Gov't facing possible $1b bill - Court set to begin hearing claim by Y.P. Seaton and companies for compensation for failed housing deal
The Government might have to tack on an additional $1 billion to its budget for the next fiscal year to pay a claim filed by businessman Y.P. Seaton and two of his related companies.
The matter is set to be heard in the Supreme Court in March as Seaton and his companies seek compensation for losses they allegedly incurred in a failed joint venture to develop 112 acres of land in Ebony View, St Catherine.
The lawsuit names the registrar of titles, the minister of housing, the Housing Agency of Jamaica, and the attorney general as the respondents.
According to documents seen by The Sunday Gleaner, the genesis of the dispute stems from the sale, by the Ministry of Housing, of land held by Seaton to a group of squatters as part of an Operation Pride project in 1997.
The land had reportedly been approved for a 500-lot housing development before it was sold. It is alleged that in an attempt to salvage the development, Seaton and his companies entered a joint venture with the Ministry of Housing and the Housing Agency of Jamaica in 2005.
"The objective of the joint venture was to provide roads, sewage, electricity, water, and registered titles to the squatter community and to develop the remaining lands as a private residential housing scheme for sale on the open market," read a portion of the document.
The Seaton companies reportedly completed 90 per cent of the infrastructure works in the section of the land held by the Government at a cost of $200 million and spent approximately $105 million on constructing the infrastructure work and model houses on the remaining lands.
Forced to stop work
According to the lawsuit, a few months after the work started Seaton was told by the registrar of titles that a part of the project land was registered with another title issued in 2004 and a caveat was against the project lands.
"Because of the dual registration issue, Mr Seaton was forced to stop all work on the project. In the meantime, interest and bank charges continued to grow," the court documents read.
It is further alleged that Seaton had to refund more than $10 million to persons who wanted to cancel their sale agreements, and efforts to get the Ministry of Housing to file a claim against the registrar of titles were unsuccessful.
The court documents charge that because of the housing minister's failure to act and the losses incurred by Seaton and his companies, in November 2010, they sued the registrar of titles for $332 with interest, which now amounts to more than $860 million.
In March 2014, Seaton and his companies sued the minister of housing to recover losses in excess of $331 million with interest. That is now estimated to have grown to $560 million.