|Chairman’s Response to Snr Castro’s letter of 13th May 2021|
|Dear Club Members,|
You may be asking yourselves why Snr Castro is attempting to demonise me personally and also attempting to delegitimise the Club Committee. Why is he doing this by illegal means? I will, through this letter, explain why.
I will commence by explaining the breach of confidentiality and how the Club’s hands have been tied. At the commencement of the second arbitration I requested that the confidentiality clause should be lifted. This was opposed by WimPen and refused by the Arbitrator. Both parties were warned that breaching arbitration confidentiality could mean sanctions. Unfortunately I can only defend the Club against Snr Castro’s allegations by breaching confidentiality myself. I am taking a risk, but I believe that if I am brought to account by any court that they will understand that I was not left with any choice. However, I can only do this proportionately in order to deal with the points raised. The Committee and myself have always complied with the law.
There has been a second arbitration that was initiated by WimPen and WimPen Leisure Sales. The final stage of the arbitration is dated 30 April 2021. The arbitrator stated:
“I refuse (emphasis added) to confirm that the Part Award dated 11 March 2020 may be disclosed to the wider Club Membership or to any other party.”
There is also a paragraph in the Award document that states:
“I note that the Court took considerable pains in the Arbitration Appeal … to maintain the anonymity of the parties and confidentiality of the issues and in its interlocutor of … 2021 the Court refused the motion to allow disclosure of the Lord Ordinary dated … and the Part Award….”
Why did WimPen raise a second arbitration? The Club Committee had cancelled WimPen’s membership of the Club. The Committee was entitled to do this under Clause 11.5.4 of the Constitution. The reasons given were many, non-payment of maintenance fees, making threats to members, preventing members from having access to their apartments, non-compliance with orders from the first arbitration (refusal to hand over the Register of Members, funds and financial records etc).
Why did the second Arbitrator uphold WimPen’s appeal? The reason given was that there had not been a legitimate Committee meeting to make the decision to cancel WimPen’s Membership. The Arbitrator came to the conclusion (wrongly I believe) that the Committee was not properly constituted because Mr Pengelly had not been invited. It is absolutely true that Mr Pengelly had not been invited. At this point I have to refer to the findings of the first arbitration, and I quote:
Para 102, “The Respondents (WimPen) also objected to the jurisdiction of the tribunal on the basis that there was no specific meeting to authorise the commencement of the arbitration. I return to the conflict of interest issue. The logic of the Respondent’s (WimPen) position is that the Company (WimPen) appointed Committee Members are entitled to be involved, on the side of the Committee, in proceedings against the Company. Whilst I have found that Mr Pengelly is a member of the Committee, he cannot seriously expect to be involved in proceedings against the Respondents (WimPen), and, for example be privy to the legal advice that they are receiving. It seems to me that this is simply another example of how the Constitution struggles to deal with the reality of how the Resort has been run.” Further to this, Mr Pengelly wrote to me as Chairman stating that he would not attend any Committee Meeting if Carol Parkinson was in attendance.
Para 105, “Ultimately, power lies with the members of the Club at the AGM, and it is clear to me from the minutes of the 2016 AGM that members were well aware of the Committee’s actions in respect of arbitration and approve of them. In these circumstances it would be quite wrong to prevent the Club, acting through its Committee, to pursue the arbitration against the Company (WimPen).”
Para 106 “….I have found that the Committee is properly constituted and is carrying out the will of the Club members expressed through its general meeting.”
I can now turn to the matter where Snr Castro is saying that all meetings, Committee or General Meetings since April 2017 have been ruled null and void (This is to say that they, in effect, have never taken place). Unfortunately, due to the second arbitrator this is true. This means that changes to the constitution and elections have not taken place since 2017 and therefore the changes will have to be revisited at some point. This decision also means that the Committee membership remains as it was in 2016. The Constitution reverts back to 2014.
Committee members are:
Elected by the members,
Albert Fletcher as Chairman
The Company-nominated member was Mr Pengelly who is now deceased.
The Company (WimPen) has since nominated Snr Castro and Mrs Martin to the Committee. I will say more about this later.
Cost of legal proceedings.
