The owners of the ACE building have been unable to secure an occupancy permit for a new two-storey extension they spent hundreds of thousands of dollars to build.

Following the Supreme Court's declaration of the development as illegal, Government is withholding an occupancy permit pending advice from the Attorney General, Planning Department director Mr. Brian Rowlinson confirmed yesterday.

"We are still seeking legal advice,'' he said.

He could not say whether Government would order Scarborough Property Holdings to tear down the extension.

Bermudiana Road resident Mr. David Barber and his lawyer Mr. Alan Dunch, having won their court case against the extension, have written Planning demanding that it be demolished.

"We warned Scarborough when we lodged the appeal that if they built (the two floors) then they did so at their own peril,'' Mr. Dunch said earlier this month after hearing the judgment.

Puisne Judge the Hon. Mr. Justice Meerabux ruled the Environment Minister the Hon. Gerald Simons "misdirected himself in law and misapplied the law'' last August when he overturned the Development Applications Board's decision to refuse the extension.

Scarborough boss Mr. John Patterson yesterday said the company had applied for occupancy permit for the building which was on the verge of completion. He had not heard back from Planning, he said.

But he saw no reason why the permit should not be issued.

"We built the building with a valid building permit and we still hold such a permit,'' he said.

Mr. Patterson has contended that award was against the Minister not Scarborough.

Scarborough is jointly owned by insurance companies ACE and BF&M.

Mr. Dunch has argued Scarborough had made itself party to the appeal by making submissions to the court, therefore, was liable to tear down the new floors.

Among his client Mr. Barber's objections to the development were it invaded his privacy -- overlooking his home "Jacaranda'', and it would generate traffic and noise.

The DAB had rejected Scarborough's application on the grounds it exceeded the maximum height permitted under the Bermuda Plan 1992, which was four stories.

The two-floor development boosted the rear part of ACE building to five storeys.

Government lawyer Mr. Philip Holder submitted Mr. Simons had "total discretion'' to determine planning disputes and the discretion "was not reviewable by the court except in so far as there was a point of law which the Minister had contravened''.