Jardines Del Porto
The sacking of a committee secretary
The Cast
The developer
The Developer is Jelesa SA (Jelesa), located in Spain, its reported sole Director was Estaban Ruiz Lacourne (Lacourne). The company developed 190 apartments at the resort. The timeshare element of the resort consisted of 30 apartments (some modifications later resulted in 34 sellable timeshare units). The timeshare resorts had the benefit of 20 car parking spaces which were identified on plans provided to all the owners.
The Trustees
FNTC was the trust company and were based in Doulas Isle of Man. Also Timeshare Trustees (International) Limited (TTI). TTI is a Trust company noted in the legal documents and is now owned by FNTC
The Timeshare Sales Company
JDP Sales Limited was the authorised seller of the timeshare resort product and was appointed by “Jelesa”. The directing mind of the company was again “Lacourne”. The timeshare resort charged “Sales Ltd” with the selling of 1,734 fixed week certificates which were available for sale.
The Management Company
The resort was being managed by JDP Management Ltd (Management Ltd). Its Directors were Mrs. Cristina Goicolea (Cristina) and “Lacourne”. The main shareholder was Dorset General Holding Ltd, based in Panama the company secretary was FNTC
The Founder Members
The constitution states there were two original founder members they are identified as the aforementioned “Management Ltd” and the 2 Sales Ltd”.
To reinforce the situation and make matter abundantly clear both founder members were controlled by “Lacourne”.
The Timeshare Property
The Timeshare property (cluster of apartments) was owned by Leeside Jardines Ltd (Leeside), Its company registration is FC19727, its registered office is located at International House Castle Hill Victoria Rd Douglas Isle of Man, the Company secretary was FNTC and its Directors are/were David J Cox (New Business Director), Philip Broomhead (in-house Solicitor) and Paul Gardner Bougaard (in-house Barrister). All FNTC associates are all recorded on form 363A on the 18th of the November 2001. The Company secretary was FNTC.
The Committee
Jardines Del Porto (the club) was formed in 1986 is an unincorporated association (The Club) and prior to the 14th of April 2002 The Clubs affairs were conducted by its elected committee which consisted of 3 consumer’s members and 2 founder members. The Chairman was identified as Mr Willy Walsh. (That said, the club seems to decide on the day who was and who was not the chairman).
The 4 other members were Mr R Bell, Mr. E Lacoume (founder member) Mr. A Mutiozabal (founder member) and Mrs Astrid Saffin (secretary and committee member). Total of 5.
It’s not hard to detect a tread, in that the directing mind of the companies is Lacourne supported by FNTC his appointed trustee. The committee was however weighted in favour of the consumer owners.
This cluster Companies are designed in way for a purpose and operated in the timeshare industry for a reason. It is our opinion the purpose is to disseminate any possible liabilities and provide a distinction between the various entities. The 1st reason was to extract profit by way of sale for holiday accommodation safely without cross liability. The 2nd reason was to profit for the maintenance fees. The 3rd reason was to gain a profitable income from rents and letting services.
“Sales Ltd” sold fixed week timeshare products in holiday apartments, rented and acted as agent for rentals.
The objects of the club is defined in clause 4 on the constitution, in that the club purpose was “to secure ownership of exclusive rights of occupation of apartments for such specific periods in each year and shall be allocated to members until the dissolution of the club”.
The Sales brochure claims:-
“the best investment on the Costa Del Sol. What more could you want from an investment than security profit enjoyment and long lasting guarantee, from the time you acquire your property you can relax in the sun whilst your investment grows stronger day by day- you can let it for time you are away This is a limited opportunity for a privileged few who want guarantee their home in the sun!.
These expressed representations are misrepresentations in proven to be untrue. The only asset the consumers were acquiring was “a licence to occupy” and subject to the constitution of the club and its committee members, the payment of annual fees and the availability of the accommodation. Selling timeshare as an investment is mis-selling.
“The club” was based in Spain yet the constitution was domicile and governed under Manx Law.
The “founder members” under clause 7.2 arranged for the shares in the 2 companies (sales and management) to be held in trust by an independent trustee who will hold those shares on trust for the benefit of the members of “The Club”.
The Trust is identified in the constitution as timeshare Trustees (International) Limited. Jardines Del Porto was an unincorporated Club controlled by its committee. Clearly as the Management Ltd Company shares are owned by a Panama company the contractual arrangement to hold the shares in trust was not met, not disclosed and misrepresented. Therefore in our opinion the constitution its rules and objects were breached at inception.
As the trust company knew or ought to have known that the shares were held by another and that this other was not the timeshare owners they should have detected the flaw and protected the timeshares owner’s assets.
