present her credentials within a few days of the meeting in his new offices.
Since then Prime Minister Spencer at every meeting, whether alone, or in the presence of others, has repeated his desire, his intention and his determination to reverse the acquisition process and to restore to unfettered and undisputed title to the property to H.M.B. Holdings Limited. He repeated this commitment three times during a meeting of Cabinet to which the Managing Director was invited.
Unfortunately, hard as it may be, a government can still be changed more easily than a culture.
Certain members of the new Cabinet saw an opportunity to harvest the seeds sowed by the previous Administration. There are those who, like Minister of Tourism, Harold Lovell, insisted that before any action by the Government, the owners must formally commit to a) a timetable (6 months is their preference ) by which construction must commence and b) if unable to do so, the Company must agree to accept the Government or its replacement of choice as joint venture partners in the ownership of the property and the management of the business.
It has been suggested that since the Government will be "returning" the property, the people of Antigua should be allowed shared ownership in the property.
In a Catch-22 scenario, the Company was asked to produce a commitment from a lender for the funds required to rebuild our property BEFORE the attempted expropriation was abandoned.
All of these various conditions attached to righting a wrong were proposed verbally and repeatedly.
Meanwhile, the Company had no written indication of the Government's intentions to abandon and reverse the acquisition process. Counsel was asked to produce a memo of understanding/agreement -- once in early May, 2004 and again in late June, 2004.
Both were agreed to verbally by Government Ministers and the Prime Minister,only to be rejected by the Attorney General, Justin Simon, who attached additional conditions to the Government's change of position.
In August 2004, in order not to lose the right to appeal to the Privy Council, the Company’s attorney requested that the record should be prepared /assembled for submission to Privy Council. This was done by a joint effort between the attorney and John Fuller, the attorney, who previously represented the ALP administration, now reassigned to the case by the new AG.
Within a week of the work being completed, however, Simon called the attorney and told her the appeal would not be necessary -- the Government was preparing a new offer which the owners would have no difficulty accepting. Lovell made a similar announcement on the Voice of the People program, saying the proposal would be put to Mrs. Querard in two weeks. Weeks went by, Lovell said the matter had been transferred to the AG for review. The AG was busy with other matters.
It took until November 30th 2004, with many letters sent by counsel and much support from the Observer media for a written commitment to be finally issued by Lovell on behalf of the Government.
Immediately before and after the Christmas holiday, some correspondence trickled between the Company's counsel and the AG, debating the proper process of abandoning the forced acquisition.
In mid-January of 2005, the Managing Director requested a meeting with the Prime Minister for her and Ian Moncrief-Scott, a business consultant and an associate from the Isle of Man.
Mr. Moncrief-Scott had met Mr. Spencer in 2001 and was bringing the latest information on the status of availability of funds for the rehabilitation of the Resort. The Prime Minister scheduled the meeting for January 26th and invited AG Justin Simon.
The AG was 40 minutes late to the meeting. Fifteen minutes after the appointed time, the Prime Minister came in, apologizing for the waiting and a most productive, positive and informative session began.
He was shown letters from the World Bank and OPIC, both prepared to provide equity or loan guarantees, although they were beginning to express concern at the time it was taking the new Government to reverse the process of expropriation.
From his side, the PM expressed surprise at having found "expropriation" and "Half Moon Bay" mentioned in the credit reports on Antigua he had been reviewing for another negotiation. He agreed that not only the reversal must be dealt with without further delay, it must also be dealt with in a visible manner, as much for the company’s sake as for that of the new government's reputation and confirmation of the new administration's living up to its promises.
His only concern was that Parliament was not going to meet until late in February. Could the Company hold until then?
When the AG arrived, the PM instructed him that the matter of reversing the Declaration would have to be dealt with at the next sitting of Parliament. The AG came up with a barrage of reasons against this directive, each one patiently shot down by the PM. At the end of the meeting, in answer to the Managing Director’s question whether potential lenders could be informed that the government's position would be reversed in and out of Parliament by the end of February, the PM replied "You can tell the world, Mrs. Querard!" The promise never materialised.
