system following a Supreme Court ruling.

The ruling ended a two year battle by the owners, Marcor Realty, who bought the hotel in 1991 from Grimstone Ltd.

Marcor claimed in court that Grimstone should pay for a land-based sewage system to replace the previous system that pumped sewage through a pipe into the ocean, beyond the reefs.

US-based Marcor said the company had not been told about the need for a sewage treatment plant before purchasing the hotel.

They claimed Grimstone told Marcor the hotel's method of disposal was acceptable by Government, when in fact they knew it was not.

The Health Department had, for some time prior to the sale, said they wanted a land-based system.

Grimstone claimed those plans were disclosed to Marcor before major renovation work began.

The Health Department is now insisting on the installation of a new sewage treatment plant which will prove costly. The defendants said they were entitled to recover the cost, estimated to be around one million dollars.

Puisne Judge the Hon. Richard Ground said that because the defendants had not yet built the plant, there was difficulty in establishing the extent of any loss.

The original case arose out of an alleged wrongful withdrawal of $749,578.39 by Marcor from a fund of $2 million held until all conditions were settled.

But Marcor made counterclaims stating there had been a breach of warranty and that Grimstone had failed to disclose details of an advertising campaign in the United States.

Mr. Justice Ground found against both counterclaims and dismissed them. He said: "The first mention of a land-based plant was made by the Health Department after the sale.

"They chose to raise it at that time because the buyer was planning to install one in any event as part of the plans for the renovation and extension of the hotel, and the substantial increase in the size of the hotel would necessitate one.''