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.