If-in the event that-the shareholder itself was controlled by some other trust, that control is not mentioned and/or identified and should be. That being the case and from the outset the cluster arrangement and trust arrangement has also been breached. Such an arrangement ought to have been disclosed to the members and by the trust.
It is an express term in the contract (Under clause 14.11 of the constitution) the management company shall account to the members for the income and expenditure and elsewhere in the constitution the management company was required to provide Audits. Such Audits were not provided and/or disseminated on the members. A further material breach of the obligations of the “Management Ltd” controlled by “Lacoume” was apparent and again the trust company failed to mention that fact and failing.
The constitution stated “The club” will remain in existence until the year 2020 clause 18.1. Therefore the flaws, breaches and un-audited position would continue unchecked unchallenged and unaccounted.
In the constitution under clause 18.4 it states “the net assets available at the end of the term will be divided between the members including the founder member”. That said as the stage the holdings were not the property of the trust, no such distribution could have been envisaged or achieved nor could have been divided at the end of the represented term.
The constitution was presented to consumers “Sales Ltd” and authored by Trustees working for Sales Ltd. With the evidence we have, it’s our opinion that the liability for the authoring of the constitution falls at FNTC door. The founder members Directors were appointed on the 17th of September 1992 and ignored their own authored terms.
8 years after the timeshare resort was incorporated many consumers had disputes with the resorts management and these dispute escalated over time. Delinquencies became rife, sales had collapsed and it was being alleged that massive discrepancies in the accounts existed.
Unknown to consumer was the position of the Spanish Tax authorities, they had their own suspicions and those suspicions were backed up with facts about the dubious activities of Sale Ltd and mis-declared income. So much so, they unbeknown to the consumers were investigating the affairs of the company selling renting and re renting consumer weeks.
“The club” as stated is located on the Costa del Sol (the coast of the sun) and tax authorities (in this country) had (in its past) encountered some very shady dealing.
Prior to 2000 no annual general meeting formally took place, yet maintenance fees were charged each and every year and were not fully accounted for by “Managment Ltd”. By the year 2000, 234 weeks of timeshare remained unsold and those weeks were in the ownership of the sales Ltd.
The total number of Consumer owners in 2000 was 610, who collectively owned 1100 weeks, “Lacourne” owned 41 himself and a further 41 trough a company called “Paraquim investments” (this firm may not have (in reality) existed and the address declared was later suggested by others as false) the rest were charged to “Sales Ltd”.
Between 1996 and 2000 it came to light that the unused/unsold weeks (held by the club and/or the founder member) were being rented out for profit. Equally he had been renting other weeks owned by consumer members. This undeclared income came to the attention of the tax authorities. The Spanish tax authorities investigated and raised an assessment. That assessment resulted in a liability and tax demand. The tax debt was in excess of 700,000 Euros. To ensure that the debt was recoverable the tax authorities placed an embargo against all the timeshare properties until such time as the debt was fully paid. (Tax petition 0991-08). The tax Demand appears unchallenged by “Sales Ltd”.
As the club had not held an AGM meeting and members became aware of the embargo and tax bill, a panic ensued and they collectively called an urgent meeting. That meeting was scheduled for the 14th of April 2000.
It’s our opinion that Management Ltd were clearly collecting money from consumers over many years, they were associated with renting out the apartments and by way of common directorships were not declaring the correct income to the authorities, they were not producing audits and/or audit trails, they were paying substantial monies to a trust company to perform a service, they were not checking the income and expenditure correctly which resulted in financial impecuniosities.
The consumers were entirely innocent and the committee glibly went along with what they were told by the “Management Ltd”. Each and every cluster were in breach of their duties which in turn caused “The Club” to become at risk and the expressed promises in the sales brochure where in tatters.
On the 14th of April 2000 The Club’s Annual General Meeting was held. The committee elected Mrs. Saffin (Saffin) to take the minutes. I am informed that those minutes were never been challenged and/or subject to a challenge. That being so,-these contemporaneous notes taken at the time will be viewed as an accurate records of the events which took place on the day. They were taken by an authorised agent, elected and appointed by the committee she served
Prior to that meeting many timeshare owners were aware the club was the subject to a fraud allegation by the Spanish authorities. The resulting tax bill which flowed from the undeclared income and from one of the founder member companies needed to be resolved! It is also reported the main thrust of the demand originated from undeclared sales and undeclared rental income. It has also been reported that these income streams were as a result of cash takings. Cash takings being the “Sales Ltd” preferred payment.
