Sat | Sep 19, 2020

$Million land war - Businessman battles MP, bank over $75m sale of property

Published:Monday | June 16, 2014 | 12:00 AM
Fitz Jackson.

Barbara Gayle, Justice Coordinator

Landowner and businessman Royden Reitte has filed a lawsuit in the Supreme Court challenging the sale this year of his 200-acre St Catherine property, known as Lodge and which was formerly Century Farms, to Cement Jamaica Ltd for J$75 million.

Cement Jamaica intends to build a new J$340-million cement plant at the location.

Reitte, who is contending that the current market value of the property is US$10 million (J$1.1 billion), has sued National Commercial Bank Ltd (NCB), which had a mortgage on the property; Cement Jamaica Ltd and one of its investors, member of parliament for South St Catherine, Fitz Jackson.

Reitte is seeking an order from the Supreme Court to stop the completion of the sale until the matter is heard. The application for the injunction is set for hearing on July 21 in chambers.

Reitte claims grave and irreparable harm will be done to him if the interlocutory injunction is not granted.

In court documents filed last week, he said that very little inconvenience will be suffered by the bank if it is restrained from completing the sale until the hearing of the lawsuit.

Reitte, who is being represented by the law firm Chen Green & Company, contends that he will be able to meet any payment that might be required to settle the first and second mortgage out of the sale of the land if he is allowed to conduct a fair and proper auction of the land under the supervision of the court.

Reitte claims that there are several parties interested in acquiring the mortgaged land at a fair value of approximately US$10 million and that the proceeds of such sale be brought into court pending the taking of accounts as to the amount required to redeem the second mortgage to NCB.

In his affidavit, Reitte states that he is seeking an interlocutory injunction to restrain NCB from proceeding with the sale of the mortgaged land to the cement company for a price of J$75 million.

WANTS FULL DISCLOSURE

Reitte wants an order for NCB to make full and frank disclosure of all matters pertaining to the mortgaged land and its dealings with him and Jackson and Cement Jamaica Ltd or any other person, company or bank, including the National Investment Bank of Jamaica (NIBJ) and the Development Bank of Jamaica (DBJ), in respect to the mortgaged land.

Both NCB and NIBJ/DBJ had mortgages on the property at the time of the sale as Reitte had fallen into arrears with the loans.

Julie Reitte Atherton, who is the agent and daughter of the claimant, said in her affidavit that she had several discussions with Jackson in connection with the sale of the land.

She said in her affidavit that in December 2009, Jackson and his partner, Armanand Nahmiache, paid US$18,000 to hold 90 acres of the land and they had agreed at a price of $900,000 per acre. Nahmiache is the principal shareholder in Cemcorp Inc of Toronto, Canada, which is the majority shareholder of Cement Jamaica Ltd. She said she was informed on May 13, 2014, when she went to NIBJ/DBJ, that the property was sold four weeks before for $75 million. She claims that NCB was aware of the negotiations with Jackson as she had instructed the bank to release her account information to Jackson. She contends that she had asked the bank for a breakdown of the loan history but never received the information so she could negotiate a settlement.

It is also her contention that when NCB advertised the property for sale by public auction, it withheld vital information about the property. She said the bank did not disclose in the advertisement that the property was located next to the main road to Mandeville as well as the new toll road, that approval had been given for the construction of a cement plant on it, or that it is in proximity to the Goat Islands, which continue to be an area of high interest that would impact favourably upon prospective bidders at the proposed auction.

She said in February last year, she told Jackson that the price for the property had increased and they were in the fourth year of negotiations, and all the properties around had escalated in price and so they had to negotiate a price that reflected the current market value.

According to her, Jackson said he would have to get the actual price because the financiers had to be informed. She sent Jackson a message the next day that the contract had expired on September 30, 2012 and there was no contract. Jackson, she said, responded that she was "grossly dishonest" and said he would no longer be negotiating with her. She said that up to January this year, she was in contact with Jackson and Nahmiache in connection with the property.

In the meantime, NCB is challenging the claim.

The bank's attorney-at-law, Dave Garcia, who is the general manager - group legal and compliance, told The Gleaner: "We will certainly be defending the claim because there are a number of significant allegations with which we do not agree."

barbara.gayle@gleanerjm.com