Derek Achong

A High Court judge has called on statu­to­ry bod­ies to cur­tail their reck­less spend­ing as he de­liv­ered judg­ment in a mul­ti-mil­lion dol­lar le­gal dis­pute be­tween the Agri­cul­tur­al De­vel­op­ment Bank (ADB) and a pri­vate com­pa­ny over the lease of a four-storey build­ing in Ch­agua­nas which had no plan­ning per­mis­sion.

Jus­tice Frank Seep­er­sad yes­ter­day or­dered the State-owned bank, which was es­tab­lished to pro­vide fi­nan­cial ser­vices to farm­ers, to pay 21st Cen­tu­ry In­sur­ance and Rein­sur­ance Bro­kers Lim­it­ed $1 mil­lion, as it can­celled the lease even though it knew the own­er did not have plan­ning per­mis­sion when it was signed the deal.

Seep­er­sad said: "It ap­pears to the court that the lev­el of ex­pen­di­ture un­der­tak­en by the claimant was reck­less and demon­strat­ed lit­tle re­gard for the wel­fare of the pub­lic purse and this type of be­hav­iour ap­pears to be un­der­tak­en far too of­ten in statu­to­ry bod­ies."

"Ef­fi­cient, ef­fec­tive and con­sid­ered use of the State's lim­it­ed re­sources has to be a fo­cal point of con­cern, and ac­count­abil­i­ty when there is a breach should be pur­sued," he said.

The law­suit cen­tred around a five-year lease of the build­ing at Mulchan Seuchan Road in Ch­agua­nas, which was signed for $200,000 a month, in May 2012.

ADB's board pro­posed us­ing the build­ing as its new head­quar­ters and al­most $10 mil­lion was spent to out­fit and fur­nish the build­ing and to in­stall IT in­fra­struc­ture.

How­ev­er, al­most a year lat­er and with­out ever oc­cu­py­ing the build­ing, the bank sig­nalled its in­ten­tion to can­cel the deal af­ter is­sues arose over the lack of plan­ning per­mis­sion. Most of the fit­tings in­stalled by ADB were re­moved as the bank va­cat­ed the prop­er­ty. Retroac­tive plan­ning per­mis­sion was lat­er ob­tained by the own­er of the build­ing.

ADB sued the com­pa­ny as it claimed that it had mis­rep­re­sent­ed it­self when mar­ket­ing the build­ing. How­ev­er, that al­le­ga­tion was dis­missed by Seep­er­sad, who not­ed that ADB's for­mer chief ex­ec­u­tive Bren­don Nel­son ad­mit­ted the board was aware of a lack of plan­ning per­mis­sion when it agreed to the lease the build­ing.

In his 37-page judge­ment, Seep­er­sad al­so crit­i­cised the bank over the deal as he said that it en­tered in­to the agree­ment know­ing that it had to ob­tain a amend­ment to the law which cre­at­ed it in or­der to re­lo­cate its head­quar­ters, but did not do so.

He al­so called for the stricter ad­her­ence to and en­force­ment of plan­ning re­quire­ments to en­sure prop­er ur­ban plan­ning.

"The lack of en­force­ment en­cour­ages peo­ple to dis­re­gard the plan­ning re­quire­ments, they erect struc­tures and then ap­ply for retroac­tive ap­provals and even the grant of ap­proval at that stage is very of­ten clothed in sus­pi­cion," he said.

ADB was rep­re­sent­ed by Seenath Jairam, SC, and Jagdeo Singh while Lynette Ma­haraj, SC, ap­peared for the com­pa­ny.