Kevin Nolan and Robert Hall have built a reputation for acquiring and developing high-end properties in the St. John's area, while restoring heritage buildings to past glory.

But that reputation is now being tested, as the eponymous duo behind the Nolan Hall brand is linked to troubled projects, with creditors lining up to get money they say is owed to them.

A CBC News investigation has uncovered allegations involving related-party land transactions, unpaid debts in the millions, and a tangle of lawsuits and judgments affecting the firm and its principals.

Now the business affairs of Nolan Hall are under the microscope in court actions related to two separate St. John's condo deals gone bad.

'Nolan Hall had a reputation that was earned from over 20 years of hard work and they were held in high esteem in the community. Today that lies in tatters as a result of the lawsuit and the unsubstantiated allegations that have been put forth to social media and the public.' - email from Kevin Nolan to CBC News

One of those — a long-stalled plan for a project on Temperance Street — has been in the news before.

The other — on Rennie's Mill Road — had not, until Kevin Nolan granted an interview with The Telegram for a story that ran on Friday.

CBC News initially asked about that lawsuit on May 20. Nolan did not agree to an interview with the CBC, but has replied to questions by email.

In that correspondence, he blames many of Nolan Hall's current problems on the Rennie's Mill Road litigation. Nolan says they plan to file an $8-million countersuit against the plaintiffs later this month.

"Nolan Hall had a reputation that was earned from over 20 years of hard work and they were held in high esteem in the community," the email noted.

"Today that lies in tatters as a result of the lawsuit and the unsubstantiated allegations that have been put forth to social media and the public. As a result of this lawsuit and allegations, Nolan Hall has not been in a position to move its projects forward."

The Rennie's Mill Road plaintiffs are all from Ontario. They allege that they bought eight residential condominium units from Nolan and Hall in 2012, but later found out that the building wasn't actually zoned for condos. They are suing for damages.

The plaintiffs, through their lawyer, declined comment.

But some of the people who invested in the other project, on Temperance Street, are talking.

And they are not happy with how things have turned out.

'No clue where the money is': purchaser

Danny Baldwin was one of the first to plunk down a deposit to reserve a Temperance Street condo.

While Baldwin lives in Ottawa, his mother's family is from Bay Bulls, and a friend from there spotted the opportunity.

In August 2009, Baldwin paid $26,800 to Harbourside Development Corporation — a Nolan Hall company — as part of a "priority purchase reservation agreement" for Suite 216.

That deposit was 10 per cent of the total purchase price.

Nearly seven years later, there is no condo, and no sign of his deposit.

Danny Baldwin Temperance Street deposit CBC

Danny Baldwin paid $26,800 to Harbourside Development Corporation in 2009 to reserve a condo unit on Temperance Street. The condo project did not proceed, and he's been unsuccessful getting his money back. (CBC)

"Have no clue where the money is, and that's really, if you have one question you want to ask the proponents of Harbourside Development, it's kind of what's transpired with the money," Baldwin said in a recent interview.

"There's not been any money spent to build a facility, obviously. And so the money is somewhere. So what's happened with that? And how do the deposit holders who've made their investments in good faith get any of those funds back?"

Baldwin is not alone.

Bonnie and Melvyn Carter, retirees now living in Old Perlican, also say they are waiting to be repaid for deposits to reserve condo units on Temperance Street.

In 2009, they say they paid Harbourside Development Corporation more than $50,000 for deposits on two condos.

Just 18 months ago, in November 2014, they paid nearly $15,000 more to the company. They say that cash was supposed to reserve parking in a garage that was part of a revised plan for the project.

"At this point, it doesn't look like we're going to get anything back," Bonnie Carter told CBC News.

"You still hope, but it doesn't look that way."

Added Melvyn Carter: "It looks like we lost our money."

CBC News has corresponded with another half dozen people who tell similar stories — about paying deposits for condo units on Temperance Street, and not having any luck recouping their cash.

