Over the last few months, a lot has been written about the impact of the new taxation regime on the gaming houses in Trinidad and Tobago.
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Developers lose appeal over Champs Fleurs project
Two property developers have lost their final appeal against an investment company over an unpaid $18.9 million loan for an upscale real estate project in hills of Champs Fleurs.
In a 25-page judgment handed down on Thursday, five Law Lords of the Privy Council rejected two parallel appeals filed by David and Leonara Deslauriers against Guardian Asset Management Limited (GAM).
While the couple admitted to owing the company the money plus interest, currently calculated at $36 million, they claimed GAM’s failure to lend them additional money to complete the Hevron Heights Towers project at Mendez Drive, Champs Fleurs, in 2009, resulted in $25 million in losses.
The Deslauriers claimed the company failed to inform them that it could not lend further money as it had a lending limit, unlike other financial institutions.
They also claimed they could not approach their previous lenders Republic Bank for additional funding as they had ended their relationship with them to get the loan from GAM.
The judges agreed with High Court Judge Ricky Rahim and the Court of Appeal who had ruled that GAM did not misrepresent its position to the couple.
They said while the company did not tell the couple of the lending limit, it was not required to as the couple did not indicate that they would require further funding while negotiating the loan.
“If the possibility of application to GAM for additional loans for the rest of the development was not raised, then the lending limits which affected GAM were simply irrelevant, there was no occasion to disclose them and whatever it said in the conversation about banks cannot amount to a materially partial or misleading statement,” the judges said.
In the second limb of the appeal, the Deslauriers challenged the local’s court’s decision to allow GAM to sell the family’s property at Victoria Square in Port-of-Spain to repay the outstanding money.
The couple claimed they could not as the property was put in a trust for their two children.
However, the court ruled that this was not a defence as the couple took no steps to transfer legal title to the property to the children to be held in trust.
The couple suggested that the company could sell the incomplete project, which was held on mortgage for the loan. They claimed the unfinished project was more valuable than the Victoria Square property. This contention was also rejected by the judges, who questioned the viability of the proposition.
The judges said the couple’s $77 million valuation for the unfinished development was inflated as it did not consider that potential buyers who made deposits on units would have to be repaid.
“Taken together, this evidence demonstrates to the board’s satisfaction that, far from constituting an asset available for early realisation in an amount more than sufficient to pay the judgement debt and accruing interest, Hevron Heights represented an asset with a very uncertain timetable for sale, and with real doubts as to whether the net proceeds of realisation would, in fact, repay the judgement debt and accruing interest in full,” the judges said.
The couple was represented by Peter Knox, QC, and Ian Benjamin, while Gavin Kealey, QC represented GAM.