Appeal Court reserves decision in battle over CL Financial lands

THE Court of Appeal has reserved its decision on a procedural challenge brought by a property developer over the purchase of 16 acres of land from a subsidiary of CL Financial.

Select Properties Ltd (SPL) is again challenging a decision of Justice Kevin Ramcharan, who ordered that the land, at South Park, Tarouba, as well as other properties owned by CLF’s subsidiary Home Construction Ltd (HCL), should be publicly advertised.

According to evidence in the case, HCL’s subsidiary, Trincity Commercial Centre Ltd (TCCL), agreed to send the land to SPL for $60 million. The company agreed to pay a ten per cent deposit, which was to be refunded if the deal fell through.

Last year June, Hugh Dickson and Marcus Wide, of international accounting firm Grant Thornton, who were appointed by Ramcharan when he approved the liquidation in 2017, applied to approve the sale. Ramcharan refused the application and instead ordered the liquidators to advertise the property for sale to the highest bidder.

On Monday, Select Properties’ lead counsel Anand Ramlogan, SC, argued before Justices of Appeal Peter Rajkumar and Vasheist Kokaram that the judge was wrong when he ordered the land to be advertised. They are asking for the judge’s order to be set aside.

He said his client had received an offer for the purchase of the lands, and after TCCL received the approval of the liquidators to proceed with the sale, the judge did not have the power to disregard the sale agreement and overturn the contract.

Ramlogan said when the liquidators came to the court for approval, it was not for a sanction, but for approval to go ahead with the sale.

He said since the Companies Act gave the liquidators the power to sell by private treaty, he was basically a rubber stamp for the transaction.

“The court has to determine, was there was a binding agreement and was it a sound agreement?” Ramlogan said, adding that Ramcharan should have disregarded that, after the properties were advertised, there were three higher offers and go back to the sale agreement to consider if the sale should go through.

“They (the liquidators) did not need to come to the court. They didn’t come for sanction, they came for direction out of an abundance of caution,” he said. “They came to court to ask approval to proceed with the sale. There was no bad faith, fraud or bias. The court should not have intervened to overturn the contract of sale entered into in this matter,” he submitted.

Senior Counsel Deborah Peake, who represents the Attorney General for the Government as the largest CLF creditor at the appeal, reminded the judges that CLF was in compulsory liquidation and the debt owed was still massive, even after all this time.

“Any rational judicial officer would be concerned with the debt owed.”

She said the liquidators applied to the court for directions on the sale of CLF’s land bank, which included the Tarouba lands, and Select Properties agreed the sale would be subject to the court’s agreement.

She said the judge refused to approve the sale to SPL and, on the urging of creditors, made an order for the properties to be advertised.

Peake said the judge was correct to take into account the higher bids received after the property was advertised.

“Are they saying the judge should disregard the later high bids received pursuant to a court order? It must be that he was entitled to look at the change in circumstances.

"The principal function of the court in liquidation matters is to achieve the highest possible price in a court-approved process,” she said in her submission to convince the judge to dismiss SPL’s appeal.

Also arguing that SPL’s appeal must fail was attorney Bronock Reid, who represents CLF.

At the end of the hearing, Rajkumar and Kokararam reserved their decision and told the parties they will be notified in writing.

Also appearing for SPL were Renuka Rambhajan and Jared Jagroo, Ravi Heffes-Doon also represented the AG.