Instead, towards the end of February, the AG wrote to the Company’s legal counsel, requested that the Company transfer title of its property to the GoAB, so that the GoAB could then “re-vest” the property back to the Company.This process was rejected by the Company as unnecessary and also as improper, given the charge and judgment attached to the property.The GoAB could simply reverse its position and retract its intention to expropriate the Company’s property. Further meetings were held between the Company’s Managing Director accompanied by Legal Counsel and the Prime Minister, with AG Justin Simon and Minister of Tourism, Harold Lovell also in attendance.All appeared to be inching forward, but without reaching conclusive results. The last such meeting was held early July of 2005.
It was adjourned because the Prime Minister needing to leave to catch a flight to St. Lucia, where he would remain for a week.He indicated that the Half Moon Bay matter required urgent resolution and that he would be available to resume negotiations immediately upon his return. Instead, during his absence, a new Resolution was developed by the AG and Minister Lovell to be brought to Parliament for ratification.Without further discussion, it was presented to Parliament by the Prime Minister himself. In its preamble, this document sustained and approved the arguments and misrepresentations offered by the previous administration to justify the Government’sinitial attempt at expropriation.It further resolved that the Half Moon Bay property would be re-vested in H.M.B. Holdings Limited under certain conditions and gave the Company three months to respond. It took sixteen and a half hours of vicious and toxic debate in the House and Senate for Parliament to pass this Resolution. As the arguments moved from Parliament to the media, the question arose as to how the GoAB proposed to “re-vest” a property it did not yet own. A curious journalist went to the Land Registrar for confirmation and uncovered yet another act of underhanded abuse of power.While negotiating with the Company, apparently in good faith, having received a negative response to his request for a voluntary transfer of title, the Honourable Justin Simon, Attorney General of Antigua and Barbuda, instructed the Registrar to simply change title to the properties under discussion to the name of The Government of Antigua and Barbuda.
This was done without notification to either the owners or the lien holders -- and in breach of a legally binding undertaking not to take any steps in furtherance of the expropriation, given voluntarily by the GoAB in the Court proceedings which had been halted to allow for an out-of-court settlement of the matter. The three conditions set out in the Parliamentary Resolutions were not acceptable.They had been raised during the precedent discussions and rejected as being too broad and too open to interpretation. It had also been discussed in meetings and in correspondence that no conditions could be appropriate to the return of stolen or seized property. Nevertheless, three conditions were imposed. The first of these required that the Company withdraw its appeal to Privy Council as a pre-condition of any “revestment”. The second condition required the Company to provide a legal blanket of immunity to anyone, in Government or otherwise, for any action taken by them, known or as yet unknown, in connection with or as a result of the Government’s “forced acquisition” of the Half Moon Bay property. The third condition was that the Company would lay out a timetable for a successful financing of the proposed redevelopment and for its actual rebuilding.This timetable had to be accepted by the GoAB and would be binding on the Company inasmuch as any failure or delay would trigger a return of the property into the hands of the GoAB. The further discovery of the surreptitiously performed change of title increased the concerns raised by the conditions imposed by the Parliamentary Resolution.
The Company was not willing to contemplate the equivalent of a voluntary unilateral disarmament in the withdrawal of its pending appeal to Privy Council. It could not accept the third-party liability attached to the blanket immunity demanded by the Government.Nor could it consider the option of accepting the Government’s right to ownership of their property, under any circumstances, and especially not as a factor of a timeline which was basically under Government control. Rather than reject the Resolution outright, the Company responded by presenting an offer of mediation from Sir Louis Blom-Cooper, Q.C., an outstanding and highly respected British jurist with previous experience in Antiguan politics and law.
The Attorney General rejected this offer on the basis that there were no differences between the Government and the Company to mediate. Following this response, the Company could only decline the proposal as stated in the Parliamentary Resolution and reluctantly proceeded with its appeal to the Privy Council. In spite of the above, the Company had not lost all hope of an out-of-court resolution of the matter and accepted yet another offer of assistance, proposed by an American jurist, once an American Assistant Secretary of State, Counsel to Arnold and Porter, and vice-Chairman of Kissinger and Associates, the Honourable William Rogers travelled to Antigua in September of 2006, for a meeting with Prime Minister Spencer.