The Meeting
At this meeting on the 14th of April 2000 (Mr. Lacoume failed to turn up on time), that said the meeting started and discussions took place were about and allegations levelled by the Spanish tax authorities, the corresponding liability applied of the consumer club, the embargo and other peripheral matters. As Lacoume was not in attendance correct information, facts and order was difficult to control.
As all the money was collect by Mr. Lacombe’s companies and those companies managed the resale’s and letting on behalf of the timeshare consumers, he would have all the inside knowledge and all the facts so as to set the record straight. He was after all the Directing mind of both companies. For completeness the trust company were not in attendance.
Being a connected party, his asserts being at risk and needy consensus being necessary (to mount a concerted effort to defend the allegations) you might think that Lacoume would have been eager to attend, you might be forgiven for believing that tardiness would accord with an innocent man, after all he was in possession of that knowledge, he could impart knowledge of the allegations and he could set the record straight and bring on board to the flock of disgruntled consumers who attended the meeting so as to stave off the unfounded allegations. If innocent of the allegations you would (would you not) attend and disseminate information advice and expected truthful answers. That said: if the allegations were truthful in part or whole. Lacoume outward expressions would be quite different. An innocent man stands his ground whist a cheat avoids.
Lacoume arrived with his co associated director Mrs. Cristina Goicolea (Cristina), late and was immediately challenged about the tax fraud allegations, so as he could explain. The Saffin minutes reflected no cogent explanation.
The meeting continued in an attempt to get to the bottom of the worrisome events. It was disclosed by Mr Walsh (Committee Chairmen) that the founder member had a substantial stock of unsold weeks predominantly white and blue weeks. To save “The Club” the committee were exploring the opportunity in to amalgamate the consumer weeks into a smaller and independent resort. The trust prior to the meeting objected. That objection was never fully explained in the meeting. The committee lead by Astrid Saffin asked Cristina (Lacoume other Director) if the founder member had paid their share of the maintenance fees as clearly the ordinary member had.
“Cristina”, confirmed the “founder members” had not paid any maintenance fees for 6 years and from whence the club commenced being a timeshare resort. This statement was later altered after discussions with Lacoume so to reflect that his belief was that founder had in fact paid 3 years part payments and 3 years no payment at all.
This revelation (if truthful) explained that despite the “Management Ltd” and “Sales Ltd” earning income from the club assets and that profit filling the pockets of Lacourne controlled companies they were not paying their fair share of the costs associated with underpinning the timeshare weeks they profited from. Would that same concession disseminate on other members or are ordinary timeshare owners treated differently?
Clearly they were treated differently as if they did not pay the maintenance the charges levied they were chastised and chased by debt collectors. Does the constitution infer a right that the “founder member” and its associates are absolved in some way from the maintenance liability they themselves set? The constitution does not infer such a benefit. The debt was due and owing by Lacoume and to the club. Lacoume controlled companies, they were liable and the debt resulted in the clubs inability to function correctly. More importantly the actions did collapse any opportunity to obtain the promised investment opportunity quoted in the sales literature.
This statements given reflex’s that the “founder member” had expected to pay the maintenance fees but by his own volition and he had cancelled those payments. Such an act conveyed a secret profit to him and/or his entries and to the detriment of the others in the club.
Saffin explained: she has a list of outstanding debtors and the amounts they owed to the club and was perturbed that no reference to the “founder member” debt was record and the financial statements or the records of the contracted “debt collectors”. In short those debt collectors were not engaged against the “founder members” debt or that of the founder members directors. Equally the trusts had never questioned or received satisfactory answers on the matter.
Again the “founder member” abused their position in the club and for their own gain- avoiding liabilities they were responsible for.
After a woolly explanation from the “founder member” Saffin suggested the Chairman contact the trust company.
Mr. Greenwood (a timeshare owner/member of Jardines Del Porto and attendee at the meeting) asked whether those unsold and unpaid for week could be repossessed by “the club” and given to “the club” in accordance with the constitution “Christina” explained they could. After Saffin embraced this point and demanded more information and legal advice Lacoume flipped, became aggressive and hostile began shouting at the attendees.
Saffin being keen to get to the bottom of what she thought were dubious accounts and worrying charges and possibilities of sequestrating the perpetrators assets to cover the short fall demanded answers from “Lacoume”. Being the recipient of the allegations and cornered “Lacoume” in short “spat out his dummy” (at the gall of having to explain himself) and preceded to leave the meeting). No answers were given, no explanations (as to the non payment of his own maintenance fees) were proffered and no defence as to the tax fraud was forthcoming from him. At this stage Lacoume announced that he and his management company was immediately withdrawing its service and would no longer act for the timeshare resort. In short this is a resignation of the 2 legal persons, himself and “Management Ltd”.
