How Minister Duncan’s Hypnotic Hotel set its claws in the Seaman’s Club brothel- Court clobbers Hypnotic

POSTED: 03/15/13 12:16 PM

The Hypnotic files part 3: The court case

When Richbenzwan N.V. signed a 10-year management contract with Hypnotic Hotel and Entertainment back in 2009 for the management of the Seaman’s Club brothel in Sucker Garden it soon found itself in one conflict after the other. Two court cases later Hypnotic is sitting pretty and Richbenzwan has been pushed with its back against the wall – and the fingerprints of Justice Minister Roland Duncan are all over these events.

Today reconstructed the history of this ugly dispute based on court documents this newspaper obtained. The Richardson family – owners of Richbenzwan – declined to be interviewed for these stories citing personal safety and security concerns but they gave permission to use the court documents.

Court Clobbers Hypnotic

St. Maarten / By Hilbert Haar – November 13 of last year was supposed to be D-Day for Richbenzwan. On that particular Tuesday Judge Coen Luijks would pronounce his verdict in the legal battle between Richbenzwan and Justice Minister Roland Duncan’s Hypnotic Hotel and Entertainment NV. Little did Richbenzwan know that there were darker days lurking in the near future.

But on November 13, the sun was definitely shining because Richbenzwan thought that justice had finally been served.

In the regular court procedure, Richbenzwan had put six demands on the table. The first demand was for the payment of $18,000 plus interest for the never paid month of November 2010. The second demand was for the payment of $65,000 for the five months from June until October 2012 – also with interest. The third demand was to sentence Hypnotic to pay its monthly $18,000-fee before the fifth day of each month. This demand came with an additional condition: “Until the agreement has been legally terminated.”

Number four: pay the permit fees to the Island Receiver – an amount of 11,656.66 Antillean guilders. Under five, Richbenzwan asked the court to force Hypnotic to abide by an article in the management contract that obliges the company to sign a standard bank order according to which the monthly management fee is transferred via standard banking order to a designated account.

Justice Minister Roland Duncan 20120222The last demand is in a way linked to the third one: Richbenzwan asked the court to void a statement by James Martin Carti that he wanted to terminate the management contract per January 1, 2013. Richbenzwan demanded compliance with the requested court order on the forfeiture of a daily $1,000 penalty that Hypnotic abides by the contract.

If the court granted all demands, Richbenzwan would – in November 2012 – obtain a court order with a value of close to $90,000 plus an unspecified amount in interest.

Hypnotic on the other hand desired to terminate the contract with Richbenzwan per January 1 of this year.

With regards to this part of the dispute the court ruled that parties had signed an agreement for a limited period of time, namely ten years. “It is not allowed to terminate such a contract. If one of the parties terminates it, the terminating party becomes liable towards the other party,” Judge Luijks ruled. “A possible termination by Hypnotic per January 1, 2013 would make Hypnotic liable towards Richbenzwan for a significant amount of money.”

With regards to the defense of Hypnotic that it did not owe any money over the month of November 2010 the court noted that Hypnotic’s defense claim boiled down to the argument that who remains silent agrees and that this is not a rule of law in St. Maarten – a position Hypnotic had taken in the plea it presented in the procedure.

The court rejected the arguments Hypnotic had also fielded in summary proceedings: the company complained that it was unable to find sufficient girls for the club, because the Execution Decree Labor Foreigners only allows hiring girls of at least 25 years of age. That argument did not fly because this legislation went into effect on January 12, 2009, and that is before Hypnotic signed the management contract. Nevertheless, starting in June of last year, Hypnotic unilaterally decided to lower the management fee payments from $18,000 to $5,000 per month.

The court did not approve: it ruled that the article applies to a situation whereby through neglect by the government no residence or work permits are issued for a period of more than three months. And that situation did not occur, the court ruled.

Hypnotic’s call on the spirit of this article also failed: “It does not mean that Hypnotic only has to pay $5,000 per month in case it is disappointed in its expectations, or that Hypnotic could get away completely from the contract.”

To cut a long story short: the court sentenced Hypnotic to pay the $65,000 Richbenzwan demanded, augmented by legal interest.

To make matters worse for Hypnotic, the court furthermore ruled that it is legally bound by the management contract until October 31, 2020. Judge Luijks stated that Richbenzwan is free to demand the monthly payments as long as the contract has not ended. “Terminating the contract during its term results in liability towards Richbenzwan.”

The court also ruled that Hypnotic is obliged to keep executing the management tasks it agreed to when it signed the contract.

There is an undated letter from James Carti, who is charged with the day to day management of the Seaman’s Club indicating that Hypnotic wishes to get away from its obligations per January 1, 2013. The court was not amused at all: it slammed Hypnotic with a penalty of $2,500 per day with a maximum of $500,000 in case it fails to execute the contract.

Judge Luijks also obliged Hypnotic to sign a standard order by the bank for the transfer of the monthly management fee – and to make sure this happens he attached a penalty of $2,500 per day with a maximum of $500,000 for non-compliance to this part of his ruling.

Another interesting part of the court ruling concerns the permit fees Hypnotic has to pay on behalf of Richbenzwan to the Receiver.

This newspaper obtained a copy of a payment arrangement Hypnotic succeeded (without any knowledge or involvement from Richbenzwan) to conclude on behalf of Richbenzwan. It is dated August 14, 2012, and it is not in the name of Hypnotic Hotel and Entertainment, but in the name of Richbenzwan. The document is signed by collection officer Claudia Leito on behalf of the Receiver, and by someone whose scribbled name looks like Isidora (supposedly) on behalf of Richbenzwan.

Whoever this person is, the signature is a forgery in the sense that this is not someone who was authorized to sign anything on behalf of Richbenzwan. Based on the court ruling and this document one may get the impression that Minister Duncan’s Hypnotic was without the knowledge or involvement of Richbenzwan – successful in concluding a payment arrangement with the receiver in the name of Richbenzwan – a feat few people will be able to pull off.

The outstanding amount for the “hotel permit” was substantial on August 14 of last year. By the time of the court ruling two installments had been paid.

All in all, this seemed a rather pleasant conclusion to a lengthy court battle – at least for Richbenzwan. But it would take only a couple of weeks for events to take a really ugly turn, as we will describe in part 4 of this series on Monday.


On Monday: The Hypnotic files part 4

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