By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The late Sir William Allen’s estate has persuaded the Supreme Court to slash unpaid loans allegedly owed to a prominent Bahamian businessman by some $66,000.

Justice Ian Winder, in a January 13, 2022, ruling, found the amount of interest claimed by Tony Myers, who previously held leasehold rights to Ocean Cay for aragonite mining before it was taken over by Mediterranean Shipping Company for its private cruise port, exceeded the limits permitted by Bahamian law.

Finding that the $66,000 amounted to an “effective annualised interest rate of 70.29 percent” against the former Bahamian finance minister’s estate, when the maximum allowed was 20 percent, Justice Winder struck our Mr Myers’ claim for this sum. And he also removed Sir William’s son, Andrew, an attorney and prolific letter writer to the newspapers, as a defendant.

However, Justice Winder declined the estate’s bid to strike out Mr Myers’ entire action, instead limiting his claim to just the $144,000 principal allegedly still owed and ordering that he file an amended claim within 21 days.

Mr Myers, when contacted by Tribune Business last night, said he had been unaware that the Rate of Interest Act imposes a maximum 20 percent rate on loans exceeding $100. Any higher rate is treated by the Act as “null and void”, and any proceedings to recover such a loan are treated as unenforceable by the courts.

“I never realised that the law in The Bahamas allowed that interest rates which exceeded a certain amount could be disqualified,” he added. “It doesn’t exist in too many other places. It seems less free market, but it’s fine. It is what the law is.”

He added that he was “still proceeding” with the litigation against the ex-finance minister’s estate, and said: “The way the loans were structured were not oriented towards interest. It’s just the way Sir William and I had done business for many years.....

“It’s a real shame because Sir William and his wife are fantastic people. What’s sad is that Sir William and I were really good friends for many years. We did many investments together, and I helped him out for 20 years in many, many ways and, at the end, he was unable to meet many of his obligations.”

Justice Winder’s judgment reveals that Mr Myers initiated legal action to enforce a $210,000 promissory note signed by Sir William and his son on July 5, 2012, where they purportedly promised to repay the monies by February 28 the following year.

Despite “numerous demands for payment of the sum due”, the full amount allegedly remained outstanding. The promissory note pledged to repay the $144,000 principal, plus $66,000 in interest, from the sale of Crab Cay, a 163-acre island north of Green Turtle Cay in the Abacos.

The judgment is silent on whether the land sale was concluded, but Justice Winder noted that Mr Myers did not “seriously challenge” evidence produced by Sir William’s estate that the $66,000 interest violated the maximum allowed under the Rate of Interest Act.

The estate showed that the “pure interest rate” generated by the promissory note was 45.83 percent, while the effective annualised interest rate was 70.29 percent. This compared to the 20 percent maximum allowed under the Act.

While noting that Mr Myers’ claim could be struck out as “frivolous and vexatious” for breaching the Act, Justice Winder said courts should first seek to amend such actions - as the businessman had attempted to do - by suing only for recovery of the $144,000 sum contained in the loan agreements themselves.

Mr Myers’ amended claim said the $144,000 was advanced in small sums between September 8, 2008, and October 13, 2011, and they were provided “without any agreement or otherwise as to interest”. He added that the $66,000 was “offered by Sir William as a means of reward for his forbearance”.

Andrew Allen was removed as a defendant as he only signed the promissory note to help his father, and none of the loan proceeds went to him. Justice Winder said Mr Myers’ action may also be statute-barred by the Limitation Act, as it had started out of time, but there was “some evidence” to suggest the debt had been acknowledged and to support an extension.