Decade-long battle over Victoria Square property continues

TWO Appeal Court judges have reserved their decision on an appeal by two property developers of a judge’s approval of the sale of their building.

The sale was aimed at recovering a large portion of a $40 million loan to trustees of the Guardian Defines Benefit Pension Fund Plan.

David and Leonara Deslauriers are challenging the sale of their building at Victoria Square, Port of Spain, by Guardian Asset Management (GAM), which lent the couple money to complete the Hevron Heights Towers property at Mendez Drive, Champs Fleurs, in 2009.

The loan, with interest, the couple owed to GAM stood in excess of $40 million at the beginning of 2018. The couple lost two appeals in the Privy Council, one of which challenged the local courts' decision to allow GAM to sell their property at 28-29 Victoria Square to repay the outstanding money.

In May, Justice Ricky Rahim approved the sale of the property to the trustees of the pension fund plan at the upset price of $19.5 million, after several attempts to sell it failed.

The couple objected to the sale on the ground that the court should not have confirmed the sale to the trustees, since it breached its own order against self-purchase, which was imposed to ensure GAM exercised its duty to act in good faith and to take reasonable precautions to obtain the true market value of the property.

In their complaint, the Deslauriers argued that the trust company was not a separate entity from GAM.

They also said such a sale was irregular and amounted to improper conduct on GAM’s part.

In countering the argument, GAM said it took all reasonable steps to obtain the best price it could and made all reasonable efforts to sell, all of which were unsuccessful except for the trustees' offer.

The company maintained the trust company was not the same as GAM and the latter did not own the pension fund plan, nor did it benefit from it. It supplied evidence that the pension fund was created to fund pensions and benefits for employees of Guardian Group.

Rahim rejected the couple’s arguments and approved the sale, leading to their approaching the Court of Appeal with their complaint over his decision.

In arguments before Justices of Appeal Charmaine Pemberton and Vasheist Kokaram, the couple’s attorney Ian Benjamin, SC, said the trust company and GAM were inextricably linked and Rahim should not have encouraged the sale.

He said the court could not lower the standard of the conduct of the sale, adding that the court had to draw the inferences that the pension plan was for the benefits of GAM and its allied companies under the Guardian Group.

“It is for the benefit of the group. There can be no benefit of the doubt the respondent (GAM) is a member of the group,” he said, insisting the interlocking directorships violated the court’s order which ought to have prevented self-purchase.

Attorney Christopher Sieuchand, who represents GAM, said Rahim considered the nature of his duties and how the sale should be conducted. He said GAM did as it was ordered to do – advertise the property for sale.

He said the couple could not now complain that the directions were insufficient and more should have been done.

Sieuchand said there was nothing in the principles on trust deeds which gave rise to disturbing Rahim’s decision.

“At the end of the day, we are concerned with a sale to be used to settle a judgment debt,” Sieuchand said, adding that all the delays because of the legal skirmishes only served to contribute to the uncertainty over the value of the property.

“The less we get, the less would be applied to the judgment debt,” he said.

A stay which puts a hold on effecting the sale continues until July 30, when the court is expected to deliver its decision in the appeal.