Joining him was the U.S. Ambassador, the Honourable Mary Kramer, who traveled from the US Embassy in Barbados to represent the Government of the United States of America at that meeting.The stated purpose of the meeting was to determine whether an out-of-court agreement could still be reached between the Government of Antigua and H.M.B. Holdings Limited, in order to avoid further litigation and the consequences to both parties resulting from the expropriation of American-owned property. The Prime Minister welcomed the envoys and this further opportunity to resolve the matter.He welcomed the Memorandum of Understanding which Mr. Rogers brought to the meeting, and which presented new formulation and resolution to the Government’s concerns embodied in the Parliamentary Resolution of July 2005 without exposing the Company to the continued risk of expropriation and politically motivated obstructionism. After reading the MOU, the Prime Minister agreed with the proposed approach.He indicated that he would seek advice fromhis Attorney General before signing it, but assured his visitors that he saw no impediment to an agreement to be reached on that basis. During the meeting, it was clearly stated by the U.S. Ambassador that this was more than an effort to allow H.M.B. Holdings Limited the quiet enjoyment of their property, which is a constitutional right in both Antigua and U.S.A..It was also a diplomatic effort initiated at the highest possible level, to avoid the political and economic consequences of breached treaties and international agreements. The Prime Minister appreciated the effort and asked that Mr. Rogers and Mrs. Kramer meet with AG Justin Simon, and the Minister of Tourism, Harold Lovell, to continue the dialogue later that afternoon, it being agreed that the matter needed to be concluded prior to the end of the year, when preparations would have to commence for the Privy Council hearing now scheduled for April of 2007. That meeting was followed by one short meeting in Washington between Mr. Rogers and AG Simon.
There was no further response from the AG to any communication initiated by Mr. Rogers. The opportunity was scuttled by the Attorney General who delayed his discussion with Mr. Rogers in favour of developing his own original agenda with a Caribbean attorney, who had been engaged by H.M.B. Holdings Limited with very limited authority to deal with a separate issue.
These unauthorised negotiations between the Attorney General and Joseph Archibald, QC revealed further details of the conditions which the GoAB intended to impose on the “revestment” of the Half Moon Bay property to its owners. These were diametrically opposed to the spirit and the letter of the MOU presented by Mr. Rogers and endorsed by the Prime Minister. Not only were these conditions unacceptable, they were also improper, as they required the Company to commit perjury in its dealings with potential lenders.Faced with this repeated duplicity, the Company proceeded with its appeal to Privy Council. The case was heard in April 2007 and a Decision was handed down on June 5th, allowing the GoAB to apply Antigua’s old Land Acquisition Act, grandfathered into the new laws of what is now a Constitutional Republic, to “forcibly acquire” the Half Moon Bay Resort under the powers granted by eminent domain. The Decision reminded the parties that the use of eminent domain also implied that compensation for the acquisition would follow according to the Land Acquisition Act and the Constitution of Antigua and Barbuda -- a point on which both documents agree. The precise wording for this constitutional right, following a deprivation of property, is “the right to fair compensation within a reasonable time”. The only step initiated by the Government of Antigua was to take physical possession of the property in July 2007. No other steps, clearly prescribed by statutes, were taken.To the contrary, the Company’s urgings to proceed were ignored. Once again, the Company took the Government to Court to initiate the process of Compensation by appointing a Board of Assessment to determine the value of the expropriated property. It took a year for the Board of Assessment to be appointed and a second year before itheard the evidence presented by the Company and the GoAB in strongly opposing testimony. Justice David Henry was appointed by the Governor General of Antigua to act as Chairman of the Board of Assessment.The Company appointed Ms. Joyce Kentish as the second member of the Board and the Government appointed Mr. Victor Michael as its representative. The valuation presented by the Company was done by Caribbean market specialists from the Miami Office of CB Richard Ellis.The Residual method of appraising property was used, and comparable properties were considered throughout the Caribbean, to establish the value of the property at U.S.$60 million. The Government presented two valuations, with almost identical findings of value at U.S. $23 plus million,One valuation was performed by a local appraiser, who did not make himself available for cross-examination, either in writing or in person.