He left the meeting “dummyless” whilst the attendees embraced mystification.
The attendees and timeshare owners were astounded at the unprofessional acts of Lacoume and cries of “what the devil do we do now” echoed and reverberated around the room as the timeshare club was being held to ransom by Mr Lacoume.
Objectively the committee were not professional committee members they were not full conversant with the effects of such wanton disregard. They objectively just wanted to protect the many thousands of pounds they have invested and protect these investments for themselves and the community they represented.
After the meeting Mrs. Saffin tried to canvas answers from Lacoume and Cristina (his assistant Director) in a less hostile environment. In shot the 2 directors (this stage) were in “information lock down” so after Saffin explained matters to the Chairman he instructed Mrs. Saffin to make contact with the FNTC trustees via its Director Mr. Declan Kenny.
The club they represented had after all paid FNTC many 10s of thousands of £ for its services and as they authored the legal documents and they were experts and the trustees of the consumers asserts you would expect that they would be best placed to assist this bludgeoned club.
The club believed the maintenance company’s shares had assets and those assets (including shares) were held in trust by FNTC and for the members (clause 7.2 of the constitution).
In an event like this, you find out who is on who’s side. The decision which each party makes and how they deal with future matters leaves a trail and that trail can be assessed after the event and will determine an outward expression of their allegiances.
Clearly the Trust Company had a duty, as that duty was expressly represented in the trust contract they were bound too. For the services provided clearly the trust company must receive some remuneration for the commission and someone would pay for those services. As the consumer paid a single payment to the Management Ltd (historically) they did so for a purpose. That purpose was to pay over sums so as to discharge the liabilities of the club so as to preserve and protect the cub its assets including but not limited to its “rights to occupy”.
The managing agent only therefore collected from the timeshare week owners their contributions and did pay the trust company on behalf of the committee who represented to club members.
This said FNTC are contracted to the members to preserve and protect the club its assets and its future, they pay for that service and they are reasonable for the authored contracts.
“He who pays the piper calls the tune might be worth now considering”. History tells us that if you pay for a service it’s those paying people who ultimately expect a service they pay for. So FNTC should jump into the consumer’s boat and they boat only. Then again we are dealing with timeshare.
It was reported and acknowledged that in 1999 the FNTC Trust had Billed 3,000,000 (3 million) pts (£10,700. The invoice was based upon the turnover of the club which in 1999 which was 39 million Euros. Therefore the Trust received approx 10% of the fees paid by consumers.
If those consumers did not get satisfaction and wanted to expel the trust company clearly FNTC would lose substantial income for the duration of the clubs existence. As the club was to be existence till 2020 and this problem had occurred in 2000 FNTC stood to lose approximately £200,000 of future income if they were dismissed.
Which side should you be on could be a consideration?
FNTC were responsible for the contracts they authored, equally they would be liable for the other trust company they acquired.
Lacoume was the director of Jelesa SA owned the entire resort, Lancôme controlled and was a director of the 2 founder members companies and did own a lot of unsold timeshare weeks and the corresponding votes. He also held the existing money in FNTC bank accounts, the contacts, and the members list and had the benefit of the landlord’s rights. Any all needy assistance to unravel the claimed Spanish tax fraud and corresponding tax bill associated with the mis-declarations was withdrawn. The remaining tax liability exposed the club to a massive financial exposure and possible liquidation.
If liquidation did occurred and the club dissolved, the role of FNTC could be investigated liability could be extended to them and they could lose substantial income streams.
To sum up:-
- The club was the subject of tax evasion demand and fraud allegation
- Massive unaccounted debts of non payment of maintenance fees.
- A trusts company’s refusal to reduce the club and protect its members
- A failure to provide audited accounts
- Utter unprofessional abandonment.
- Gross neglect and thief by the management company JDP Management Ltd.
In this back drop FNTC had acquired Timeshare Trustees (international) Limited and as a result FNTC was no longer independent (they had relationships or connected interest with Lacoume Companies). Saffin later knew of the possible breach of the trust terms and advised others a conflict existed. Her reason and evidence was based on her claim that FNTC acted for the developer and at least 13 other companies which were associated with Jardines del Puerto Club, thus the ordinary meaning in the deed of trust was breached.
Saffin, as instructed contacted FNTC (in particular Declan Kenny) and at this time was unaware of any conflict.
Sometimes right and wrong is thrown out the window in preference to profit. I am not saying this happened as the events speak for themselves and will accord outward expressions. Below is what Saffin experienced, what she wrote and what other parties did in the months and years preceding the contact with FNTC.