There is no doubt that legal proceedings are expensive. I make no apology for taking or defending legal matters on behalf of the Club. I thank all of you who have made donations and loans to the legal fund. The Constitution, at Clause 11.5.8 relating to the Powers of the Committee, states:
“To bring, defend, agree to be joined, settle or compromise any proceedings or claims of any kind in relation to the affairs of the Club……”
After the first arbitration it was obvious to everyone involved that the arbitration process was very long and expensive. Simply dealing with matters in court would be quicker and less expensive. It was for this reason that the Committee proposed to change the Constitution deleting the Arbitration clause. However, as you can see from my comments earlier, the arbitration clause still remains.
WimPen, under instructions from Snr Castro, initiated a second arbitration. The Club had no choice but to defend itself as the Arbitrator made it clear that she would proceed without us if necessary. WimPen started the second arbitration for two reasons. The first was to reinstate their Club membership and the second, most importantly, to try and financially break the Committee so that it could no longer have legal representation. Snr Castro succeeded in the first but failed in the second. Through the good offices of Paul Motion, the Club’s solicitor at BTO in Edinburgh we were offered, and accepted the support of 3 QCs without having to make any payment. They were retained on a speculative basis. That meant that the club did not have to find the money to pay them but they would be paid from costs if they were awarded. Unfortunately they remain unpaid. This destroys the allegation by Snr Castro that the Committee has spent over £1m in legal fees. Snr Castro is of course basing his costings on what he has spent. Snr Castro has purchased one of the highest paid QCs in Scotland. This is the same QC that represented Scotland in the Supreme Court when the Government was taken to court over Brexit and won. I have said this many times but it is worth repeating. Why has Onagrup spent 5 years and over £1m trying to gain ownership of Los Claveles? Especially when he admits that WimPen does not have a contract to act on behalf of the Club.
At this point let me apologise for such a long communication but you will appreciate the importance of me dealing with the ramblings contained within Mr Castro’s letter.
I have dealt with the SGM request initiated by Snr Castro in my previous communication but as it has been raised again I am forced to repeat myself.
I have serious concerns about 7 companies that were previously unknown suddenly stating that they have over 1200 Club Los Claveles weeks – these companies appearing to have given the use of all these weeks to WimPen as proxies, and also being the mainstay of the percentage required to call an SGM. It is also a concern that I know that a large proportion, if not all, are weeks that belong to the Club and should be under the control of the Committee – these weeks being handed back or cancelled over may years. As an aside these weeks would have been rented by the Club and a substantial income obtained. That income is now going elsewhere. The Constitution at Clause 15.2 states that the new member (transferred week) shall be ratified at a General Meeting. This has not been done in respect of the 1200 weeks and therefore they are not eligible to be calculated in any vote or request for an SGM (Trustees are oblivious to this).
To put this matter beyond doubt please see the following email from Ivan Pengelly:
On 3 Feb 2015, at 16:15, Ivan Pengelly – Wimpen Leisure Management <firstname.lastname@example.org> wrote:
Your note of 31st January refers:
I am not sure what you mean by no actions are taken until after our meeting.
I do understand your concern that ONAGRUP may wish to have a larger ownership to use the votes in their favour at an AGM.
It is important for you to understand that my agreement to remain in WimPen was to ensure a smooth transition to ONAGRUP. All the cancelled weeks belong to the Club represented by the committee and any planned bulk purchase of weeks would have to be agreed by the Club. Blocked weeks cannot be purchased as they remain in the name of the purchaser in the Land Registry.
I would have hoped that given the large number of years that I have served Los Claveles owners, that my integrity would not be in doubt and I can assure you that as long as I remain with WimPen, I would not take part in any activity that was not in the best interests of the owners.
Snr Castro states at item 6 in his letter, and it is worth repeating, “The arbitrator does not declare that the transfers of weeks from April 2015 onwards made by WimPen are unlawful or void.”
What the Arbitrator actually says and I quote:
Para 22.1.13 “I do not find the allocation and transfer of Membership certificates by the Claimants (WimPen) since 1 August 2015 in respect of “Cancelled Weeks” have been lawful and valid.”
Mr Castro, in his letter states that FNTC, Trustee, has certified the people who have asked for an SGM are legal owners. There are several issues here. Firstly, FNTC only have the information that has been supplied to them by WimPen. FNTC admitted to me that their records were not up to date and that they had requested further information from WimPen. FNTC subsequently received a copy of the Register of Members from WimPen. FNTC have no knowledge regarding the “Ratification” of members. (Worth noting that WimPen can supply FNTC with the Register but not the Committee)
It also has to be acknowledged that FNTC are not independent and the Club AGM voted to dismiss them as Trustee in 2012. Mr Castro and Onagrup have assisted FNTC in remaining as Trustee by continuing to pay them out of Club funds. FNTC’s Chief Executive and Legal Director are Directors in companies controlled by Onagrup. More on FNTC later.
