By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Bahamas' former top environmental regulator can no longer prevent his Shirley Street gas station's seizure by the Bank of The Bahamas' bail-out vehicle because he failed to pay a $1.75m security.

Court of Appeal president, Jon Isaacs, revealed in a July 4, 2024, oral ruling that Dr Donald Cooper, the ex-Bahamas Environment, Science and Technology (BEST) Commission chief, failed to pay the required sum "into court" within the 28 days stipulated by an earlier ruling on May 2029.

Referring to Dr Cooper and his company, DLC Investments, he said: "The intended appellants were given the opportunity to meet the requirements stipulated by the court. They have failed to do so. The court indicated the consequence of failure, which is that the proposed appeal would be dismissed.

"In the circumstances that counsel has admitted that the $1.75m was not paid within the 28 days stipulated by the court, the appeal stands dismissed." Dr Cooper and his firm had originally sought extra time in which to appeal a Supreme Court order granting Bahamas Resolve "vacant possession" of the Rubis-branded gas station on Shirley Street, which had been pledged as security for a delinquent loan.

The gas station in question, located just west of the Mackey Street and Shirley Street junction, was fenced in and secured by workmen just prior to the Christmas holidays and is now a construction site. The loan to Dr Cooper and DLC Investments was among the 13 'bad borrowers' transferred to Bahamas Resolve as part of the first $100m taxpayer-funded Bank of The Bahamas bail-out in 2014.

The Court of Appeal, in its May 29, 2024, ruling requiring that Dr Cooper and his company lodge the $1.75m as security, noted that this sum was less than half the $4.6m that Bahamas Resolve claimed to be owed on the delinquent loan.

The unanimous verdict, written by appeal justice Indra Charles, noted that the gas station was initially mortgaged to Bank of The Bahamas on July 26, 2005, with Mr Cooper acting as guarantor. It was transferred to Bahamas Resolve on August 30, 2017, and the Court of Appeal affirmed: "The mortgage loans were defaulted on."

This led to Bahamas Resolve initiating legal proceedings for vacant possession so that it could exercise its power of sale to dispose of the property and recover the mortgage debt. The necessary Order was granted by Supreme Court justice, Loren Klein, who delayed its implementation by 21 days to enable Mr Cooper and his company to satisfy the $4.955m debt.

This was never done, and the Order was perfected on May 11, 2021. "Since the date of the Order, the intended appellants have not paid the mortgage debt or any part thereof," the Court of Appeal added. Mr Cooper and his company sought to explain the "significant delay" in filing the appeal through the death of their former attorney and delays in obtaining the Supreme Court transcripts.

However, Bahamas Resolve argued that the appeal should not move forward unless a sum equal to the mortgage debt was paid into court as a security - something that is a standard practice in such disputes. Mr Cooper's attorney, Jairam Mangra, argued before the Court of Appeal that there had been "serious irregularity" with accounting for the mortgage sum and what was owed.

However, appeal justice Charles wrote: "In our opinion, the arrangement with Bank of The Bahamas is no different from the bank providing a mortgage to a mortgagor of a commercial property. The bank takes an assignment of the rent as security, so that in the event of default by the mortgagor, the rent is then paid over to them as mortgagee.

"In similar vein is the licence which DLC had from Rubis Bahamas to operate a gas station. In the event of default, the licence, assigned to the mortgagee, can be executed upon. As counsel for Bahamas Resolve properly alluded to, this is normal everyday practice in banking and mortgage lending.

"There is therefore nothing special or magical in this case about the assignment of the lease and the assignment of rents. Moreover, the fact that these assignments were in place did not mean that the bank was collecting monies directly from the oil or gasoline supplier," she added.

"It was simply there to protect the mortgagee in the event of a default by the mortgagor. And, to the extent that there is an assignment of a payment, it does not mean that the bank steps into the shoes of the mortgagor at all."

The Court of Appeal also rejected Mr Mangra's argument that it would be "unfair and draconian" to require Mr Cooper and DLC Investments to pay a $1.75m security due to "the gross irregularity that they assert has occurred". They had offered Bahamas Resolve some $1.75m to settle the debt on April 15, 2021, but appeal justice Charles found this argument "devoid of merit".

"If the intended appellants believed that there was discrepancy in the accounting and they owe less or no money on the mortgage debt, they ought to have counter-claimed or proceed with their writ action in a timely manner. To date, it has not been progressed very far," appeal justice Charles found.

"If a mortgagor seeks to challenge the mortgagee’s security or his right to exercise his remedies under the mortgage document, the mortgagor must first tender to the court the amount of the mortgage debt or otherwise secure it.

"The intended appellants have not done so and Bahamas Resolve is out of pocket in a sum in excess of $4.6m, excluding interest and costs, which continue to accrue as they continue to launch applications in the Supreme Court and this court," she said.

"In the circumstances, we accede to Bahamas Resolve's application that the intended appellants pay into court the sum of $1.75m, noting that this is not the entire claim but an amount that they were willing to put forward, within 28 days hereof failing which the application for extension of time and, consequently, the proposed appeal will stand dismissed. We will deal with the issue of costs on the adjourned date."

Mr Cooper and DLC Investments failed to make the payment by the required date. John Wilson, KC, the McKinney, Bancroft & Hughes attorney and partner, represented Bahamas Resolve.