The events post 2000
After Saffin hounded Kenny (FNTC Directors) she eventually obtained a replied from them on the 8th of August 2001 (4 months after her initial desperate plea). Kenny explained in his view the only assistance which could be offered was by Geoff Price of-Dream Vacations-however this offer would have to remain confidential until such time as constituted. The skeleton offer was enclosed by way of 2 appendixes. In short, Dream Vacations would assist the club on the condition that they took a commercial commitment in “the club”. It also contained a further caveat in that the some of the club weeks would have to be re-sold as floating weeks. Needles to say the FNTC suggested enterprise and proposal was supported by FNTC who believed the proposal was fair and reasonable.
Noteworthy was this communication was dated some 3 years after the introduction of Law42/98.
FNTC cannot escape from a lack of knowledge of this law as on the 7th of May 1999 they confirmed to Lacoume the following “However Jardines del Porto as a pre-existing structure to the law is allowed to continue in its present form As a pre existing schemes are concerned the immediate effects of the new law relates to the sale and marketing”
FNTC knew that to introduce a floating system would require a further deed of adaptation and that deed would have to be notarised and filed with the Spanish land registry.
Being authors of such products and privy to Law 48/98, FNTC also knew or ought to have known that a floating timeshare agreements would be voidable in any event, because they failed to specify the particular property comprising the subject of the agreement (again contrary to Law 42/98). Such contracts have been later determined as voidable and unlawful.
To therefore consent to such a proposal might be view as dubious and therefore recommending such advice could render FNTC culpable if any such adventure proved to be unlawful.
On this occasion and as said FNTC backed a proposal to amend the constitution and sell contracts in contravention of the spirit of law 42/98.
The basic income and expenditure accounts of the club were sent to Declan Kenny of FNTC by Saffin. These income and expenditure accounts were provided by Lacoume and in the words of Declan Kenny, “they are abysmal”.
By FNTC’s own words the accounts were abysmal therefore how could they have possible determine each and every year that the assets of the club were safe were protected and had prospects of a continuance of the sales promises made ?
Ought not FNTC investigated these abysmal accounts provided by the entity who paid them in previous years and on behalf of the club they represented could be a real question. Alas no such report was conducted and/or given to the committee as we do have Saffin records. The abysmal accounts appear not to be taken into future account when considering other options.
FNTC confirmed to Saffin they were not aware of the dire circumstances that the club was in. Through Mr. Kenny he agreed in January 2001 that if Saffin had not done what she had done, the timeshare club would be in liquidation.
This statement was a relief to Saffin, However if FNTC had done what they were supposed to have done “the club” would not have been in such a state. If Kenny could see at a glance that the accounts were abysmal and that the club finances were in a mess why did he dot do something about the matter before Saffin raised it?
At this point, FNTC claimed it was not responsible for the activities of JDP Management Ltd as it was outside their remit. In truth this is true, FNTC are not responsible for the actions of another’s, but what they are be responsible for is their own failings, actions, inactions and could be liable for their own neglect, which could have averted a continuance of the JDP activities.
After all they could have investigated the accounts and instigated full independent audited accounts in line with the constitution.
In reality, FNTC did not check audited accounts as no such audited accounts were available. Under the deed trust Section D it states, all the authorised and issued share capital in the owning companies has been allotted or transferred to the trustee or as the trustee may direct (all of such share capital together with all other property which may from time to time be transferred to the trustee by the company or otherwise to be held for the benefit of the club upon the trusts of this deed shall be hereafter called the property). The trustee has agreed to hold the same upon the trusts and terms hereafter mentioned.
It is our option after reading the trust deed that trustee contract, imparts an explicit duty to protect the interests of the property which the members owned. As the management company had failed over several years to provide audited account in breach of Clause 11.5.6 of the constitution. It’s a fact such a breach was in the knowledge of the Trustee and they did little or nothing to protect the trust property.
In contrast when they knew a breach had occurred, FNTC could have rained holy hell down on “Management Ltd” and in support of the consumers but they did not, they could have intervened in the tax fraud yet again they did not. They had every right to do so but they avoided meaningful consumer support.
If audits are not completed the money paid by the members of the club were not being properly accounted for and in the event of financial misdemeanours, the club could become insolvent. If that occurred, a calamity would surly occur. The purpose of the trust is to ensure that such calamities did not occur and therefore it is our opinion that a breach of duty claim ought to be levelled at FNTC.
In an effort to correct the insolvent position Paco Lizzaria (FNTC ‘s lawyer in Spain) offered with Declan Kenny a proposal to find buyers for 650 weeks of timeshare which were included in the club’s inventory. If the transaction was completed of course money would flow from the transaction, however the club would lose its assets, FNTC were employed to protect. If they had held Lacoume accountable then money would flow and contrary to the 1st suggestion the assets of the club would remain in tack.