Melvyn and Bonnie Carter Temperance Street condos CBC

Melvyn and Bonnie Carter of Old Perlican say they are out $65,000 related to deposits they paid to reserve two condo units in a stalled development on Temperance Street in downtown St. John's. (CBC)

Half of $1.25 million outstanding

In documents filed at the registry of deeds, Harbourside Development Corporation acknowledged there was $1.25 million owed to 28 depositors last year.

Kevin Nolan said in an emailed statement to CBC News that 12 of those 28 "have been satisfied" as of last week, and only half of the original $1.25 million remains outstanding.

Some of them took vacant plots of land in Green's Harbour as compensation.

The rest have been "protected by way of a direction to pay registered against the land," Nolan contended in an email to CBC News.

According to public records, that happened in September, when Harbourside Development Corporation acquired an interest in some of the Temperance Street land for $1.25 million.

Asked why Harbourside didn't simply pay the $1.25 million to depositors owed the cash, Nolan replied that "the sales price above included a non cash flow amount."

And Nolan says the original deposits were used.

Temperance Street sign

A long-planned condo project for Temperance Street in downtown St. John's remains stalled, nearly seven years after deposits were first paid to reserve units there. (CBC)

"If you read the priority reservations signed it clearly stated that the funds could be used to further the development which they were," he said by email.

"They were not trust deposits."

Asked how the funds were used "to further the development," Nolan declined to provide further details.

Danny Baldwin acknowledges that his deposit was paid directly to the company.

"We may have made mistakes by not providing the money in trust and gave it in good faith to what was a reputable developer, and had a pretty good track record, and have been sorely disappointed for the last seven years," Baldwin said.

The province says the Condominium Act does not require deposits to be placed in trust, adding that the act does not apply when a condominium corporation has yet to be formed.

Small claims testimony

One thing seems certain — Harbourside is now broke.

That was confirmed by a recent small claims case heard at provincial court in St. John's.

Earlier this year, Ashraf Mahgoub of Vancouver won a $25,000 judgement against Harbourside related to his Temperance Street deposit.

Last week, as part of that court process, current Harbourside director Albert Nolan — brother of Kevin Nolan — described the company's finances.

"Harbourside, right now, it's just, there are no assets, it's not doing business," Nolan said at a June 1 court hearing.

"Its sole business was that development."

He told the court: "There is no active bank account for Harbourside Corporation. It hasn't been used since 2013, I guess."

Kevin Nolan later told CBC News those bank account comments were not accurate: "That is something of confusion as the bank account was 2015 not 2013."

Albert Nolan PMDL Harbourside CBC

Albert Nolan is pictured during an April 2016 court hearing into the bankruptcy of Project Management and Development Limited (PMDL). He is the sole current director of PMDL and Harbourside Development Corporation, two companies involved with stalled plans to build condos on Temperance Street. (CBC)

Another group also owed money

There is a separate group who are also owed money related to the stalled Temperance Street plan.

They invested with a different company — a company that is also linked to Nolan Hall.

Project Management and Development Limited (PMDL) initially owned all of the Temperance Street land.

A group of private individuals in Toronto and Kingston, Ont., and the Vancouver-based Canadian Western Trust Company loaned PMDL more than $1.5 million three years ago. Some of that cash came from retirement savings.

The loans were backstopped by a mortgage on part of the Temperance Street property.

Earlier this year, those investors went to court to push PMDL into bankruptcy. Their lawyer said at the time that not a single payment had been made on the loans. The investors claimed that the total amount owed, including interest, had ballooned to roughly $2.4 million.

A Supreme Court judge granted the bankruptcy order, but PMDL filed an appeal, blaming factual inaccuracies for the decision.

Creditors have asked that the trustee be allowed to continue his work, pending the appeal process.

Temperance Street condo sign chopped down CBC

The sign that advertised a long-planned condo project on Temperance Street in downtown St. John's has been chopped down. The only structure on the site is a fence across part of the property. (CBC)

'Unorganized and incomplete,' trustee says

The trustee appointed to oversee the PMDL bankruptcy was Ian Penney of Janes and Noseworthy Limited.

According to its initial bankruptcy filings, PMDL has zero cash on hand. Its only asset is a portion of the Temperance Street land.

