Gov’t fails in strike-out bid on oil terminal land

• Rival claim to 180 South Riding Point acres survives


Tribune Business Editor


The Government’s bid to strike out a rival ownership claim to 180 acres of land that is now sub-leased to a major foreign investor was this week dismissed by the Supreme Court.

Justice Petra Hanna-Adderley, in her August 2, 2023, verdict found that John Russell’s claim to land that is now part of the Grand Bahama oil storage terminal formerly owned by Equinor is “not an obvious case” to be struck out given that it has raised “issues fit to be tried” by the judicial system.

The Attorney General’s Office, representing the Bahamas Agricultural and Industrial Corporation (BAIC), which sub-leased the South Riding Point property to the oil storage terminal’s operator in 2013, had argued that the action should be dismissed because it is “an abuse of process” plus “hopeless and doomed to failure”.

Its representatives also asserted that Mr Russell, while asserting that a fraud had been perpetrated, did not “specifically plead” this in his legal documents, and that his claim was statute-barred because it was filed outside the timeframe stipulated in the Limitation Act.

Mr Russell, as the purported heir-at-law to William Russell, is alleging that he is the rightful owner of the 180-acre tract by virtue of a January 17, 1827, Crown Land grant to his ancestor that is recorded in the Registry of Records. He claims that the Crown then violated his ownership rights by leasing the same property to BAIC on March 13, 1981, with the agency subsequently sub-leasing it to South Riding Point’s operator in 2013.

While there is no guarantee that Mr Russell will prevail, Justice Hanna-Adderley’s verdict raises several questions. Not least of these is whether the claim was detected, and scrutinised, during the recent commercial negotiations and due diligence that resulted in Liwathon Group, the logistics operator that runs four petroleum storage facilities in Estonia, acquiring South Riding Point from Equinor. The deal closed in February this year will all necessary government approvals.

Mr Russell’s claim has thus survived its first challenge, although it will now face many more when it comes to the substantive hearing and trial for this is when the evidence will be fully tested. Justice Hanna-Adderley also apologised “profusely” for the fact it has taken two-and-a-half years to render her verdict after the hearing was held on February 11, 2021.

“He claims that all or part of that same tract was leased by the Crown to the defendant, who subsequently sub-leased it to Statoil South Riding Point by lease dated some time in 2013,” the judge wrote of Mr Russell’s case. “He is therefore claiming, among other things, that the defendant [BAIC] knowingly practiced deceit on Statoil in granting the lease and is interfering with his property rights.

“He claims an order for possession, damages and an injunction prohibiting the defendant from continuing to do anything with or on the property.” Kenria Smith, acting for the Attorney General’s Office, argued that the action was “an abuse of the process of the court” because Mr Russell had failed to produce evidence that a document was “forged” or identify anyone who had knowledge of the alleged “deceit”.

She added that he knew the subject property was occupied as far back as 1981, when Burmah Oil, one of Statoil’s predecessors, placed oil storage tanks on the land. As a result, Ms Smith argued that Mr Russell had “slept on any rights he thinks that he may have had” because the Limitation Act required that he bring an action to recover the property by 1993, yet he had only initiated the case on April 29, 2019.

As a result, the Attorney General’s Office argued that “the proceedings are hopeless and doomed to fail”. But attorney Edmund Russell, representing Mr Russell, argued that because the Crown grant was “first in time” to be recorded in the Registry of Records it gave his client superior title that “cannot be defeated by the alleged unrecorded Crown Land lease to BAIC”.

And the same Crown grant also “takes priority” over the unrecorded lease made between BAIC and Statoil on October 21, 2009. Mr Russell’s attorney also argued that BAIC was “never in exclusive possession and sole occupation” of the disputed real estate, and was not claiming ownership by adverse possession.

Rejecting the Government’s strike-out bid, Justice Hanna-Adderley said of Mr Russell’s action: “The statement of claim is plainly pleaded. That the plaintiff claims to be the heir-at-law and true owner of the subject property since 1827; the facts as we know them at this stage do not disclose how the Bahamas Development Corporation, predecessor to BAIC, became vested with the title.

“The claim is that neither the Bahamas Development Corporation nor BAIC has no right title or interest to the property, and cannot lease it to anyone. The defendant cannot say that it is taken by surprise by the plaintiff’s claim.” With the case not having yet reached the stage where the evidence is to be examined, Justice Hanna-Adderley found that it “does disclose a reasonable course of action and/or raises some question fit to be decided by this court”.

Dismissing the Government’s argument that the action is “frivolous and vexatious”, she also rejected the argument that it is barred by the Limitation Act. “There is no evidence to show how the Crown was able to lease the same land to BAIC if the Russell grant is valid,” Justice Hanna-Adderley added. “No doubt this will become clear with the disclosure of more evidence.”

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