In March 2001, FNTC took over a meeting of the committee with Lisa Gilchrist (reportedly from RCI) and stated that the only taker for these weeks was a company called Universal Vacation Club (UVC).
Declan Kenny explained to the meeting that he could not get any other company interested in acquiring the 650 weeks and insisted (on the day) that the committee must decide there and then whether or not to accept the offer.
This is an unfair practice and creates a level of urgency which deprives others of reasonable consideration. It also is a practice which is more akin to a timeshare salesman not a trustee. (Urgency ought never be employed is complex decisions)
Saffin reported her finding to the committee who became quite wary of the FNTC proposal and immediately after the meeting instructed her to make contact with others. She make contact with others including Barratt’s and another independent auditor.
Both enterprises gave her names of other companies who might be interested in assisting “the club”. In possession of this information, she did make contact with the organisations suggested and both were very pleased to be invited to assist and also very interested in buying into the resort.
Saffin later discovered a further two companies were also interested in buying into the resort totalling 4 other interested parties and contrary to the advice of FNTC. After the realisation Saffin made allegation implying that FNTC were favouring their own nominated company and attempted to restrict the amount of time the committee were able to deliberate the issues.
Having regard for the statements made by Saffin that “four other companies” were also interested in investing in the clubs inventory, the question has to be asked “why was an independent FNTC trust acting in such a manner” and contrary to good practice?
After consultation with the Timeshare Consumer Association (TCA), Saffin received advice from Sandy Grey that UVC, (the FNTC preferred company) was already in liquidation.
Clearly due diligence eluded FNTC.
Being in receipt of the other offers and the knowledge that FNTC’s recommended company DVC was in liquidation, the clubs committee held another meeting the next day and publicly informed the members of the events which had transpired and the information gleaned.
The entire committee agreed the deal being offered by FNTC was in their words, dodgy, and they believed they were being bullied into it.
It was left to Saffin to contact Declan Kenny on his return to the UK which she states she did.
It was also agreed the committee would send out a newsletter to the owners. When this information was disseminated on the consumers, Declan Kenny came to the realisation that he had made a mistake as to the solvency of the DVC, however did not apologise for his error in judgement. At this stage one of the for independently contacted companies was Lifetime Vacations who offered the committee 30,5000,000 pts equalling £109,000 for the inventory and would pay the sum within 30 days.
They also explained they would hold any enterprise liable for paying the enterprise (inferring the founder member), they also implied the club could save a lot of the costs of the FNTC annual fees.
Calls for the sacking of FNTC were ricocheting and the owners were about to engage with another company who could not be controlled by FNTC Lacoume or Jelesa SA.
On the 9th of August 2001 FNTC introduced Geoff Price’s Dream Vacations/Costafield who offered (on behalf of DVC/Costafield) to acquire the 650 weeks being sold. The offer was forwarded to the committee by Declan Kenny.
Notice of the meeting was therefore given to the members on the 20th of September 2001 by Saffin. The founder member was aware of the meeting and did attend the meeting convened.
On the 20 of August 2001 Mrs C Goicolea confirmed that Lacoume was aware of the proposed meeting and sated that the date “suits him” so the founder member and the entire ocmmitte were aware and agreed to the meeting being held.
Therefore the stage was set and two competing offers were received. The 1st backed by the committee Lifetime vacations Espana SL, and the other backed by FNTC Costafield SL.
If the 1st option was chosen FNTC could be ousted if they did not negotiate its fees.
A meeting was convened on the 21 of October 2001 in London.
In attendance at the meeting
The Founder Members
Mr. Esteban Lacoume
Mrs C Goicolea
(both attended by telephone).
The remaining Committee members
Mr H Jacidia
Mrs D Payne
Mrs A Saffin
Mr David Empson (co-opted)
The Trust
Mr Philip Broomhead FNTC
The meeting was opened Broomhead claimed that he was holding fax from Lacoume purporting to suggest that the AGM could not take place.
This being his claim and Broomhead supporting Lacoume position the attendee became worried but determined to move on.
Philip Broomhead went ahead and explained that if the meeting proceeded he assured them that the Lacoume would take personal legal action against the committee.
That fax was not given to the committee the threat was real and apparent and levelled and supported by the Trust company.
Being faced with legal action and that legal action being suggested by a solicitor the entire attendees became worrisome. It’s our opinion at best Broomhead should have taken the position that he owed a duty to the club not the “founder member” that the events which lead to the meeting should be discussed with the committee privately before crashing the meeting.
