Hotel sale reveals loopholes in the system
The sale of Mt Cinnamon Beach Resort was rushed through in secret “under the cover of COVID-19,” according to the attorney for a couple seeking redress from the company for their $1.4 million investment and maintenance fees in an apartment.
“The sale happened without any notice to the court,” attorney Johanan Lafeuillee of CARICOM Attorneys said, referring to the action as a “very crass disregard for due process.”
Speaking at a press conference on Tuesday, Lafeuillee said her clients Danielle and Franklyn Comissiong seized the opportunity to invest in Grenada made to them through Peter de Savory, former owner of the Mt Cinnamon Beach Resort.
In 2007 the couple invested $1.4 million (EC) in a Mt Cinnamon apartment, but has yet to see any of the promised five percent of annual net returns realised from rental income. They were promised access to the tourist site and that the value of their investment would increase over time as the area was further developed.
“They were also given the impression that this construction was already in the works and set for the immediate future.” Meanwhile, the couple was paying “quarterly hefty sums” to the development, year after year, yet there was no profit. By 2013 they became concerned, and contacted the CARICOM attorneys.
Following a long delay, during which “every excuse was used to get adjournment after adjournment” by the attorneys for Mt Cinnamon, an application hearing was finally convened on December 16, 2019 in Grenada’s High Court.
The couple applied for interim relief when rumours emerged that the hotel was for sale. A civil claim was forwarded to the High Court of Grenada seeking, among other things, rescission of the lease hold agreement of 2008, damages and the rental proceeds from the one-bedroom unit in which the couple had invested and from which Mt Cinnamon has collected rent since 2013. One of the points brought before the court was the fact that the pending sale could take place before the trial. That is ultimately what happened.
The couple was “shocked” when Prime Minister Dr Keith Mitchell, in a national address On May 10, 2020, referred to the “recent acquisition of Port Louis and Mount Cinnamon, with plans to add up to 500 new hotel rooms, in an investment worth more than US$350 million.” Five days later Joyau des Caraibes Ltd, owner of Silversands Grenada, announced the acquisition of Port Louis Maritime Village and undeveloped land at Mount Cinnamon Village and the undeveloped lands at Mount Cinnamon resort.
“The manner in which the sale was done, it really causes one to wonder, what are our systems really allowing,” she asked.
The attorney said the sale happened before the decision of the court was delivered. Moreover, after extensive local and international investigations she has determined the company to which Mt Cinnamon was sold did not exist. She said the Deeds and Lands Registry was used to conclude this sale purchase.
“There was no record of this sale purchase at the Registry,” she said, and there were no records of this company anywhere. “Not on the computer system, not in the deeds acknowledgement book. Nowhere,” she emphasised.
“The company the lawyer indicated to the Registry by deed; the company they said that purchased this land is literally non-existent in Grenada.”
The deed cites details of JDC2 Limited, a limited liability company incorporated under the Companies Act of Grenada.
“Literally the Registry would have finalised in deed form details that were, more or less, fabricated, for lack of a better term.” The Registry was subsequently advised of this “ghost” company.
During the application hearing in December 2019 lawyers for Mt Cinnamon gave the assurance they would provide details of the rental arrangements for the apartment. Over the years, the company has failed to disclose the rental proceeds to the couple.
The court had set an early trial hearing for June 17 and 18, 2020; however, that did not take place due to the situation with the borders and the coronavirus pandemic. To date, there has been no decision by the court and no ruling on the application for interim relief, nor has Mt Cinnamon filed rental proceeds accounts with the court as promised.
She said her investigations have also revealed that the beach front land on which the five star hotel was to be built and this land for which her clients were paying for maintenance all these years factored into that sale and was given over to Joyau des Caraibes Ltd.
A director of the company reached out to the Comissiongs and they agreed to a meeting on July 27, at which the company offered the couple a $30,000 “take it or leave it” proposal, indicating they have the time and the money to drag this matter out “as long as it takes.”
At this point the Comissiongs await the decision of the court regarding their application for interim relief and a new court date.