Two Trinidad and Tobago developers have lost their appeal before the Judicial Committee of the Privy Council in London and now face the prospect of having to repay Guardian Asset Management Limited close to $40 million due on a loan together with interest.
In a 26-page judgment handed down on Thursday, the British Law Lords dismissed the appeal of David and Leonora Deslauriers. The Privy Council comprised Lords
Mance, Kerr, Hughes, Lloyd-Jones and Briggs.
The Deslauriers are property developers whose projects have been sited in the past both in Trinidad and Tobago and in the United States of America. At the beginning of October 2007, they entered into a commercial loan under which they borrowed $18.6 million from the Guardian Asset which is a company administering pension, insurance and investment funds.
They gave promissory notes for repayment and the loan was secured by a demand mortgage of parcels of land belonging to them. The loan could be repaid at any time after the first anniversary (October 2008) and was repayable in any event on 2 April 2009. Interest was payable quarterly.
It was paid up until January 2009, but neither further interest nor the principal was repaid. After several agreed extensions of time had passed, Guardian Asset sued for repayment and interest on 20 November 2009. The Deslauriers both denied liability and counterclaimed damages.
After a trial in July 2011, Justice Ricky Rahim gave judgment for Guardian Asset on 25 October 2011. The Deslauriers’ appeal against that judgment was dismissed by the Court of Appeal on 3 February 2016.
In the meantime, there had been further dispute over Guardian’s efforts to enforce its judgment. The judge directed sale of property owned by the Deslauriers at 28-29 Victoria Square, Port of Spain, and the Court of Appeal upheld his order on 24 July 2015. There were two appeals before the Privy Council by the Deslauriers:
(A) against the liability judgment; and
(B) against the enforcement judgment.
The loan was required to help fund Hevron Heights, at upper Mendez Drive, Champ Fleurs.
Until late 2007, the Deslauriers were borrowers from their longstanding bankers, the Republic Bank. Guardian aggressively pursued the Deslauriers for their business, against their reluctance to leave the Republic Bank.
The $18.6 million borrowed was only the first tranche of funding needed for Hevron Heights, which was going to cost in the region of $60 million. The Deslauriers made it clear to Guardian that they would need more funding later, although they inquired of Guardian what differences there were between it and a conventional bank, Guardian told them that the only difference was that the loan was not repayable before its first anniversary.
According to the developers, Guardian failed to tell them of any internal or external lending limits which might inhibit its ability to make further loans to finance the later stages of Hevron Heights.
When they did ask for more money at the end of 2008, Guardian refused their application and indicated that one (or the) reason was that there were lending limits which an additional loan would exceed.
The result was that they took the loan from Guardian, and stayed with it, when otherwise they would have borrowed elsewhere from a lender who would have been able to offer further finance.
As a consequence they had been unable to complete Hevron Heights and had suffered loss of profit put at some $24 million.