By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A landlord’s bid to prevent its Cable Beach restaurant tenant from becoming “land-locked and inaccessible” to customers has backfired after the Supreme Court rejected its claim to ownership of a key asset.

Sir Ian Winder, the chief justice, rejected efforts by the Social House’s landlord to obtain a title certificate for the restaurant’s 7,337 square-foot parking lot and instead ruled that the Government is the rightful owner.

His January 12, 2023, verdict also revealed that landlord Mortgage Holdings Ltd, a company owned by the late Heinz Wszolek’s family estate, had for several decades been paying real property tax on a parking lot it did not own. This, though, was counter-balanced by the landlord and its various restaurant tenants having enjoyed the use of real estate the former had no right to for the same time period.

The Government, via Brian Bynoe, acting surveyor-general in the Department of Lands and Surveys, and Charles Zonicle, director of physical planning, successfully argued that the Social House’s parking lot had always been reserved for the expansion of public roads and had to be kept for “future improvements”. A notice of possession, and declaration of vesting, dating from late 1977 were produced to confirm the property was owned by the Bahamas’ treasurer.

The chief justice, though, criticised the failings that had resulted in Mortgage Holdings and the late Mr Wszolek for decades paying real property tax on land they did not own. “It is regrettable that Mortgage has been paying, and the Crown collecting, real property tax on the subject property for a considerable period,” Sir Ian wrote.

“Notwithstanding the breadth of the Government, its respective arms need to better work together to avoid such conflicts. The flip side, obviously, is that Mortgage has had use of the property during the period without paying any compensation.”

Sir Ian’s ruling carries potential negative consequences for both landlord and the Social House, as well as any future tenants. Loss of the parking lot as an asset/amenity will undermine the site’s value as a retail or dining location if guests are unable to easily access it, while the Social House’s business model would face severe disruption if the Government insists on its ownership rights and demands that all other parties vacate.

Representatives for Mortgage Holdings Ltd declined to comment yesterday on the basis that they have yet to discuss Sir Ian’s verdict, and the potential fall-out, with their attorneys. Dino Berdanis, the Social House’s general manager, told Tribune Business that loss of the parking lot’s use by his clients “would be a problem” but added that much depends on what the Government decides to do in moving forward.

Unaware of Sir Ian’s verdict until informed by this newspaper, he said of the potential parking lot loss: “Obviously it would be a big problem for us. Parking is something that the restaurant needs for sure. We’ll have to inquire as to what is happening with our landlord. My position is it obviously wouldn’t be a good thing for our business.”

All is not lost for the Social House and its landlord. Mortgage Holdings Ltd has the option to appeal Sir Ian’s decision, and one likely outcome is that it could work out a deal with the Government to lease the parking spot from it for the benefit of its restaurant tenant.

Parking in that area of Westward Villas, which lies 130 feet south of West Bay Street, or the lack of it is understood to have been a consistent issue. It is understood nearby residents have complained about clients of multiple businesses in the area, which include a Starbucks and the Italian restaurant, Capriccio, as well as the Social House, parking vehicles alongside their walls and blocking their entrances.

The Social House, which specialises in sushi, frequently attracts an upmarket crowd from across New Providence featuring both Bahamian professionals and expatriates. “It’s a popular spot. They’re always busy,” one source said of the restaurant. “I was there the other night and the parking was just crazy with all the people in the Social House, Starbucks and Capriccio. 

“This [the ruling] could really hurt their business. They’ve potentially got a problem. They’ve got a real problem. It will be interesting to see what they do.” A nearby resident, speaking on condition of anonymity, said that if the Government decides to block use of or access to the present parking lot “they won’t be able to operate. It’s impossible.

“But I don’t think the Government will strong arm them and say you can’t park there by Friday. It’s a very busy and popular site. It’s been many things, including a sandwich bar. This one has been the most successful and busy restaurant.” Previous tenants at the Social House site include another popular haunt of the past, Indigo Cafe, plus the Pot & Cake Restaurant.

Mortgage Holdings initiated the events leading to Sir Ian’s ruling when it filed its May 17, 2018, petition to “quiet” the title to the parking lot - and subsequently obtain a certificate of title - via the Quieting Titles Act. That law requires petitioner’s to advertise their intent publicly, so that persons with rival ownership claims can contest it, and this prompted the Government’s “adverse claim” on January 12, 2021.

Chantelle Euteneuer, the late Mr Wszolek’s daughter, in her capacity as Mortgage Holdings’ president, said the company acquired the property now housing the Social House on July 26, 1983. “Mortgage Holdings has always rented lot number two to restaurants, and the current tenants are the owners of Social House restaurant,” she asserted.

“Social House and past tenants have always used the above-captioned property as the parking lot for the business, which would otherwise be land-locked and inaccessible from the road.” Mrs Euteneuer said Mortgage Holdings had always maintained the parking since the acquisition in 1983.

And “since December 9, 2004, Mortgage Holdings has regularised all real property tax payments” for the parking lot, with no one else using the property without its permission or a lease agreement. She was backed by Brett Lashley, a Central Bank deputy currency manager, who testified that he had always known the site to be used as a restaurant during the 21 years he resided at Skyline Heights.

Mortgage Holdings, in its written submissions, argued that it was “immaterial” that the Government claimed the parking lot to be reserved for a road when it and its tenants have enjoyed “uninterrupted use” for more than 30 years. That is now in its 40th year, and Mortgage Holdings alleged that the Limitation Act 1995 prevented the Government from bringing its rival claim.

That Act stipulates that the Government must bring legal action to recover land within 30 years of “the right to action”. Mortgage Holdings alleged this 30-year period expired when it filed its Quieting Titles petition on May 17, 2018. However, Sir Ian found that because it took possession of its property in 1983, the Limitation Act 1995 was not yet in effect and therefore does not apply to this case.

Instead, he ruled that the Real Property Limitation (Crown) Act 1873 was the relevant legislation. This gave the Government some 60 years, or until 2043, to bring its rival claim which thus fell well within the legal limit. As a result, Mortgage Holdings position was dismissed.