A B.C. company’s ultra-luxury resort in one of the world’s most sought-after destinations may now continue following an international legal battle between the site’s former U.S. owner and the government of Antigua.
The Supreme Court of British Columbia has dismissed a lawsuit that alleged Vancouver-based Replay Resorts Inc. was “unjustly enriched” by its acquisition of the multimillion-dollar island property in Antigua.
H.M.B. Holdings Ltd. (HMB) had claimed Replay Resorts conspired with the Caribbean country’s government to expropriate, at a steep discount, a multimillion-dollar waterfront property owned by HMB.
A court order provided to Business in Vancouver states that an application to dismiss a notice of civil claim against Replay Resorts and Freetown Destination Resort Ltd. was allowed on August 20.
BIV was told reasons were published in mid-September. The claim against a third defendant – Half Moon Bay CIP Management Inc. – was dismissed in July.
In 2015, Replay bought the lucrative land formerly owned by HMB from the Antiguan government for a reported US$23 million – more than a decade after the government lawfully expropriated the property from HMB.
Replay, which was founded in 2007 by former executives of Intrawest Corp., has blamed ongoing legal issues for challenging its efforts to market and sell exclusive seven- and eight-figure residences and beachfront lots to high-net-worth jet-setters.
Natalia Querard, HMB’s managing director, has launched legal proceedings in Canada, the United States and Antigua in an attempt to recover the millions HMB claims it is owed by the government of Antigua, which expropriated HMB’s lucrative Half Moon Bay property in 2002.
Fifteen years after losing the land, HMB launched a lawsuit against Replay for punitive damages and a declaration that Replay has been “unjustly enriched” through its alleged conspiracy with the government of Antigua. Replay filed a counterclaim for punitive damages and a permanent order barring HMB from seeking any relief in BC Supreme Court against Replay.
Querard also sought a garnishing order against the government of Antigua, and applied for a pre-judgment garnishing order against Replay.
A B.C. judge had granted a $30.2 million order against Antiguan Replay subsidiary Freetown Destination Resort by default, when the government of Antigua failed to respond to HMB’s claim.
In a written statement emailed to BIV through a lawyer at McCarthy Tétrault LLP, the chief financial officer of Replay Management Ltd. – Replay Resorts’ parent company – said the BC Supreme Court has upheld Replay’s right to sue Querard personally for damages that result from HMB’s lawsuit.
Lawyer Paul Jorgensen claims HMB’s allegations intend to cause harm to Replay and maintains that HMB’s litigation over compensation with the government of Antigua “has nothing to do with our company.”
“Replay is known worldwide as leaders in destination creation and real estate development, and we will vigorously defend against these baseless allegations,”a statement reads.
The resort at Half Moon Bay is Replay’s first project in Antigua, according to its website, which features eight other properties in destinations that include Hawaii, Arizona and Mexico.
HMB’s conspiracy action, now dismissed, claimed the government “continually failed” to compensate HMB for the land it seized, and “therefore breached its fiduciary duty owed to the plaintiff” under the country’s constitution. HMB further claimed the defendants “were wilfully blind” to and “participated in or assisted” the government’s breaches.
In July, the BC Supreme Court found that the notice of civil claim against Half Moon Bay CIP Management Inc. failed to disclose a reasonable cause of action, and did not contain a bare minimum of material facts to support a conspiracy claim – in this case, that the defendants agreed to structure the purchase of the resort property to their unlawful benefit.
The reasons for judgment also noted that HMB remains entitled to the compensation it is owed by the government of Antigua, and that its conspiracy claim “has had no effect on HMB’s entitlement.” The court additionally called HMB’s suit and the damages it sought a “veiled collateral attack” on an order from Antigua’s highest court, which had established the value of the expropriated property, and an abuse of the process of the court.
A lawyer for Replay confirmed that the reasons in the July judgment that dismissed the claims against Half Moon Bay CIP Management Inc. are the same reasons for dismissing the claims against Replay and Freetown Destination.
A lawyer for HMB stated that the decisions are under appeal. He said those will likely be heard in the first quarter of 2020.
A trial is scheduled for 2021.