The meeting appears entirely lawful and that it could be suggested that Broomhead was defending his own income streams and that of his preferred directing mind.
If these allegation levelled by Saffin are proven consequential legal penalties will follow.
To ensure that a meeting was convened and the expressions of over 200 members attendees was known, the committee went ahead with a general meeting instead of an AGM.
Apart from other matters all 200 attendees were incensed at the mis-management of the club and its affairs and they wanted both “Sales Ltd” and “Management Ltd” sacked immediately due to a lack of trust.
It was proposed by either the trust or the “founder member” that the present committee should resign in compliance to the clauses in the constitution. The proffered reason was to allow new blood into the committee. As it had been a custom and practice that the committee stay in its role once elected, as the committee was up to spped on the issues and were defending the 200 consumers owners the tabled motion for new blood was rejected. The attendees did not want the present committee to be changed, they did not want an interference and wanted to ensure that they were properly represented.
Declan Kenny wanted to modernise the constitution and Saffin was appointed to investigate with Kenny the changes required.
The collection of management fees would be taken off JDP and placed with a company the committee chose.
3 proposals were tabled and it was decide that decision to appoint should be made by the owner’s representative.
Saffin would arrange the bank account.
All rental fee collected by “Management Ltd” would be returned to the timeshare owners and a full list of those owners would be provided to her by the “Management Ltd”
Full details of “Management Ltd” maintenance fee debt was required and agreed to be provided.
At that meeting the members demanded that the committee took back control of the collection of maintenance fees and place them into a separate bank account they controlled.
The meeting ended.
What followed next is outside the scope of my knowledge as no doubt the ramifications of the consumers’ expectations did not materialise and steps were being taken to engineer another meeting so as to obtain another result and more favourable to the founder member and the FNTC.
What we do know is that the FNTC recommended associated Director of Dream Vacations /Costafield was appointed as a director of “Management Ltd” by Lacoume. The appointment was presented by FNTC. Therefore the dissenting Mrs C Goicolea was sacked and the two directors forward were Price and Lacoume.
Price (no a director) engaged with FNTC, commenced communications with FNTC and issued a news letter to all members of the club. That news letter (apart from other matters) suggested that Saffin refused to attend a meetings with him as she was not satisfied that his appointment was real/relevant
He stated that Saffin firm belief was that the clubs problems derived from the activities from Lacoume controlled companies and this was without hard facts.
He claimed the accounts were clear and transparent. Saffin had been keen to make members aware of the LVE offer and that his advice was that member should not take the offer (his being better).
He argued in the news letter that the other proposal was wrong and that his forward thinking and maintenance budget was the best and would serve “the club” better.
This in short is him reinstating the management company who Saffin complicit or associated with the tax debt in the first place. His appointment did not receive any decent of FNTC.
A complete difference of opinion then occurred with allegations being raised by Saffin and countered by FNTC and Costafield.
Under clause 11.4 the committee shall have the power to do all things that may be necessary for carrying out of the objects of the club and for its general management
In the meeting date 14th of April 2000 Saffin was elected the committee secretary and Lacoume resigned. Further Lacoume and “Management Ltd” (a founder member) resigned and those resignations were accepted by the remaining committee members.
Therefore Management Ltd and Lacoume had no voice in the club whatsoever and neither did other directors of “Management Ltd”. Yet with the assistance of FNTC they called the meeting, they were alleged to have interfered with the committee meeting they had no voice in. I accept the spitting out of the dummy (as discussed earlier) might have been a knee jerk reaction by Lacoume but these facts ought to have been in our opinion take into consideration by FNTC.
On the 6th of February 2002 Price took control of the management committee and immediately called a meeting to be held in Spain. He also took control of the site management. Such meeting can only be called by 2 committee members and Lacoume had resigned therefore the calling of the meeting was dubious. Saffin was unable to arrange attendance and in any event did not call the meeting.
In accordance with clause 11.5.1 of the constitution she nominated a proxy but Price rejected that nomination. Philip Broomhead was present and condoned the events which took place. A corum is alleged not to have been formed however no co-opted members were invited.
Price was now taking over the running of the management company.
On the 18th of February “sales Ltd” appointed Price also as its representative
And on the 15th of March 2002 “Sales Ltd” was dissolved by the Isle of Man Treasury Income Tax Division. The company on the 8th day of April Files a statement stating that it had no debts which again is contra to the £500,000 debt it is alleged to have owed to the club.
At a further meeting over 200 proxy votes from existing consumer owners were in favour of appointing LVC to assist the club and to change of trustees from FNTC to Henderson’s.
