By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Supreme Court has paved the way for the Grand Bahama Port Authority (GBPA) to “repossess” the Royal Oasis casino and nearby parking lot over $1.2m in unpaid service charge debts.

Justice Petra Hanna-Adderley, in an August 22, 2025, verdict ruled that Freeport’s quasi-governmental authority and its Freeport Commercial and Industrial affiliate are “entitled to re-enter” and seize control of both sites unless the rundown resort’s owner, Harcourt Development, pays off the service charge arrears in full.

And she affirmed that the Irish-headquartered property developer’s failure to pay, which dates back to 2008 - the year after it acquired the Royal Oasis property - means both the GBPA and Freeport Commercial and Industrial are “entitled to a declaration” that all of Harcourt’s “rights, title and interest” in the two land parcels have been “extinguished” as if its purchase never happened.

Justice Hanna-Adderley’s ruling has emerged at a critical and sensitive time for many of the parties involved, as well as the Government’s ambitions for Freeport. With Harcourt thought to be seeking an exit route from its Grand Bahama investments, the judgment effectively means it will now need to pay an extra $1.2m to maintain ownership of the whole Royal Oasis property and clear the way for its sale.

One potential buyer appears to be the Government. The 2025-2026 Budget again sets aside $1m in the Ministry of Grand Bahama’s capital budget for the “acquisition of Royal Oasis”, although not a single cent of the same sum - allocated for this purpose in the prior 2024-2025 fiscal year - had been spent as of March 2025. A further $1m has also been provided for “West Sunrise Highway” in 2025-2026.

The Supreme Court verdict’s effect is that the Government may now have to deal with the GBPA, as well as Harcourt, if it wishes to acquire the Royal Oasis should the former “repossess” the derelict casino site and parking lot. This, ironically, comes as the GBPA and the Government today enter the third day of the two-week arbitration over the latter’s demand that Freeport’s governing authority pay it $357m.

Any Royal Oasis deal is likely linked to the Davis administration’s bid to acquire the nearby International Bazaar site for its much-touted Afro-Caribbean Marketplace. It was confirmed earlier this year that the GBPA had agreed to write-off 50 percent of the service charge debts owed by the Bazaar’s owners - the same charges that it is seeking to collect in full from Harcourt.

Justice Hanna-Adderley, detailing the GBPA and Freeport Commercial and Industrial case in an action which was filed with the Supreme Court eight years ago in 2017, said it related to Lot 11M and Lot 2B of ‘Block M’ in Freeport’s central area. The former is the site of the Royal Oasis casino, and Lot 2B the location of the parking lot behind it.

“The claimants [GBPA and Freeport Commercial and Industrial] contend that despite their lawful demand over the years the defendant [Harcourt Resorts Bahamas] has failed to pay long overdue arrears of service charges on land which was conveyed to it, and that they are now entitled in law to payment of the arrears or immediate possession of the land to which the service charges attach,” the judge wrote.

“According to the claimants, the Lot11 M (casino) service charges due and payable stand at $1.111m as at August 24, 2023, and the Lot 2B service charges due and payable stand at $52,415 as at August 24, 2023. The balance on both accounts is continuing to grow.”

The Royal Oasis complex has now been shuttered for more than two decades, having been closed in September 2004 following damage inflicted by Hurricane Frances some 21 years ago. It has never re-opened under Harcourt’s ownership, the Irish developer having acquired the resort in 2007 from Lehman Brothers Holdings, only for the 2008-2009 recession to sink its redevelopment plans.

However, Harcourt Resorts Bahamas challenged the GBPA and Freeport Commercial and Industrial claim on multiple grounds while asserting it was “invalid”. The Royal Oasis owner argued it had never been informed that the right to collect service charges, and enforce remedies for non-payment, had been assigned to the GBPA thereby “disentitling” it from “bringing proceedings in its name”.

And, even if the right to collect arrears had been correctly assigned, this did not include the right for the GBPA and its affiliates to re-enter and repossess the land. Harcourt Resorts Bahamas also alleged it “would be wholly inequitable to grant the full arrears” claimed because many of the services the charges were supposed to finance had not been provided to it. It also alleged the claim was statute-barred.

Several senior GBPA executives, including Karla McIntosh, its vice-president of legal affairs; Gwenique Musgrove, the financial controller; and Dwight Malcolm, collections manager for its Port Group Ltd affiliate, gave evidence during the trial. The casino lot covers 2.493 acres, while the parking lot is spread over 1.234 acres.

