PHILIPSBURG--The Government of St. Maarten must start occupying its new government building within 12 months, the Court of First Instance has ruled. The new building, which was completed in 2008, has largely been empty whilst the government has rented various other buildings from which it has been operating.

 

RGM Ltd, the developer of the government building on St. Maarten, had initiated legal action in 2012, four years after the building was completed, in order to obtain a court order against the Government to force it to start occupying the government building.

 

Both parties had signed a development contract on November 5, 2003, which led to the new building, located on Pond Island, being developed at a cost of US$ 16,200,000 in total, out of which $12,2 million were building costs.

 

The project was executed by Trinidad-based commercial real estate development company RGM, which funded the building costs, executed the project, and retains ownership of the building.

 

The building was funded through a system whereby RGM paid the building costs and the Government, who are leasing the building, pay off these costs in rent to RGM over a period of 15 years. After this period, RGM is to sign over the ownership of the building to the Government.

 

A contract between both parties stated that maintenance and servicing of the building to maintain the structural integrity during those 15 years will be the responsibility of RGM, however, the Government is responsible for all other maintenance, including broken windows, lights, furniture and fittings.

 

A lease agreement was signed by both parties stipulating that the building must be used solely for the purpose of government building, and may not be used for another purpose unless by agreement of the landlord (RGM).

 

The Government has, since the completion of the building, not moved in. Although the National Archives have been moved into the building, no staff members are based inside, and the building has mostly stood empty.

 

The contract between RGM and the Government had specified that the Government would be responsible for outfitting works inside the building, such as desk lamps, furniture, telephone equipment and partitioning of work spaces.

 

In May 2011 RGM sent the Government a letter, expressing concerns that outfitting works had not been completed, that the building remained as yet unoccupied, and that the building had started to deteriorate architecturally and infra-structurally as a result of this.

 

The building's plant and equipment, such as generators and elevators, had also deteriorated by not being used.

RGM also commented that the building had been left unsecured, and that windows in the building had been damaged, leading to rodents and birds gaining access, and water ingress and damage occurring.

 

Acting Secretary General of Ministry of Public Housing, Spatial Development, Environment and Infrastructure VROMI Louis D. Brown responded in a letter dated June 11, 2011 that "We recognize from our end the need to an urgency to get this project back on track, and to strive to occupy the building as soon as possible."

 

A year later, however, the building was still unoccupied and Trinidad Risk Assessors commented: "Due to the building being untenanted for four years, in some respects it could presently be considered unsafe to occupy due to incomplete outfitting works and non-commissioned/maintained equipment that present an unsafe work environment. In addition the building appears to have become infested with vermin of various kinds." The letter further reports health hazards due to animal faeces and vegetation growing inside the building.

 

The government, meanwhile, has always paid the agreed rental fees to RGM.

 

In its court action, RGM demanded that the Government of St. Maarten should start outfitting works inside the building within 15 days after the verdict, move in within six months and start maintenance work within seven days. RGM also asked to be paid compensation for damage caused to the building by the Government not honouring the contract made.

 

RGM argued that the value of the building is decreasing by being unoccupied, and by the damage resulting from this as per the letter previously mentioned.

 

The government in response asked that RGM be ordered to complete, within two weeks, all repair works necessary to bring back to standard the roof construction, the electrics, damaged ceiling and walls, the trench and cables and pipes, caused by the building not having been maintained.

 

The government argued that RGM would be responsible for these repairs as per the signed contract, and the government maintains that RGM has not completed works to maintain the "base building."

 

The government had further argued that, as it pays the rent, it is entitled to use the building as government building, but that it is not obliged to do so. The court disagreed and ruled that the Government must use the building for the purpose for which it was built.

 

The court further ruled that, since it is impossible for the building to be used for the purpose for which it was built without outfitting works being completed the Government must complete these works. The court did not accept the Government's argument that it has insufficient funds to have these works completed, because, even if this was the case, the Government must still fulfil its contractual obligations, and secondly, NAf. 4 million a year will be saved by the Government moving into the building.

 

A letter from Committee of Financial Supervision CFT showed that the Government can afford the works: a loan had been approved, but was never drawn by the Government.

 

With regards to the argument that RGM should be held responsible for repairs to the building, the court referred to the fact that the building was completed on March 31, 2008, and that a "certificate of final completion" was counter-signed by the Government, and that after that date, the Government was responsible for the building.

 

The Government argued that RGM should be held responsible for the maintenance, however, the court decided that insufficient grounds were presented by the Government, as it did not show how the fact that lack of maintenance by RGM caused the Government not to be able to use the building for its purpose.

 

However, the court refrained from ruling about which party is responsible for which part of the maintenance of the building, as a separate case about this has been brought to the Joint Court of Justice. The court also refrained from ruling about which party should bear responsibility for legal costs, as the case will only be fully concluded after this remaining matter has been dealt with by the Joint Court.

 

The court stated that the Government can no longer use faults or defects as an excuse not to occupy the building. This ruling also applies to any request for payment of damages by the government.

 

With regard to the Government demanding payment of damages for lack of maintenance, the court refrained from ruling due to the fact that this is currently under review by the Joint Court.

 

The court ordered the Government to move into the new building, and start using it as its government building within 12 months of the ruling, and to keep using it as such for the remainder of the 15 year lease. The Government was ordered to pay US $5000 for each day it has not moved in after the 12 months are finished.

 

Although the court agreed that the Government is responsible for outfitting works, it turned down RGM's demand that the Government should start these works inside the building within 15 days after the verdict.

 

The court also turned down the Government's demand that RGM completes repairs to make the building suitable for occupation by the government within two weeks.

 

The court stated that damages will be payable by the Government to RGM, however the exact amount is yet to be determined.

Further decisions are held until after the related Joint Court case, which will deal with the issue of which party is responsible for which parts of the maintenance work in the building.

 

Willem Nelissen, attorney for RGM, said: "We hope that with this ruling the government will finally start using the government building for which it was designed and realized."

 

(The Daily Herald)