$120-million Acadia development on shaky ground after judge sends ‘strong message’

A developer who built 32 bedrooms instead of the approved 12 has lost a bid to have an adverse court ruling withdrawn on the basis of a settlement with the St Andrew residents who opposed the apartments' construction.

Supreme Court judge Natalie Hart-Hines handed down her decision on February 28, an outcome that underscores the courts’ recent tough stance against non-compliant developers, while throwing further doubt on the future of $120 million worth of construction at 10 Roseberry Drive in Acadia.

The case goes back to 2019 when Belgravia Development Company, led by Cliff Rochester-Butler, applied to the court for permission to modify the restrictions to accommodate his multifamily structure in an area with mostly single-family dwellings.

Restrictive covenants are essentially contracts among landowners in a community which regulate how the land is used. Residents must be consulted, with any change sanctioned by the Supreme Court before construction.

Several residents initially opposed Belgravia’s plans but, ultimately, Jaleel and Guilda Handal were the two who led the battle in court when they formally objected in July 2020.

In December 2021, Justice Hart-Hines ruled against Belgravia and agreed with the Handals that the apartment complex would impact their privacy, since one of the floors overlooked their pool.

She also pointed to the “inappropriate conduct” of Belgravia’s agents in the breaches of the building permit, and work carried out while the matter was before the courts.

On January 14, 2022, the Handals applied to the court for an order for Belgravia to demolish the property.

Rochester-Butler, who is Belgravia’s sole director and shareholder, objected to the request, claiming, among other things that the judge did not have the jurisdiction to make that order, having already ruled on the case.

The stop order imposed by the Kingston and St Andrew Municipal Corporation (KSAMC) on January 5, 2022 was also cited. According to Rochester-Butler, the court was likely to consider the options similar to the ones in an enforcement notice which would include requiring Belgravia to “take steps to alter the building to achieve conformity”.

“In light of the judgment and the subsequent stop notice, I have caused the applicant (Belgravia) to take steps to have the building plan redrawn or redrafted to allow for conformity with the 12-bedroom structure that was approved by the KSAMC,” said Rochester-Butler in his affidavit dated January 28, 2022.

He indicated then that he had submitted the revised drawings to the KSAMC for approval.

The drawings, the businessman said, were changed to show the removal of walls, to repurpose living spaces for storage, laundry, and entertainment and amenity zones “in an effort to be within the confines of a 12-bedroom structure”.

Demolition would bring financial ruin, while the alterations would be an “adequate remedy” to the situation, he argued.

“The applicant has expended resources in the sum of $120 million in the construction of this development to provide housing in the community of Acadia and it will suffer severe hardship and significant financial loss and ruin if the development is to be demolished,” Rochester-Butler said in the document obtained by The Sunday Gleaner.

“The shareholder and investor(s) will also suffer irremediable harm, given that they contributed to this investment and were awaiting the sale of the units in order to recoup the return on their investment.”

The hearing into the residents’ demolition request was delayed and finally held on October 21, 2022.

LACKED THE AUTHORITY

At the hearing, Belgravia’s lead attorneys King’s Counsel Georgia Gibson Henlin and Sharine Willis argued that having ruled in December 2021, Justice Hart-Hines did not have the power to re-examine the matter to grant the orders sought by the residents, as the demolition issue was not raised at trial.

Gibson Henlin said the judge lacked the authority to order any demolition in circumstances where the KSAMC had issued enforcement proceedings which required Belgravia to alter the works done to ensure compliance with the building permit.

She also contended that, if the order were to be granted, there would have to be an additional hearing to get expert evidence on the alterations proposed by Belgravia.

The residents are represented by Myers, Fletcher & Gordon, with Gavin Goffe and Matthew Royal appearing. Goffe contended that the court could examine the case because the orders from the December 2021 ruling were not perfected.

The arguments out of the way, Justice Hart-Hines said she would hand down her decision on December 8, 2022.

However, on December 1, the court said its registry received an email from lawyers in the case indicating that the parties arrived at a settlement.

The Sunday Gleaner was unable to access the specific terms of the settlement.

On December 6, Belgravia sought an order for the Handals to withdraw their application for demolition, as well as their objection to the request for permission to change the community rules to allow the apartment complex to be built.