“Under cross-examination, Miss McIntosh’s evidence is that the first claimant, as regulator, is responsible for the maintenance of the city of Freeport as a whole within the 235 square miles,” Justice Hanna-Adderley wrote. “It paves roads. It cuts verges. It deals with street lights. It picks up trash. So generally, it maintains Freeport, the Port area...

“That there have been complaints received from property owners within the Port area about the lack of maintenance and upkeep. That the first claimant [GBPA] maintains the city based on the amount of funds that are available to do it. That in a perfect world everything would be done, but the claimant can only do as much as it can with the resources that it has.”

The GBPA executives said the service charges are indexed to inflation, meaning they rise in line with cost of living increases. The Royal Oasis casino’s billing was linked to the Bahamian retail price index, while others were tied to the US cost of living index. The casino parcel’s service charge had risen from $36,000 in 1983 to $92,745, inclusive of VAT, some 40 years later.

Mr Malcolm also detailed “his interaction” with Donald Archer, former chief executive and president of Harcourt Resorts Bahamas, “who on September 18, 2012, indicated that the defendant intended to address the issue of the outstanding service charges when the resort was either re-opened or sold.

“He chronicled the requests for ‘write-offs’ and reduction of service charges by the defendant, and the offers of substantial discounts, none of which was taken advantage of by the defendant,” Justice Hanna-Adderley noted.

Mr Archer, who was Harcourt’s main trial witness, said the developer had challenged the “exorbitant service charge” on the casino land parcel only to be told that it was high to compensate for the fact there were no hotel or casino taxes in Freeport at that time.

He recalled the “significant damage” and Hurricane Frances-enforced closure of 2004, and Justice Hanna-Adderley wrote: “The casino and hotel remain closed to-date despite numerous attempts at repairing all damage. Attempts at re-opening the hotel or finding a suitable buyer for the same have also been unsuccessful as the economy in Freeport has yet to improve significantly.”

Mr Archer said Harcourt “does not deny” service charges are owed, but added that it disputes the sum claimed. He asserted that the developer “has been put at a significant disadvantage of not having the income to pay for the exorbitant service charge unfairly levied” by the GBPA because the casino has been closed for more than 20 years.

He added that the service charge gas never been decreased to reflect “the economic impact of the hurricanes” and, instead, has undergone a series of increases leading Harcourt to “dispute the amounts levied and question the validity of the service charge levied”.

Mr Archer, though, said the $107,000 service charge arrears accumulated by Lehman Brothers Holdings and the resort’s operator, Driftwood Hospitality, were paid in full when Harcourt acquired the Royal Oasis in 2007. The former Harcourt Resorts Bahamas chief disagreed with Robert Adams KC, the Delaney Partners attorney, who said the payment showed it knew service charges were due and owing.

And he confirmed that Harcourt had failed to take advantage of the GBPA’s offer of a 20 percent service charge discount, having written to Ian Rolle, the GBPA’s president, on January 13, 2010, requesting that the be totally waived until the Royal Oasis hotel and casino components became operational. At that stage, the sum owed was $118,450.

However, Mr Archer also argued that the GBPA’s claim was statute-barred due to the six-year “limitation period”, as it was aware of Harcourt’s “inability to pay” from 2008 and only took legal action in 2017. And he reiterated that the service charges imposed on the two lots were “unequal to market value and/or unequal to service charges billed on similar lots within the subdivision”.

Justice Hanna-Adderley, in her verdict, agreed with the GBPA that the service charges are “rent charges” that are bound to and “run with the land”. And she ruled that the right to collect, and enforce, the service charges had been assigned to both the GBPA and Freeport Commercial and Industrial by previous conveyances that transferred ownership of the two Royal Oasis lots.

The constant back-and-forth between the GBPA and Harcourt, discussing discounts and waivers, as well as demands for payment showed that Harcourt Resorts Bahamas knew it was obligated to make the payments, the judge added.

And, while there was “some evidence” that the GBPA and Freeport Commercial and Industrial did not provide the promised services, Justice Hanna-Adderley ruled that full payment of the charges was not contingent or conditioned on this happening.

She also found that the claims were not statute-barred, ruling that the limitation period for such an action “based on instruments under seal” is 12 years and the clock started running on this from 2008 when Harcourt’s failure to pay began. Thus the 2017 filing was well within the time limits, leading Justice Hanna-Adderley to reject Harcourt’s defence.