A ruling coming out of the CCJ sends a warning to those paying big money to contractors hiding behind multiple companies. In this case, a company contracted San Pedro's Beth Clifford to buy a piece of property and build a house on it. They paid her companies about 1.4 million dollars - but when it wasn't built and they didn't get the land title - the court found they could only blame the companies, not the woman who owned them.
In 2017, LCW Investments entered into a contract with Green Development Partners - known as GDP - for the purchase of land in Belize and for the construction of a house on that land. The contract required that LCW wire all payments due under the contract to another company, Beltway Investment Group. Beth Clifford is the sole shareholder and director of both GDP and Beltway.
After LCW had paid the contract sum and met with excessive delay in receiving title for the land and in the construction of the house, it cancelled the contract and sued GDP, Beth Clifford and Beltway.
The Belize courts awarded damages to LCW against GDP, Clifford and Beltway jointly liable for breach of contract.
The CCJ ruled that there was no legal or factual basis to disregard the separate corporate identity of GDP, nor to hold Beltway jointly liable in the dispute.
The appeal centered on two issues: whether the Court of Appeal was wrong to pierce GDP's corporate veil and place liability on Beth Clifford, and whether Beltway could properly be held jointly responsible for GDP's breach of contract.
On the first point, the majority of CCJ judges outlined the standard that should guide courts when deciding whether to look past a company's separate legal personality. They stressed that this step should be taken only when a company's structure is abused and the Court found no evidence that Clifford had misused or manipulated GDP's corporate structure.
On the second issue, the CCJ held that Beltway acted as required under the contract by wiring the agreed funds, and that there was no evidence the money had been improperly used.
The CCJ ordered that the decision of the Court of Appeal be set aside, the High Court's order restored, and that Beth Clifford and Beltway be paid their costs.
Clifford and Beltway, were represented by Eamon Courtney and Priscilla Banner, while the respondent, LCW, was represented by Andrew Marshalleck and Jaraad Ysaguirre.
