Kevin Nolan, left, and Robert Hall, right, are pictured at Ryan Mansion in St. John's with Prince Charles and his wife Camilla during a royal visit in 2009. (Source: www.ryanmansion.com)
A Newfoundland and Labrador Supreme Court judge has ruled that two high-end real estate developers knowingly sold condos to out-of-province investors, even though they were aware St. John's zoning laws didn't allow that use.
Justice Garrett Handrigan ordered Kevin Nolan and Robert Hall to pay damages of $1.8 million, plus legal costs related to the almost decade-old court proceeding.
"I am satisfied on the evidence that the defendants knew The Merchant's House was not zoned as a condominium development and that they misrepresented it to the plaintiffs knowingly," Handrigan wrote in a decision issued this week, describing a historic property near Bannerman Park in St. John's.
"They tried to establish and maintain complete control of the project so the plaintiffs would not uncover the truth and, in the meantime, duped the plaintiffs into buying the units as zoning compliant."
The eight plaintiffs in the case are all from Ontario. They sued for negligent misrepresentation, claiming that they bought eight residential condominium units from Nolan and Hall in 2012.
Two years later, after a sign was placed outside 23 Rennie's Mill Rd. listing units for lease, city inspectors swooped in. They shut down rentals at the property, and ordered the second and third floors to be immediately vacated because of "life safety issues."
The property is only permitted to be used as a lodging house or bed and breakfast — not condos.
In his decision, Handrigan noted the "sleight of hand" by Nolan to remove the kitchens and to cover up the cooktops so city inspectors would not see them when they went to the property.
"Mr. Nolan's machinations are clear evidence of his complicity and of a guilty mind at work," Handrigan wrote in his decision.
Kevin Nolan and Robert Hall were sued over the sale of 23 Rennie's Mill Rd. in St. John's. The plaintiffs alleged that they bought eight residential condominium units there, but later found out that the building wasn’t actually zoned for condos. (CBC)
The judge also noted that neither Nolan nor Hall testified at trial, nor offered themselves to the plaintiffs for cross-examination.
"Hence it is fair to infer, and I do, that they are hiding something and based on the evidence I have here, it is equally fair to infer that they are hiding that they knew The Merchant's House was not the condominium development that they sold to the plaintiffs," Handrigan wrote.
Nolan and Hall represented themselves in court. The judge dismissed counterclaims they had filed against the plaintiffs.
The $1.8 million judgment against Nolan and Hall will be reduced by an undisclosed amount already recovered in a settlement with Denis Barry, the now-retired lawyer who represented all sides in the sale of the units.
Plaintiffs laud decision; Nolan says appeal planned
In an email to CBC News early Wednesday morning, Nolan noted that the plaintiffs "have never attempted to sell any of their condos in an effort to help mitigate their losses."
Nolan added: "I have no choice but to appeal the judge's verdict."
Hall could not be reached for comment.
The duo were behind the driving forces behind the Nolan Hall real estate brand.
In the early 2000s, they earned a reputation for redeveloping heritage and high-end properties in the St. John's area.
But Nolan Hall was later enveloped in a swirl of controversy, with investors saying they paid deposits for a separate project that didn't proceed on Temperance Street in downtown St. John's.
In a 2016 statement to CBC News about the Rennie's Mill Road condo conflict, Nolan said the courts would ultimately sort things out.
"[There] are three sides to every story," Nolan wrote at the time. "Theirs, ours and eventually the judges."
Two of the plaintiffs cited that statement in an emailed statement to CBC News reacting to the judgment against Nolan and Hall.
Investors Roxanne O'Connor and Cynthia Manners highlighted the judge's comments about "compelling evidence that their malfeasance extended beyond mere negligence" in this case.
"We are grateful for the judge's decision," O'Connor and Manners wrote.
"Our story has always been our truth."