Land transactions are known to be rife with opportunities for fraud and fast dealing, and a recent ruling by the Chief Justice, Dr. Abdulai Conteh, has left even the courts wondering why what should have been a straightforward and clear process has turned out to be one riddled by missteps and illegality.
On Wednesday, November 11, the Chief Justice quashed the purported auction of 3 acres of land valued as high as $3 million to clear $27,500 of tax arrears with City Hall—a transaction that occurred over four years ago, in 2005.
Formosa Investment Company Limited, owned by Houng Wen Lin of Shijr City, Taiwan, with registered office at 160 North Front Street, claimed that it bought the land in 1994 for more than half-a-million dollars. In 2005, however, the court ordered an auction of the property to satisfy tax arrears. PUP sympathizer Archie Lee and Wilson Li bought the property for less than half what Houng had paid, and almost immediately sold it to Williams Y.C. Chen.
Formosa cried foul and sued.
After having heard all the evidence, Dr. Conteh called on the Registrar of Lands to rectify the situation by canceling the registration to Williams Y. C. Chen and restoring title to Formosa.
The public auction appeared to be a private deal, with the lands in question having been sold at a grossly undervalued price, through a procedure that bypassed safeguards in the law for due process, amounting to an arbitrary deprivation of property, the court’s ruling indicates.
“The sale strikes me more like one by private treaty between the supposed highest bidder, the licensed auctioneer and possibly officials in the Belize City Council,” the Chief Justice commented, before he ordered the defendants to pay Formosa’s cost of court.
Not only had the triggers to put the wheels in motion for the public auction not been put in place, but the said auction reportedly never happened in public.
Summarizing the civil suit, the Chief Justice noted that, “…the pith and substance of the claimant’s case is that it was adjudged ex parte as owing property taxes on the property in issue in this case, in the amount of $27,000 plus $5.00 costs on 9th February 2005, on the application of the Belize City Council, and it was never served summons or received any before the adjudication, contrary to provisions of the Towns Property Tax Act.”
The local authority, in this case the Belize City Council, has first charge or priority charge on such properties. Formosa was in tax arrears from 2000-2005, and on February 9, 2005, the court ruled that it should pay $27,505 for tax arrears and cost of court. The Belize City Council had not received payment even then, and the property was sold on August 10, 2005. The court was led to believe by at least three contradicting testimonies that there was no public action.
The claimant said that he had bought the property for $540,000 in 1994. Real estate appraiser, Emerson Burke, had valued it for $2.6 million to $3 million, and Clinton Gardiner (former Commissioner of Lands and Surveys), at the request of attorney for Archie Lee, had valued it for $725,000.
The Chief Justice emphasized that the reserved prices for the lands (the limit under which Government will not sell to a bidder) are, by law, to be fixed by the magistrate, but in the memo from the magistrate to the then mayor, David Fonseca of the People’s United Party (PUP), it was “singularly omitted.”
The auctioneer, Doyle Prince, claimed that it was Fonseca who had told him of the reserved price in a discussion.
CJ Conteh said this was unacceptable, since reserve price setting is by law the purview of the magistrate.
When the court asked Archie Lee how he came to offer $200,000 as his bid—the same $200,000 that the defendants say was the reserved price—he claimed that, “…it was just by chance.”
The court cited conflicting testimonies from Doyle Prince and his partner. Prince told the court that in closing the bid, he struck his auctioneer’s hammer on the bonnet of his Bronco.
However, Marie Lewis, who accompanies Prince at times, told the court that he banged the hammer on a book. She told the court that the vehicle had been parked far away from where the auction was held.
Attorney Emil Arguelles (who was later appointed and who now serves as Speaker of the House of Representatives) gave testimony to the court in 2005, signaling that when he showed up for the auction at the advertised date and time, he waited a long time—to no avail—and later learned that no auction was actually held. (We asked attorney Michael Young, who represented Formosa, what the legal consequences are for lying to the court; he said the court did not mention prosecution.)
The following day, Prince advised Arguelles that the property had been sold to A&W Limited on August 10, 2009. Arguelles, who was interested in the property for a corporate client, protested the sale to the Belize City Council.
Selling the property without following the correct process resulted in the unlawful deprivation of property, the court indicated.
The court’s summons was published in the Gazette, but should also have been published in a national newspaper giving three months’ notice before the sale. A notice of the auction was published in Amandala, but this was less than 3 months before the sale and so could never satisfy the legal requirement.
Because of the failures to follow due process with the publication of the summons, the CJ concluded, “The auction was at the very least premature,” he said.
The law also gives authorities the option, giving the discretion to the magistrate, to sell only a part of the land to recover the tax arrears in question when the value of the property far exceeds the tax arrears – in this case $200,000 (reserve value) versus $27,500.
After his analyses, the Chief Justice ruled in favor of Formosa, the claimant, and awarded costs, to be split evenly between the four defendants: Archie Lee, Wilson Li, Williams Y.C. Wen, and the Belize City Council.
According to Attorney Michael Young, SC, a dollar figure has not yet been fixed.
As for the reversal of the sale of the land, he said that while the Chief Justice did order a rectification of the lands registry, he also verbally communicated that the reversal remains on pause until the tax arrears of $27,500 are cleared.
Interestingly, the Belize City Council’s most recently published list of tax arrears in the newspaper (appearing today in the early release of November 22 edition of The Guardian – the ruling party newspaper) specifies 43 properties for which Chinese owners are being asked to appear in court on Monday, November 30.
Archie Lee’s name appears for tax arrears dating back to 2004, with average yearly rates of $300 to $500. After being on a collision course with the UDP-led City Council, however, Archie Lee has left Belize.
The City Council can, by law, also move against the property of Lee.