Bankers Insurance has won its lawsuit against its former majority shareholder Robert Amar and seven of his companies, over ownership of a multi-million property in Port-of-Spain.
Delivering a written judgement in the case yesterday, High Court Judge Frank Seepersad ruled that the company was the owner of the property, located along Tragarete Road in Woodbrook, and that it (the property) was not held on trust for Amar and his family as he contended.
According to evidence in the case, in 1990, the property, which sits on land leased from the Port-of-Spain City Corporation, was transferred from Amar to the company in exchange for its freehold interest in another commercial property in St James.
Amar claimed that at the time, there was an agreement that the property would be held in trust for his family and would only be used by the company to increase its statutory fund obligations under the Insurance Act so that it could attract additional insurance business.
The deed for the property was renewed for 30 years in the company’s name in 2000.
Two years later, Amar sold his shareholding in the company to the now-defunct Hindu Credit Union (HCU).
He claimed that the sale was on the understanding that the company would continue to hold the property in trust for his family.
Amar remained as a director of the company until he was removed in 2018 and his companies continued to periodically occupy portions of the building.
In his judgement, Seepersad ruled that Amar’s claim over the creation of a trust when the property was first transferred to the company was not plausible, as no trust documents were created and no beneficiaries identified.
He also noted that at the time of the transfer, the property would not have been as valuable to the company as claimed, as the lease was almost due to expire.
“The Court finds it is probable to conclude and it finds as a fact that by virtue of the deed, the Claimant became the legal owner of the building and the holder of the then subsisting leasehold interest over the lands upon which the building stood,” he said.
Seepersad then went on to consider whether the trust was created when Amar sold his interest in the insurance company to the HCU in 2002.
Seepersad referred to the “duomatic principle,” under which a unanimous decision taken by shareholders of a company is binding, even if they failed to use the formal process of getting approval from the company’s appointed board of directors.
“The principle, in essence, disentitles persons from relying on procedural flaws to disregard otherwise legitimate corporate action,” Seepersad said.
However, Seepersad noted that the principle did not apply based on the facts of the case, as there was no evidence of a unanimous agreement among shareholders to create the trust in September 2002.
“In the circumstances, the Court finds as a fact that there was no unanimous decision by all of the Claimant’s shareholders to divest the Claimant of its interest in the building or to create the September trust,” he said.
“The Court also finds as a fact that the September agreement is tainted with inconsistencies, inaccuracies and capacity issues and the Court is not prepared to uphold the validity of same.”
As a secondary issue in the case, Amar had contended that he retained occupation and ownership of the property, as he maintained it.
Seepersad said that there was no evidence that Amar developed the property and the money he expended on maintenance was required as part of his use of it.
He also noted that the company paid the water rate. He also noted that Amar could not have obtained the property through adverse possession, as he was not in sole control of it because the insurance company operated an office in a portion of the building.
“It is plausible to conclude that any possession of the building, at least up to the termination of his directorship which he and his companies enjoyed, was likely due to the esteemed position he held within the Claimant’s corporate structure,” Seepersad said, as he also suggested that the favourable treatment he received was due to his family’s longstanding connection with the company.
As part of his decision, Seepersad ordered Amar to pay $300,000 in compensation to the company for the period that he used the property after his relationship with it ended.
While the company claimed that it should be paid over $3 million in compensation, Seepersad ruled that it was only entitled to nominal rental value, as it provided a valuation from 2006 and not a recent one which considered the current economic climate.
The property was valued at $8 million in 2008.
Seepersad gave Amar and his companies one month in which to vacate the property and granted a 28-day stay of his judgement. The company was represented by Douglas Mendes, SC and Jerome Rajcoomar, while Kiel Taklalsingh, Vivek Lakhan-Joseph and Parisa Ramsahai represented Amar and his companies.