I would be very happy to call a General Meeting of the Club, covid compliant, when I can be confident that only bona fide members are invited. This will require Snr Castro to provide me with the Register of Members, financial records of the transfer of weeks and all banking records and accounts. If there is nothing to hide then why is this being denied? If I call a meeting without inviting everyone I will be leaving the Club open to another expensive arbitration. I am not prepared to do this.
The first arbitration award. Orders are important in respect of calling meetings and finance. I quote the relevant paragraphs:
Para 146 “…The Confirmatory Agreement was a fixed term, three-year appointment from 3 May 2014. It expired on 3 May 2017. I understand that the First Respondent (WimPen) have been reappointed by the Escritura Community and DOA. They have not been appointed by the Club.”
Para 147 “In terms of the Constitution the affairs of the Club are to be managed by the Committee unless delegated to the Management Company. The First Respondents (WimPen) are no longer the Administrator or Management Company of the Club. The Second Respondents (Time Ownership Los Claveles) have never been the Management Company of the Club, so far as I can see and if they were, they were replaced by the First Respondent (WimPen) as Mr Pengelly made clear in his evidence. Whilst the Second Respondent (Time Ownership Los Claveles) remains as Founder Member in terms of the Constitution, it is clear that it is no longer the “Management Company”. Accordingly, neither Respondent has any current entitlement to Club assets. In these circumstances it is appropriate that the First Respondent (WimPen) returns the Club assets to the Club Committee. I will grant the Order sought.”
The Arbitrator’s Orders are as follows:
“I grant declarator that the 2016 AGM was properly convened and that all business transacted at that meeting, including the election of Ann Burston and Roger Lindsay onto the Committee, was valid…” This includes the appointment of Hiro Bulchand as Administrator who is authorised to collect Management fees on behalf of the Committee and to use Club Los Claveles Limited as the vehicle to do this.
“I order the Respondents (WimPen) to make over the control of all property belonging to Club Los Claveles, which is in their possession or control, to the Chairman of the Claimant (Albert Fletcher), including, without prejudice to the foregoing generality, the Register of Members referred to in clause 11.6 of the Constitution of the Club with 28 days this award (Award dated 1st August 2017).”
“I order the Respondents (WimPen) to make over to the Claimants all books of accounts kept by them in respect of Club Los Claveles in terms of Clause 17.1 of the Constitution of the Club, within 28 days of the award (1st August 2017)”
“I order the Respondents (WimPen) to produce a reconciliation of the bank account of Comunidad Propietarios Los Claveles, showing what sums properly belong to the Club and to make over such sums to the Claimants (The Club), all within 28 days of this award.”
“I order that all legal fees and expenses reasonably incurred by the Claimants (Club Committee) collectively or by individual Committee Members in default of reimbursement by WimPen, in relation to this Dispute be met from the funds of the Club Los Claveles, in terms of Clause 12.1.10 and 12.2 of the Constitution of the Club.”
As many of you are following this dispute you will be aware that Snr Castro and WimPen have not complied with any orders. This has forced the Committee to engage in litigation in Spain. Snr Castro states that I, Albert Fletcher, Chairman “have given out information declaring that Wimpen is obliged to hand over the Club to the Current Committee.” This statement speaks volumes. It gives the impression that Mr Castro and WimPen are the legal owners of the Club. I can confirm that Mr Castro stated, in his evidence in the first arbitration, that he had purchased the Club from Mr Pengelly. In relation to Snr Castro’s allegation I simply say, go to the Club website and see the Spanish Court documents that have been translated and published.
The way forward. Is there light at the end of the Tunnel?
The short answer is yes but only if members are prepared stay the course.
We did have a set-back with the second arbitration. Reverting back to the 2014 Constitution does make things more difficult. We will need to address this at a further legally convened General Meeting. The second arbitration did produce some very poor decisions forcing us to appeal. We lost the appeal on legal grounds. There was no rehearing of the evidence. The Judge made it clear that the rules states that the arbitrator can be wrong but this in itself is not sufficient reason to overturn the judgement. I cannot begin to explain this. My intention is to ask Paul Motion, BTO Solicitors, Club’s lawyer, to write to you directly on this matter.