The other was the work of an appraiser who represented Deloitte at the date given by the valuation.He appeared at the hearing to defend his work, having severed his relationship with Deloitte at some time previously. Both valuations presented by the Government considered the property “green field”, without taking into consideration either its location or its intended development.They also compared it to only Antiguan properties, most of which were less than 10% in size, and quite unsuitable for any development along the lines established by the Government in its published criteria to aspiring developers of Half Moon Bay. The Government also argued that the value of the property should be established as of 2002, the year the expropriation was commenced, and that the value of the property at the time was approximately U.S. $13 million. No reason, comparables or discussion was offered to substantiate the extra sheet so stating in both valuations.Nor was any embarrassment caused by the same AG accepting the valuation produced in 2001 andprovided to Privy Council of U.S.$32 million . Six months after the hearing, on January 5, 2010, Justice Harris, the Chairman of the Board of Assessment, delivered the Board’s Decision. The Board agreed on the following: 1) that the proper year for valuation of the property is 2007, the year the Government took physical possession thereof; 2) that interest on unpaid compensation would accrue at the rate of 10.25% from the same date; Without agreement on the remaining issues, the Chairman made the determination 3) that “green field” was the proper method of establishing the value of the property, and
4)that the entire 108.5 acres of property should be valued at U.S $23,820,999.00. The Company has appealed this Decision on the basis of faulty legal, mathematical and logical arguments that have led to a value of just under US$5 per square foot for what the Government has referred to as the most desirable property on Antigua. The appeal has been filed in February 2010. As of November, 2010, no date has been set by the Eastern Caribbean Court of Appeal for the hearing of this appeal and the Ministry of Justice in Antigua is delaying the availability of a proper Record of the Board hearing. Meanwhile, the Company has initiated yet another legal action against the Government of Antigua and Barbuda, claiming a breach of its constitutional right to compensation following a deprivation of property. Since the Government accepted the value established by the Board of Assessment, it has become the minimum amount which is due the Company.
According to Commonwealth law, which is followed by the Antiguan jurisdiction in instances where it has no specific law of its own, this minimum amount is due and owing at the time it is established.Any increase over that amount will be dealt with when it is so determinedby the Court, but the Company’s appeal of the award does not deter the duty of the GoAB to pay the amount which it has accepted. Because eminent domain is used for a public purpose, or a public good,the laws governing its process do not consider circumstances such as have been encountered in the case of Half Moon Bay. There are, therefore, no contingencies for any third-party to enter into the compensation stage of the application of eminent domain. The Privy Council chose to accept the taking of property from one owner/developer and giving itor selling it to another owner/developer as application of eminent domain in accordance with Antigua’s Land Acquisition Act, which states that Cabinet’sdetermination of public purpose cannot be questioned, which leaves the GoAB currently at a difficult crossroads. The motivation behind the Government’s actions has always been the potential of mutual reward between itself and R. Allen Stanford. Stanford continued to plan his development of Half Moon Bay and the media announced his making a presentation of his “vision” thereof to a specialcommittee set up by the Cabinet as late asOctober of 2007.Curiously, the committee consisted of the Attorney General, Justin Simon, and the Minister of Tourism, Harold Lovell.The third member of the Committee, a representative for St. Phillips’ South, the area which includes Half Moon Bay, was going to be off-island at the time of this presentation. It is also worthy of note that the expropriation of Half Moon Bay was used in the Claim filed in the U.S. Courts by the Stanford’s Victims Coalition, as an example and proof of collusion between Stanford and the Government of Antigua and Barbuda. Now that Stanford is no longer available to bail the Government out of this new debt, and with the cloud of expropriation of foreign-owned property and business hanging over Half Moon Bay,the Government of Antigua finds itself between a rock and a very hard place indeed.