In an affidavt filed at the Court of Appeal, the trustee said he began his work but found "that the books and records provided to date are unorganized and incomplete and, as such, to properly complete my investigation, I require the ability to speak to [PMDL's] accountant and gain further access to bank accounts, books and records."

'My investigation to date has raised concerns regarding specific dispositions of real property ...' - affidavit from bankruptcy trustee Ian Penney

According to that affidavit, the initial review raised some potential red flags.

"My investigation to date has raised concerns regarding specific dispositions of real property … and lifting the stay of proceedings is necessary for these investigations to continue so as to not prejudice the creditor's rights and remedies," Penney's affidavit noted.

Among the transactions the trustee highlighted in his affidavit:

  • Half of the Temperance Street land was conveyed by PMDL to another company linked to Nolan Hall — Newfoundland Real Estate Investment Corporation (NREIC). The "purported consideration" was $2.1 million. But according to the affidavit, PMDL director Albert Nolan told the trustee that no cash was actually received.
  • NREIC's subsequent mortgaging of that block of land to Halifax-based G.H. Holdings for $787,000.
  • NREIC's mortgaging of that same block of land again to Harbourside for $1.25 million.
  • The transfer of land in Blaketown from PMDL to Kevin Nolan "with the purported consideration being $125,000."
  • Three subsequent sales of land in Blaketown by Kevin Nolan to other buyers — two for $1,000 each, and the other for $27,000.

The trustee called them "apparent non-arm's-length transactions" or "transactions at undervalue" and said they will require further investigation. Penney also noted that "there may be other transactions that require immediate investigation."

Nolan did not reply to questions about the trustee's affidavit.

Rennie's Mill Road dispute

While the Temperance Street tempest is the better-publicized condo conflict, it is not the only one facing Nolan Hall.

According to court documents, in the summer of 2012, eight people agreed to purchase eight residential condominium units from Kevin Nolan and Robert Hall at 23 Rennie's Mill Road.

But in 2014, they say they received inspection notices from the City of St. John's that led to problems.

"As a result of the inspection notices and the investigation that ensued, the plaintiffs discovered that the property was not zoned for 'residential condominiums' as they had thought," their court filings note.

The plaintiffs allege that Nolan and Hall "committed a negligent misrepresentation."

In their statement of defence, Nolan, Hall and their company Nolan Hall Real Estate Services deny that claim.

23 Rennie's Mill Road St. John's CBC

Nolan Hall is being sued over the sale of 23 Rennie's Mill Road in St. John's. The plaintiffs allege that they bought eight residential condominium units there, but later found out that the building wasn’t actually zoned for condos. Nolan Hall is denying the allegations. (CBC)

"The plaintiffs were aware and clearly understood that the units in question were not residential condominiums," that document notes.

Nolan Hall has filed a counterclaim for $155,000 in damages.

None of the allegations by either side have been proven in court.

Kevin Nolan now blames that lawsuit, filed in November 2014, for Nolan Hall's current troubles.

"When the 23 Rennie's Mill Road action personally named the principals of Nolan Hall and its related entities, the secondary Temperance Street development financing was frozen, basically halting all Nolan Hall related projects, including the two condo developments on Temperance Street," he said by email.

Nolan also blames other significant debts on the lawsuit.

Nolan Hall Real Estate Services owes the feds nearly $400,000 in tax payments, and its former lawyer another $70,000, according to public records.

'3 sides to every story'

In January, Nolan and Hall were retroactively delisted as directors of PMDL and Harbourside, back to last summer.

Nolan says that Hall had health issues, and his doctor advised him to "lay off the stress."

He indicated that they both remain shareholders in PMDL.

A few weeks ago, Hall was retroactively delisted as director of Nolan Hall Real Estate Services, all the way back to March 2015.

Last year, Nolan Hall advertised another potential development for the Temperance Street land, called the Peninsula Residences.

Nolan says financing came to a halt because of the Rennie's Mill Road lawsuit.

He says the courts will ultimately sort things out.

"[There] are three sides to every story," Nolan wrote. "Theirs, ours and eventually the judges."

CBC News Investigates