As a further result of the second arbitration the Committee has reverted back to what it was in 2016. This is not a problem as we are all loyal to the Club. It does mean that Snr Castro and Mrs Martin have to be invited to attend, which they have done on three occasions in the past 2 months (by Zoom Video Conference). I preside over the meetings as Chairman and I have a casting vote. The elected Committee Members can and will ensure that the wishes of the legal membership are carried out. Snr Castro and Mrs Martin do not believe in confidentiality and refuse to declare an interest when discussing legal matters involving WimPen. The WimPen nominees refuse to accept the democratic decisions of the Committee and the wider club membership.
The legal challenges in Spain are to continue and the case in Scotland to force FNTC to hand over to a new trustee, Hutchinson, will also continue. It would not be prudent to give details of the cases but I can say that it includes further enforcement of decisions already made by the first arbitration.
As a reminder:
The Resort, if sold, could realise in excess of £40m. Only existing members would receive a share. The document filed with the Land Register makes it clear that the Club owns the land.
The Resort as a hotel could be extremely profitable.
What members can do to help bring this dispute to a speedy end:
Simply stop paying WimPen. This undermines the work that is being done. Ona WimPen are for profit. You may lose your holiday on the Resort for a year due to WimPen illegally refusing access but compensation can be claimed later. This is a short-term loss for a long-term gain.
Under no circumstances hand back your weeks to WimPen. This gives WimPen greater opportunity to say they own the Resort. In reality, anyone handing back to WimPen is still the legal owner, and liable for future fees, as WimPen are acting illegally by saying they are acting for the Club.
My open questions for Snr Castro:
i. Why do you refuse to comply with the orders made at the first arbitration when the arbitration was final and binding on all participants?
ii. Why do you refuse to comply with the wishes of members stated at the 2016 AGM and before?
iii. If you wish to avoid allegations of fraud, theft and corruption why do you continue to refuse to hand back the Register of Members and details of the financial transaction regarding transfer of weeks?
iv. Why do you continue to refuse the Club access to all financial records which would allow a proper forensic examination?
v. Why do you continue to persuade RCI to block members from using the RCI exchange system?
vi. Why do you continue to refuse to answer my letters in respect of the Club paying the Common Areas Service Charge?
There are more questions but I will leave it there.
Snr Castro continues to threaten. He has said in the past month that he is not afraid to take legal action against Committee Members personally and that Committee Members should be afraid. This was followed by Committee Members receiving intimidating letters from solicitors acting for Snr Castro. This of course follows Committee decisions where the vote went against him and Mrs Martin.
Snr Castro has attempted to demonise Carol Parkinson, who was, until the outcome of the second arbitration, the Club President. Carol can continue to attend Committee meetings along with Ray Steele. This is because their appointments as Advisors to the Committee were supported by the General meeting in 2016. As well, the team of hard-working volunteers remains intact.
As a point of clarification:
Snr Castro and Mrs Martin are not Founder Members. Founder Members are companies and NOT individuals. Founder Members have no entitlement to attend Committee Meetings.
Snr Castro and Mrs Martin have been appointed as Committee Members under the 2014 Constitution Clause 11.1 They are appointed by the “Company”, WimPen. They have no special powers.
WimPen is not the Management Company and has no authority, under the Constitution, to invoice or collect maintenance fees for Club apartments.
The Committee, under the Constitution is required to ensure that maintenance fees are paid. The Committee is empowered to decide how this is done.
Snr Castro and Mrs Martin not only refuse to comply with decisions reached at Committee Meetings (of which they are part) they also continue to refuse to comply with both arbitrations.
From a personal point of view, it has been a long battle. Financially, I have paid the Club my maintenance fees for my 5 weeks. I have not paid WimPen. I have holidayed elsewhere. I have nothing to gain by continuing this fight on behalf of members. I am a man of my word. I stated at a General Meeting that I would act for members until the fight was won or until members decided I was not required. My Wife and I love Los Claveles. I know you all share that view. I am aware that timeshare has had its day but that is not sufficient reason to be bullied out of the Resort by an organisation who’s primary intention is to make a massive profit and does not care how it achieves it. In order to continue I have to have your support. As always this is your decision and your right. In the meantime, myself and my hard-working colleagues refuse to be intimidated.
Please stay safe and have the vaccination.
Chairman, Club Los Claveles