• Or else West Bay St property sold-off

• Court rejects Collie’s settlement claim

• ‘Surreptitiously’ exploited tax amnesty

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A prominent Bahamian businessman has been given 60 days to pay $734,222 in outstanding real property taxes on his West Bay Street nightclub property or see it sold by the government.

Al Collie, developer of Club Luna and the Zoo before it, yesterday failed in his bid to “stay and/or suspend” an April 9, 2019, judgment obtained against him by the government’s treasurer for $1.357m in unpaid real property tax and penalty surcharges owed on that parcel and another property at Elizabeth Avenue in downtown Nassau.

Justice Ian Winder, in a Supreme Court verdict dated July 29, granted the sale Order sought by the treasurer while giving Mr Collie and his company, Alco Holdings, some two months to pay the taxes still outstanding and due. He also added a 6.25 per annum interest rate to the $734,222 due.

Tracing the dispute’s history, Justice Winder said that two months’ prior to the initial judgment obtained by the treasurer, Mr Collie and Alco Holdings had offered to hand over lots 18-23 in the Sea Beach subdivision free of charge to the government as a means to settle the debt.

The offer was made to Shunda Strachan, chief valuation officer, with Mr Collie disclosing that the government had previously shown interest in compulsorily acquiring the same lots as it had begun constructing sea walls on them with his permission. This was based on a draft notice of the acquisition from the Ministry of Works, and was later confirmed by David Davis, permanent secretary in the Prime Minister’s Office.

“The offer was ultimately rejected notwithstanding a somewhat favourable meeting with the prime minister [Dr Hubert Minnis],” Justice Winder wrote. Alco Holdings subsequently made two payments on its real property tax arrears, worth $772,601 and $35,049 respectively, for its West Bay Street property on May 18 this year. This reduced the debt to the $734,222 that was the subject of Justice Winder’s Order.

Although Club Luna was not specifically referenced in yesterday’s ruling, it is highly likely that the parcel upon which it sits is the judgment’s focus given that documents put before the Supreme Court refer to a “night club” as the property’s usage.

Mr Collie and Alco Holdings, though, asserted that the May 18, 2021, payments resulted from their “acceptance of one of two settlement options offered to it by staff at the Department of Inland Revenue” under the Government’s real property tax amnesty that was announced earlier this year.

Under the first option, which involved writing-off 50 percent of the unpaid tax and associated penalties if payment of the remaining balance was made upfront - and in full - by May 31, 2021, Alco Holdings would have slashed its liabilities in half to $736,217. 

And the second, involving a 25 percent downpayment with the balance to be paid off over an agreed period, would have resulted in the write-off of $632,911 in unpaid surcharges, according to the judgment. The real property tax amnesty has now been extended to end-August.

The treasurer, though, argued that what Alco Holdings claimed was a settlement offer was really just “a calculation worksheet” provided to all taxpayers making inquiries on their payments and outstanding liabilities.

It also alleged that Mr Collie’s company had “surreptitiously sought to take advantage of the amnesty even though its ongoing court case meant it cannot qualify. The businessman was also said to have approached the Department of Inland Revenue staff directly for the concession, and did not speak to Ms Strachan, the chief valuation officer.

Although Alco Holdings had taken the position it would “not pay the full amount of the outstanding judgment debt” of $1.357m, on the basis that it had reached a settlement with the Government, Justice Winder said he was “not satisfied” any deal had been agreed.

“Firstly, it is unbelievable that Alco, being engaged in contentious litigation with an approaching court date for enforcement against it, would be engaging a staffer at the Inland Revenue Office negotiating a compromise for the settlement of the judgment,” Justice Winder blasted.

He also agreed with the treasurer that the evidence relied upon by Mr Collie and his company was not a settlement offer or options, but merely an inquiry related to the amnesty initiated by the Government.

Justice Winder said it was “an untenable proposition” that this was a settlement offer, especially since the Elizabeth Avenue property - on which taxes were due and owing - was not included in the alleged deal. Alco Holdings had alleged there were “discrepancies” over the Government’s tax claims on that property that had yet to be resolved.

Denying Alco Holdings’ application for a stay, Justice Winder gave it until end-September to pay the $734,222 or otherwise the treasurer could sell the West Bay Street property to satisfy the unpaid real property tax debt. He said it needed to be appraised and listed by court-approved realtors, but the sale does not involve the Elizabeth Avenue property.

There are some signs that the Government is now starting to go after high-profile real property tax delinquents owing multi-million dollar sums to the Treasury. Apart from Mr Collie, it has also obtained a a Supreme Court order compelling the sale of a downtown Bay Street property to settle a near-$2.2m property tax debt owed by the Finlayson family.

However, some observers will argue it still barely makes a dent in the $600m-plus property tax arrears identified by the Auditor General.