A U.K. pension administrator is suing Crown Acquisitions Worldwide, alleging the real estate developer took its money for several land lots in a Little Cayman subdivision and failed to transfer the land or get plans approved for homes.
The administrator claims it paid for six lots, signing “house in a box” deals that included a commitment from Crown to obtain planning permission for a home, at “pre-development prices” on behalf of its clients.
It claims that Crown never followed through with the planning applications and the land lots were never transferred to the buyers.
Bristol-based Montpelier Pension Administration Services is seeking a court order to get the money back for its clients, the Campolucci-Bordi family, who bought the lots as part of their self-invested pension schemes.
They are also seeking damages and a declaration that some of the contract clauses they signed are invalid.
Lawyers had sought a summary judgment in favor of the clients, arguing that Crown had no credible defense against the action, but a judge ruled that the case must go to trial.
Justice Ingrid Mangatal’s ruling, published last week, includes a summary of the claims as follows:
The Campolucci-Bordis, including one family member who worked for Crown at the time, paid via the pension administrator between 39,165 pounds and 82,433 pounds for each of the six lots between September 2010 and January 2011.
The agreement included a commitment from Crown to obtain planning permission for a home on the site, before completion of the sale.
They claim no application for planning permission was ever made and the land was never transferred. They argue that the failure to obtain planning permission essentially voids the agreement and the money they have handed over should be returned.
“The basis upon which the lot prices were paid to Crown was that Crown would transfer the lots (with the benefit of CPA approval) to Montpelier. Crown’s failure to carry out such action means that consideration in respect of the payment of the lot prices totally failed. Crown was therefore unjustly enriched,” the summary states.
In a summary of its intended defense, included in the judge’s ruling, Crown indicates that it was inaction on the part of the buyers that prevented it from putting in the necessary planning applications.
The company claims the buyers failed to identify which type of house design they wanted from three possible options.
“Crown asserts that it remains ready, willing and able to comply with the contracts of sale and/or register Montpelier as proprietor of the lots as soon as Montpelier complies with its duty to identify which of the plans it requires,” it states.
Lawyers for the company also argued that they should be entitled to investigate at trial whether Montpelier came to the table with “clean hands.”
Lawyers for Montpelier argued that the statement of defense was the first indication that their clients had heard that there was a choice of multiple house designs.
The buyers are also contesting a clause in the contract of sale which appears to allow Crown to keep at least 80 percent of the money handed over if the sale is not completed.
The clause states, “The buyer agrees that if it does not complete this agreement, the seller may retain for itself all payments, if any, that the buyer has made under this agreement that exceed 10 percent of the lot price up to a limit of 80 percent of the lot price.”
The lawsuit argues that this is a penalty clause and is not enforceable.