Renward’s relief in $700m lawsuit

Court brings end to waste project dispute

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Supreme Court has dismissed the $727.364m damages claim brought against Renward Wells and two government "agents" by the firm at the centre of the Letter of Intent (LOI) controversy.

Carol Misiewicz, the deputy registrar, in a March 8, 2019, ruling found that Stellar Energy and its affiliates were "from any angle unable to sustain an action" against the now-Cabinet minister and his co-defendants, Algernon Allen and Frank Forbes, "on the basis of the LOI".

She determined that the LOI, the signing of which forced Mr Wells' departure as Ministry of Works parliamentary secretary under the former Christie administration, "was not binding in law" and represented "a discussion document" rather than a completed contract.

The deputy registrar also branded Stellar's claims against Mr Allen, himself a former Cabinet minister, and Mr Forbes, a businessman and accountant who ran Sigma Holdings, as "bad" given that they were not parties to the now-notorious LOI.

Ruling that Stellar, which had proposed developing a $600-$650m waste-to-energy plant at the New Providence landfill, had "not been able to overcome the hurdles presented by the LOI, Ms Misiewicz said Mr Wells - despite signing it - was not a party to its terms.

"In any event the LOI, for whatever it was worth, automatically expired one year from the date of its execution, which was on July 3, 2015," the deputy registrar found. "It was a discussion document, subject to contract and was not binding in law. Approached from any angle, the plaintiffs [Stellar] are unable to sustain an action on the basis of the LOI."

Turning to Stellar's claim against Messrs Allen and Forbes, Ms Misiewicz agreed with their attorney, Damien Gomez QC, that the allegations against the duo were "contradictory" and they were also not parties to the LOI.

"The claims against them are bad and should therefore be dismissed," she ruled, striking out Stellar's action against Mr Wells, Mr Allen and Mr Forbes and awarding the trio costs. "I am satisfied that [Stellar] does not gave a good arguable case against any of the defendants, but in particular does not have a case against" them.

It is unclear what happens to Stellar's claim against the two remaining defendants, the Ministry of Works and Attorney General's Office, who have also urged the court to strike out the matter. While their application was not heard with those of the other defendants', Ms Misiewicz's comments indicate their prospects of success are relatively good.

The Supreme Court's decision effectively leaves Messrs Wells, Allen and Forbes in the clear, bringing to an end a murky episode where the Bahamian people received no clear answers or explanation for the events that led to the former's departure from his parliamentary secretary post.

Jean Paul Michelsen, Stellar Energy's Bahamas-based former chief operating officer, yesterday told Tribune Business there would likely be little appetite to continue the case by appealing the deputy registrar's ruling.

Indicating there had been a split with Stellar's principal, Dr Fabrizio Zanaboni, Mr Michelsen voiced hope that the Supreme Court's verdict would bring "closure" and all sides can "move on".

"I still own equity in the business but, frankly, that business is dormant," he told Tribune Business of Stellar's status. "As far as I'm concerned it is what it is. I'm not surprised she [the deputy registrar] made that decision, and I don't think the major shareholder in Stellar Energy will take this any further.

"I'm happy there's some closure to this entire episode and we're able to move on. I moved on about a year ago."

Stellar Energy launched its ill-fated lawsuit in September/October 2016, claiming $727.364m in damages for loss of opportunity/profits, and seeking declarations that the Government both “honour” the LOI contract and not award a waste-to-energy contract to any other company until damages are paid.

However, Mr Wells' attorney, former MP Gregory Moss, successfully argued that the now-Cabinet minister was "a public authority for purposes of the claim against him". As a result, Ms Misiewicz agreed that the claim against Mr Wells was "statute barred" under both the Crown Proceedings Act and Limitation Act.

"This finding of fact also means that [Mr Wells] is entitled to have the case against him dismissed as he has immunity under Section 49 of the Interpretation and General Clauses Act, as there is no allegation against him in the statement of claim for having acted in bad faith or negligence," the Supreme Court deputy registrar ruled.

Mr Wells, who is currently minister of transport and local government, became embroiled in controversy in mid-July 2014 when the Stellar LOI was leaked to the media and he was accused of signing it on the Government's behalf without the proper authorisation.

He eventually departed his parliamentary secretary post some 80-90 days later, but Tribune Business later obtained evidence suggesting that - as indicated by Mr Wells' close colleague, former MP Dr Andre Rollins said - the whole affair was a "manufactured political controversy".

This newspaper obtained a May 26, 2014, letter written by Michael Halkitis, then-minister of state for finance, to the Inter-American Development Bank's (IDB) Bahamas country representative stating that “the Government has issued an initial LOI” to Stellar Energy.

That letter was dated some five to six weeks BEFORE Mr Wells signed the LOI, suggesting key members of the Christie Cabinet knew of its existence in advance and of the Government's intentions - at least at that point - to sign it. There is nothing, though, to suggest Mr Halkitis did anything wrong.

All involved with the Stellar LOI and subsequent court case, along with both major political parties, are likely to welcome the Supreme Court ruling given their eagerness to put the matter behind them. The FNM took "ownership" of the matter when Mr Wells swapped sides to join it, yet to this day neither he nor anyone else involved has explained to the Bahamian people exactly what happened.

Mary Bain Charlton, the attorney for Stellar, had argued before the Supreme Court that "it is so early in the game" to consider striking the case out "and there is much more evidence that needs to be brought out". That opportunity now seems to have gone.

However, Stellar's original statement of claim laid out multiple allegations. It described Messrs Allen and Forbes as government "agents" who promised then-prime minister Perry Christie would arrange a $40m guarantee for the project, and bragged: “We hold the key to the kingdom.”

The waste-to-energy group's allegations placed Mr Christie and now-PLP leader, Philip Davis, at the centre of events leading up to the LOI’s disclosure and subsequent political firestorm although there is nothing to suggest they were guilty of any wrongdoing.

Arguing that the LOI's leaking showed “clear intent at the Government level to sabotage” the $600m project, Stellar claimed Mr Allen, the former Urban Renewal co-chair, and Mr Forbes were “two of the private individuals who claimed to be representatives of the Bahamas government and/or agents acting for and on behalf of the Bahamas government".