PHILIPSBURG--The Joint Court of Justice has quashed a ruling of the Court of First Instance of August 12, 2014, which had declared null and void the disputed December 16, 2010, auction of Pelican Resort and Club.

 

In the court case on the merits, the former owners of Pelican Resort, now Simpson Bay Resort and Marina, had successfully challenged the legality of the auction, which was called after the owners of the resort fell behind with their mortgage payments.

 

As a result, the Court declared the transfer of the resort from Quantum Investment Trust (QIT) Ltd. to Simpson Bay Resort Owner Company B.V. (SBROC) null and void.

 

The Appeals Court, however, was of a different opinion and did not have any objections with the auction and the transfer of the resort’s ownership, it emerged from Friday’s ruling.

 

Lender Quantum auctioned-off the resort in a public auction on which it submitted the only and winning bid. After it became the owner of the resort, Quantum transferred ownership to affiliated company SBROC in a so-called “Deed of Command and Notarial Declaration of Payment”

signed on January 26, 2011, by notary Henry Parisius, who is now retired.

“Buyer in the auction has paid the aforementioned purchase price on this date, and…the buyer has complied with all other obligations deriving from the General and Specific Conditions of the Auction,” it was stated in the deed.

 

The court case revolved around the question of whether all obligations deriving from the general and legal conditions of the auction indeed were complied with.

 

According to Foundation Advocacy Pelican Resort and Club (Stichting Belangenbehartiging Pelican Resort and Club), and two individual timeshare owners from the United States, this was not the case.

Robert Russo and Franklin Biddar were participants in the PCIP Investors programme, through which Pelican Resort’s owner had borrowed money to renovate the resort. Both had lent the resort US $100,000, but never were paid back.

 

Represented in this case by attorney Gerrit van Giffen, the Foundation and the two Americans maintained that the purchase price of $30.5 million for the resort was never deposited with the notary. This was deemed to be against the law, which states that a transfer of funds on real estate must always proceed via a notary.

 

QIT apparently had attempted to write-off the debt of the previous owners in lieu of payment when it took over the property; however, a settlement such as this is prohibited; the lesser Court ruled a year and six months ago.

 

Quantum, SBROC and the notary successfully appealed this decision. The Appeals Court did not establish that the conditions of the auction had been violated, but did hold the notary liable for damages incurred due to “irregularities” during the transfer of the property. However, the mere fact that the purchase money was not deposited with the notary did not imply that buyer would not be entitled to ownership and that mortgages and liens would still be in place, the Court of Appeals concluded.

 

More than five years after the auction it could not be established that any interests had been violated, the Court said. The cost of execution was paid by mortgage holder and seller Quantum directly, and the purchase price was paid in full as the price was lower than the full mortgage claims.

 

Other elements in the pleadings, such as a possible conflict of interest concerning Board Member of Tenants Association Pelican Resort and Club and Quantum’s “ultimate beneficial owner” Richard Sutton were dismissed as insufficiently substantiated.

 

The Foundation and the two Americans were all ordered to pay legal fees to the tune of NAf. 50,417.

 

“Simpson Bay Resort is extremely pleased with the ruling of the Court of Appeals, which confirms that it legally obtained the title to the former Pelican Resort through the auction that was conducted on December 16, 2010, on St. Maarten. This ruling puts an end to all possible uncertainty pertaining to the acquired ownership of “The Villas at Simpson Bay Resort and Marina” and “Simpson Bay Resort and Marina” by the corporation Simpson Bay Resort Owner Company BV,” SBROC’s lawyer Jairo Bloem said.

 

“Simpson Bay Resort has made great strides in the last five years in renovating its premises, further improving its timeshare and hotel service, thereby increasing the overall benefit to and satisfaction of its timeshare owners and hotel guests. With this ruling the Resort can now concentrate all its efforts on its core business and purpose, namely: operating the best timeshare and hotel resort on St. Maarten,” Bloem said on behalf of the resort.

 

“I, for one, am pleased that this matter has been put to rest. This was the last of almost 18 cases during the past five years,” he added.

 

The Daily Herald