By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Supreme Court judge has blasted the practice of attorneys representing both parties in the same real estate transaction after finding one guilty of “professional negligence”.

Justice Indra Charles said Bahamian attorneys continued to expose themselves to potential conflicts of interest despite judicial disapproval after she determined that Donna Dorsett-Major failed to properly advise foreign second home buyers about the risks and consequences of the $150,000 deal they were agreeing.

The judge hit out after finding in favour of Alan and Sharon Crawford, a Texas couple, in their dispute with former Cat Island administrator turned real estate developer, Christopher Stubbs, who sold them a waterfront lot in his Shanna’s Cove development in 2010.

Relations between the two sides soured after the deal was completed and the couple built their residence. Justice Charles ordered that Mr Stubbs and his Shanna’s Cove Estate Company remove both the incomplete restaurant being constructed across the access road to the Crawfords’ property, and the septic tank on the beach in front of their house, by July 31, 2020.

Her May 1, 2020, judgment also revealed that Mr Stubbs had proceeded with the restaurant’s construction in violation of the Town Planning Act because the building permit had expired, while he also ignored a “cease and desist notice” from the Cat Island District Town Planning Board over zoning infractions.

Justice Charles suggested that power seemed to have “gone to Mr Stubbs’ head” from his days as Cat Island administrator, and that he believed he could do as he pleased at Shanna’s Cove. She also accepted Mr Crawford’s evidence that Mr Stubbs had said “no judge in The Bahamas can tell him what he can or cannot do with his land”.

The ruling gives an insight into the animosity that can erupt over Family Island land disputes far out of sight from Nassau. It is also an example of the kind of situations that The Bahamas needs to avoid as it battles for every cent of foreign investment and currency it can lay its hands on in a post-COVID-19 environment with its tourism industry shutdown.

At trial, Mrs Dorsett-Major “vehemently” denied that she ever represented the Crawfords in the original transaction, acting only for Mr Stubbs. Alleging that the couple did not secure an attorney of their own despite her advice to do so, she claimed that the legal fees she invoiced were paid by the Texas couple on behalf of Mr Stubbs and his company under the terms of the 2010 transaction.

“She insisted that she did a ‘favour’ for the Crawfords for which they have been relentlessly ungrateful,” Justice Charles said of Mrs Dorsett-Major’s response, noting that her attorney claimed she “went to great lengths to protect the Crawfords and ensure the integrity of the transaction”.

Yet despite the absence of a written retainer, the judge found that Mrs Dorsett-Major clearly also represented the Crawfords based on the fact she obtained a title report and “assured” them they had good title to the land. She also prepared affidavits of citizenship for them and sent the conveyancing for recording at the Registry - all actions attorneys representing real estate purchasers normally take.

The Crawfords’ trial attorney, the late Roy Sweeting, argued that Mrs Dorsett-Major had allowed the parties to sign a conveyance that was not confirmed by a licensed land surveyor, and did not correspond to the plan attached, before it was recorded.

He alleged that her “negligence” resulted in the Crawfords not being properly advised as to the consequences of the transaction they were entering into. The Texas couple ended up purchasing land that did not meet the boundary specifications intended, while their reliance on Mr Stubbs’ oral promises regarding the 15-foot access road gave them no interest in this vital link to their property.

The Crawfords were also not warned by Mr Dorsett-Major about the absence of restrictive covenants or other rights that would prevent a commercial enterprise - such as Mr Stubbs’ restaurant - from being built near their home. As a result of these findings, Justice Charles concluded that the attorney was negligent and has set June 17, 2020, as the date for a hearing to determine how much she will have to pay in damages.

Turning to the issues raised, Justice Charles said: “Now the practice of the same attorney acting for a vendor and a purchaser in the same purchase and sale of land may be properly characterised as a non-contentious matter, but it is a practice that has been deprecated by the courts.

“It has been said that an attorney who acts for both parties put himself/herself in such an indefensible position that he/she must be liable to one or the other. Take an example. It is the duty of the attorney for the purchaser to undertake certain searches of the property being purchased to determine that what the vendor states is being sold actually conforms to what the vendor has contractually agreed to sell.

“Unquestionably, this involves one client - the purchaser - making an inquiry of the other client - the vendor. The attorney is bound to inform the purchaser of the result of the searches undertaken. It is for this reason that courts frown upon attorneys representing both purchaser and vendor, but despite strong judicial admonitions, the practice of the same attorney acting for both parties in non-contentious matters continues.”

Tribune Business has over the past two decades reported on multiple questionable real estate and commercial transactions that often have the same characteristic in common - an attorney representing both the seller and the buyer. Bahamians frequently agree to such arrangements as as way to minimise or share the costs of such deals, but this often comes with consequences unforeseen at the time.

Vendors often propose who both sides can use for the legal work but, if a dispute breaks out between themselves and the purchaser, the attorney almost inevitably sides with one of the parties - usually the person who has most money, or who brought them into the transaction. The potential for conflicts of interest, as well as costly and long-running disputes, is high and to the detriment of all involved as well as Bahamian commerce.

Justice Charles, meanwhile, noted in her judgment that the Crawfords decided to buy their Cat Island property after becoming “captivated by its beauty and serenity” in 2010. The deal was concluded on August 30 that year but, in mid-September 2014, the couple were in the US when they were informed that Mr Stubbs had begun building a property across the access road and had also constructed a septic tank on the beach by their property.

“The septic tank has no inspection access covers and does not comply with the rules and regulations governing the placement of a septic tank so close to the ocean,” the Supreme Court judgment said. “Despite numerous requests by the Crawfords and their attorneys to cease and desist all construction, Mr Stubbs failed and/or refused to heed any of the warnings.”

Noting numerous inconsistencies in Mr Stubbs’ evidence, and his replies under cross-examination, Justice Charles described him as “an unimpressive and inherently unreliable witness”. She expressed disbelief at suggestions that his surveyor “miraculously” inserted an access road on two plans of Shanna’s Cove without his instructions.

“Mr Stubbs appeared to have developed a personal animosity toward the Crawfords and a desire to remain the ‘boss’ in Shanna’s Cove,” Justice Charles concluded. “His former position as the administrator of the island seemed to have ‘gone to his head’, giving him false aspirations.

“His desire to bend the Crawfords and the other residents of Shanna’s Cove to his self-control was further exacerbated when the court visited the [site] On that visit, when the court asked Mr Stubbs a question about the location of the survey pins, he marched on to the Crawfords’ property, laid hold of a mature plant that was near one of his recently installed survey pins and wrenched it from the ground.

“He did so without permission and without thought or care for whose land he was on, or whose shrubbery he was destroying. In the words of Mr Sweeting: ‘There could hardly be a clearer demonstration of his imperious, bullying attitude or the accuracy of the claims against him’,” Justice Charles added.

“In addition, I believed Mr Crawford when he testified that Mr. Stubbs has threatened his life and the safety of his wife and his dog. He said that Mr Stubbs has also threatened to bring a bulldozer to demolish their house and had stated that ‘no judge in The Bahamas can tell him what he can or cannot do with his property’. This is indeed unfortunate language coming from a man who once held the prestigious position of administrator of Cat Island.”