On December 8 the judge ruled that she would not reverse her judgment and the related orders.

The Handals, however, were allowed to withdraw their application for the demolition order.

Just over a week later, on December 13, the developer applied to the court for the original December 2021 judgment to be withdrawn; the Handals to be permitted to withdraw their objection and the approval of their draft December 6 orders.

At a hearing on January 31, 2023, Gibson Henlin pointed to the settlement which she argued represented a “material change in circumstances” to justify the revocation of the 2021 ruling.

She said, with the residents’ objections out of the way, there was no basis for the December 2021 ruling that the community restrictions should not be changed.

According to her, the withdrawal of the judgment would not bring the judiciary or the administration of justice into disrepute, as the judgment was in draft.

Regarding the breaches that the court found and the subsequent stop order imposed by the KSAMC, the senior lawyer said the municipal authority would have to conduct a new inspection.

FURTHER HURDLE

There was a further hurdle for the developer, however. The Handals’ lawyer told the court that his clients did not agree to the withdrawal of the judgment but rather that Belgravia be granted permission to build the multi-family structure, according to the judgment issued on February 28.

But Gibson Henlin disagreed with the recollection from the residents’ attorney. The court said it “is not privy to all the matters agreed by the parties”.

Justice Hart-Hines was not swayed by the developer’s argument and asserted that revoking her judgment, which came before the settlement and amid the breaches, “would bring administration of justice into disrepute”.

The judge said the agreement could address one of the issues she considered in arriving at her decision – the issue of privacy, since the developer would now demolish a section of the second floor that overlooks the Handals’ property.

But that wasn’t “significant enough to make it appropriate for me to revoke my judgment”, the justice said, noting that the parties had more than a year to cut a deal and before her 2021 ruling.

“Now, after a decision on the merits and after receiving a written judgment setting out the breaches observed during the trial, the parties would seek to have me reverse my decision and, in effect, ratify the said breaches. That is an untenable position,” she argued.

Greater weight must be placed on finality, a legal principle that a matter must be brought to an end in the public interest than on the settlement reached post-judgment, the judge insisted.

Although she acknowledged that the Restrictive Covenant Act “does not expressly” refer to public interest concerns, the judge said the court is “empowered” to consider those factors “if it is just and equitable to grant the application” and, on that basis, withdrawing the judgment set a bad precedent.

SEND A STRONG MESSAGE

“It would send the wrong message that a property developer who commences building before the restrictive covenants have been modified (and therefore chooses to breach them) might simply broker a settlement with the objectors after the court became aware of the breaches of the restrictive covenants, in order to have the court ignore the breaches and grant the application for modification,” Hart-Hines wrote in a 29-page opinion.

The rights of other persons who benefit from the restrictive covenants, and the conduct of the developer which led to the stop order on the project, could not be ignored, she argued, pointing to the construction of the building before the court’s decision was made and the number of units and bedrooms that exceeded what was approved by the KSAMC and the National Environment and Planning Agency (NEPA).

According to the judge, despite almost one year since the revised drawings were submitted to the KSAMC in February 2022, Rochester-Butler had not provided any updates to the court on the decision of the parish authority.

“It would therefore be injudicious of me to grant the application to modify the restrictive covenants when the building approvals were breached and when the environmental permits issued by NRCA/NEPA may also be void, and when the applicant has not provided anything from either agency indicating that the breaches have been addressed,” said Justice Hart-Hines.

The judge had slammed the KSAMC and NEPA for their lack of oversight of the project, noting that they “have been dilatory in their mandate to enforce local planning laws and regulations and to promote sustainable development”.

“It would seem, at the very least, that the building inspectorate at the KSAMC failed to inspect the building at critical stages of construction, including the pouring of the concrete decking for each floor of the building. Had such an inspection been done, the breaches would have been apparent,” findings the judge arrived at in her original judgment following visits to the property.

On Friday, the KSAMC said it was “unable to comment at this time” because the matter was before the courts.

NEPA, which noted after the 2021 ruling that it was not before the court and did not provide any evidence, did not respond to Sunday Gleaner questions.

Rochester-Butler directed queries to his lawyer whom this newspaper was told on Friday was unavailable.

“I have no comment on this,” said Goffe, who represents the residents.

jovan.johnson@gleanerjm.com