The Tribune

• Judge blasts ‘scandalous’ draft defence

• Never disclosed representing buyer too

• Sisters get default judgment go-ahead

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Twin sisters have been given permission by the Supreme Court to enter a default judgment against a Bahamian attorney whose “negligence” cost them their Harmony Hill condominium.

Justice Indra Charles, deftly describing the dispute involving Petrona and Petula Russell as “an unfortunate case”, found that Anthony Thompson - who they hired to represent them in selling the property - had no “genuine answer” or defence to their claims for breach of contract and breach of fiduciary duty.

In a scathing April 26, 2021, verdict, she struck out Mr Thompson’s draft defence as “scandalous, frivolous and vexatious”, finding that it was “no more than a vexatious and oppressive attempt by him to use the court’s machinery for an improper purpose”.

And, for good measure, Justice Charles made a similar finding against Cleopatra Thompson, the buyer of the Russells’ condominium, who defaulted on both the purchase price and mortgage repayments to FirstCaribbean International Bank (Bahamas) despite having taken possession of the property in May 2017.

Justice Charles’ judgment did not say if Mr Thompson and the purchaser are related by family, even though they share the exact same surname, and Tribune Business inquiries on the issue yesterday proved fruitless. 

However, Ms Thompson’s draft defence did admit that the attorney who shared her name failed to inform the Russell sisters that he was also acting for the buyer, meaning that he was representing both parties in the same transaction and opening up the possibility for conflicts of interest to arrive.

The sisters, who had acquired their condo at Harmony Hill’s Country Club Estates in 2011 via a 25-year FirstCaribbean mortgage, hired Mr Thompson to represent them in selling the property after they were both accepted to attend Saint Mary’s University in Halifax, Canada, in November 2015.

Justice Charles noted that they discussed with Mr Thompson, whose law firm bears his name, “the prospects of selling the Property prior to their relocation”. In particular, the twins sought legal advice as to whether they would be able to recover the equity value they had “injected into the mortgage”.

After agreeing to help with the sale, there was a “verbal retainer agreement” that Mr Thompson would market the condo, deal with all buyer inquiries, liaise with the bank and also sell the sisters’ furniture. To ensure the mortgage remained in good standing after they left for Canada in August 2016, the Russells’ made several months worth of payments to cover the rest of that year.

Mr Thompson, on April 2017, advised the duo that Cleopatra Thompson had emerged as a potential purchaser and proposed that the deal be structured as an “equity of redemption” transaction. This required Cleopatra Thompson to pay the twins $14,000 for the equity they had built-up, and to take over the mortgage payments to FirstCaribbean.

The $14,000, guaranteed by a promissory note, was to be paid in monthly installments and completed within six months. The Russells accepted the offer, but Justice Charles said the promissory note drawn up by Mr Thompson “did not satisfy the requirements of the Bill of Exchange Act 1882” because it contained no start or completion date or the amount of the installment payment.

Problems began from mid-2017 onwards, when the Russells complained about the absence of a payment schedule and sought an update from Mr Thompson on the payments that should have been received from the buyer.

Mr Thompson promised on January 12, 2018, that the buyer will pay “the outstanding mortgage next week, and payments will also be made to reduce your balance”. The twins then urged him, in February and March 2018, to initiate legal proceedings against Cleopatra Thompson for default and non-payment in his role as their attorney, but Mr Thompson took no action.

“To cut a long story short, the mortgage installments were not paid on time. In fact, only two payments were made,” Justice Charles wrote. “In July 2018, the bank stepped in as the mortgage repayments were 480 days past due. Vacant possession proceedings had begun.

“The bank informed the plaintiffs that it was not aware of the conveyance, nor did it recognise such a sale of the bank’s assets. In August 2018, the plaintiffs [the Russells] agreed to give the bank vacant possession to avoid proceedings being commenced against them by the bank. The plaintiffs were forced to turn over the property to the bank.

“The second defendant [Cleopatra Thompson] failed to provide consideration for the purchase of the equity of redemption, and breached the obligation to pay notwithstanding that she had been in possession of the property since May 2017.”

Armed with the Lennox Paton law firm as their new attorneys, the twins launched legal proceedings against both Mr Thompson and the buyer. Both sought an extension of time to file their defences, which the sisters resisted while urging that they be thrown out because they disclosed “no reasonable cause of action”.

Justice Charles elected not to dismiss Mr Thompson’s defence for its failure to comply with Supreme Court rules, as the attorney “insisted” there was never an agreement or retainer for him to provide legal services to the Russells over the transaction.

She, though, found that there were multiple documents to support that there was “an implied retainer” in effect, including a letter from Mr Thompson to FirstCaribbean on his firm’s letterhead saying he had been “instructed” by the twins. He also submitted the conveyance for the transaction to the Registry of Records

The Russells’ new attorneys argued that it was “beyond doubt” that Mr Thompson had been hired by them, and that his defence was “just a tactic to delay the inevitable” - a finding with which the judge agreed.

“I therefore agree with the plaintiffs that the application of the first defendant is no more than a vexatious and oppressive attempt by him to use the court’s machinery for an improper purpose,” Justice Charles found of Mr Thompson.

“Applying the law to the pleadings and evidence (documentary) presented thus far, I find that the draft defence of the first defendant discloses no reasonable cause of defence, is scandalous, frivolous and vexatious, and it may prejudice, embarrass and delay the fair trial of the action and is otherwise an abuse of the process of the court.

“Also, in my judgment, the draft defence of the first defendant has no reasonable chance of success and ought to be struck out.” Mr Thompson is no stranger to controversy surrounding real estate deals, having played a key role in the Oceania Heights debacle in Exuma, where he acted for a developer who ultimately had his permanent residency revoked after a series of Tribune Business revelations.

Justice Charles, meanwhile, also reached a similar conclusion regarding Cleopatra Thompson’s defence, finding she had admitted to defaulting on the mortgage. Her defence, too, was thrown out and the Russells given permission to bring a default judgment that will likely seek thousands of dollars in compensation.