Appeal Court orders unsealing of file on sale of CL Financial land

Two appellate court judges have ordered the unsealing of a court file relating to the sale of 16 acres of prime property at South Park, Tarouba, owned by CL Financial (CLF)and its subsidiaries Home Construction and Trincity Commercial Centre (TCCL), to a real estate developer.

The property was valued at $60 million.

Justice Allan Mendonca and Andre des Vignes on Thursday set aside a December 2019 decision of Justice Kevin Ramcharan to have the court file on an application by the joint liquidators of CLF to approve the sale.

The judges also sent the matter back to Ramcharan to decide whether to remove his stay on the sale and/or grant approval of the sale agreement made between TCCL and Select Properties Limited (SPL) in January 2019.

SPL was represented by Senior Counsel Anand Ramlogan, Jared Jagroo, and Alvin Pariagsingh while CLF was represented by attorney Bronnock Reid. Senior Counsel Deborah Peake and Ravi Heffes-Doon represented the Attorney General. First Citizens Bank was also represented.

In unsealing the records, the judges said SPL had a legitimate interest to inspect the documents, in particular the application made by the joint liquidators approving the sale as well as an affidavit in support of it and the proceedings before the judge.

The company sought the court’s file, the application for the sale and a copy of the hearing of the liquidators’ application but were denied by Ramcharan.

He also withheld the court’s permission for the sale of the land and instead ordered that the sale be advertised.

At the application hearing, concerns were raised by First Citizens, a debenture holder of many of CLF’s companies and the Government, as CLF’s major creditor, that the land was being sold without it having been advertised. After sale agreement was reached, SPL was contacted by TCCL which wanted to insert a clause requiring judicial approval for the sale. Although reluctant to sign the amended agreement since it was between TCCL’s parent company, HCL and it required the court’s approval, SPL’s director Vishnu Maharaj eventually did as he was advised that the approval was a “mere formality.”

He had also paid a 10 per cent down payment of the $60 million sale price agreed to.

Ramcharan said the court could not be a rubber stamp, and expressed the court’s concerns about the proposed transaction since CLF was in liquidation although neither TCCL nor HCL were in liquidation but continue to operate as going concerns.

In SPL’s application for him to stay his order, unseal the file and permit the sale, he said the interest of the purchaser did not arise.

However, in their ruling the appellate court judges found Ramcharan’s order to seal the file to be disproportionate. They said by doing so he deprived SPL, who had an equitable interest in the parcel of land being a purchaser and a legitimate right to be heard on the joint liquidators application, sight of the application and supporting affidavit and any real and proper opportunity to be heard on the application.

“We are of the view that the court file ought to be unsealed,” they said. They will determine what parts, if any, of the liquidators’ application for the approval of the sale, the affidavit filed in support of it and the transcripts of the hearing of the sale application, should be redacted.

As part of their order, the court will arrange for the liquidators to collect the redacted documents so it could be filed and served on SPL, the Attorney General and FCB.

Ramcharan was also ordered to hear the matter urgently.

In their ruling, both Mendonca and des Vignes, who wrote the decision, held that the “open justice principle,” which deals with the right of access by non-parties to certain documents filed, should not be departed from lightly. “Derogation from same ought only to be had in wholly exceptional circumstances,” the ruling said.


"Appeal Court orders unsealing of file on sale of CL Financial land"

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