Costafields only had 9 votes but Saffin alleges FNTC ignored the democratic process of the owners. Between October 2001 and January 2002 Saffin claims FNTC liaised with Costafields and the founder member so as to put Costafields in the position of Management Company. Saffin was screaming that a big conflict of interest was occurring and that FNTC was condoning it.
During this period Saffin alleges that Mr Price and Costafields were spreading malicious falsehoods about her. Despite these purported allegations, Costafields were a party to the AGM in May 2002.
At that meeting all the proxy votes were opened and counted beforehand and by Costafields It was alleged that discrepancies existed in the counting of the votes. FNTC however did not challenge the discrepancies and again Saffin levelled serious allegations of breach of trust.
By the 21st September, 2002 and after being presented with a substantial bill from Costafields the validity of that bill was questioned. It transpired that the vast majority of the bill was not applicable to the club. Elaine Higgins from Costafields was tasked to provide an answer as to why this large mistake had occurred.
Historically FNTC allowed the Costafields proposal to acquire the inventory of the club for £250,000. That offer after they were seated as managers was withdrawn on 21st September, 2002.
This in short Saffin claims, is a breach of contract as they reneged on an offer which in any event “the club” accepted.
In the accounts provided, the maintenance fee owed to the club by the founder member were not recorded in the disillusionment of JDP Sales Ltd. The document filed with the Isle of Man Government did not declared any liability to “the club” and it appears that the debt was written off benefitting the “founder member”.
When the timeshare was originally purchased in 1986, part of the acquisition (which consumers bought into) was car parking spaces. These car parking spaces were also withdrawn from the club and the committee were told if the members wanted to use them they would have to get a loan to pay for them. The same applied to the use of the gymnasium. At the AGM in May 2002 Phillip Broomhead knew that “Sales Ltd” was being dissolved and also the tax allegations and implications, however he did not mention it to the owners during the 4 hour meeting although he continually referred to “Sales” Ltd throughout.
Therefore the advice given and the recommendations proffered were indeed flawed.
That said they did recommend Dread Vacations who promised to pay over to the club the sum of £250,000 to take a commercial interest in the club however again they did not pay the sums promised.
Many timeshare owners When Costafield took control became frightened and began to give up their timeshare ownership.
To add depth the club was a tiny part of the entire hotel complex. That complex would have had a manager and many employees to look after the entire resorts and no doubt Mr. Lacoume and his co owners will have had maintenance contracts in place. I have no record that he ever “spat out the dummy” as a director of the hotel and/or sacked his own company who performed the maintenance at his own hotel. But he did in respect to the timeshare resorts contained in the hotel complex.
Anyway that all history! The club needed a new manager, and rapid.
Going back to the tax fraud the Spanish authorities embargoed the assets which underpinned the timeshare resort. These assets were owned by Leeside Ltd (the panama Company). The directors were FNTC.
What flowed from the changes in 2002 is that Saffin was sacked and all the supports of the proposition to change the management and the Trust also floundered. There purported investment never materialised and many lost huge in insufferable amounts. The resort is still in existence and leaving fees selling timeshares and taking money of consumers.
Saffin and her army of consumer supporter were never sued so the issue raised in this report were never aired. Timeshare issue like these are rarely aired as if they were and if they were placed before the courts they industry would be closed
What does Saffin think of timeshare? It’s not hard to guess?
The sacking of an innocent and moral women and by the timeshare industry is not a nice story.
Assume for one moment that FNTC supported the consumers! Assume that they exposed the resort, investigated them and made allegiances with consumers! Would those resorts give the task to FNTC at the outset or would they appoint someone who will protect them?
Did FNTC do a good job? That depends which side you are on!
Today we have other events including secret meeting between TATOC and the RDO all suggesting they give a “dam” about consumer rights. We have FNTC attending Lakeview meeting and rendering their take of what is lawful and what is not and consumers return day after day to those very people for advice.
Industry Don’s via a cacophony of web sites, face-book pages and narcissistic web site exist for a purpose. They proffer illusion and falsehoods fables and reckless advice for a purpose and consumers have to ask themselves has that advice ever brought about a expected quite enjoyment, a favourable experience and/or a investment benefit.
Whilst consider you own answers you can also ask has the timeshare industry given you advice which has cause themselves a sufferance whilst you get a benefit? Have they become rich at your expense?
How many will be impaled onto the finical stake paying large debts, overdrafts and loans credit cards? How many will lose their homes assets and dignity before all the consumers are united?
When will the Citizens advice (CAB) wake up and stop referring consumer they purport to represent to the industry those very consumers have issues with?
So what are you going to do about it?
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk