Pursuing a case which the High Court has ruled Attorney General Anil Nandlall SC had no standing being a part of in the first place, the State has now incurred an additional $2.5 million dollar in costs on top of the initial $4 million; having lost on a second round of litigation.
The Court also emphasised that the AG had misapplied established legal principles and was therefore misguided in his bid to substantiate the right he argued he had, to have brought the action.
It described Nandlall’s attempts at involving the State, as being a “meddler” in a matter that was purely contractual and had nothing to do with the government; and his appeal as having no merit.
The case surrounds the appeal which Nandlall had filed to a previous ruling dismissing the action he had brought against former Finance Minister Winston Jordan and BK Marine Inc., over the controversial sale of prime riverfront property.
The properties at the centre of the proceedings are those located at Mud lots 1 and 2, Lot F of Mud lot 3 and Lots A, B and D, North Cummingsburg, Georgetown. Nandlall had wanted the Court to declare an agreement of sale between BK Marine and the National Industrial and Commercial Invest-ments Limited (NICIL) to be illegal.
The AG sought to have the Court declare that BK Marine had been “unjustly enriched” in the sum of approximately $5 billion, which he contended was the true value of the property in question, and wanted an order for restitution to the state of the property and for BK Marine to deliver up possession of it.
Affirming the previous ruling of Justice Brassington Reynolds who threw out the case, the Full Court in a recent ruling declared that the Attorney General had no standing to sue on behalf of the State regarding property no longer owned by it, but rather a company.
In February of 2021, Nandlall had initiated proceedings against Jordan, BK Marine, Colvin Heath-London, in his capacity as former Chief Executive Officer (ag) of NICIL, and NICIL itself.
It was Nandlall’s contention that binding case law had established that the Attorney General always has standing to bring an action in misfeasance to recover financial loss suffered by the State as a consequence of wrongdoing in public office.
Presiding in the appeal before the Full Court, Justices Jo-Ann Barlow and Sandil Kissoon noted that the case of Florencio Marin v. The Attorney General of Belize on which Nandlall sought to rely can be distinguished from the case he brought; and therefore, could not support his contention.
The Full Court pointed out that in the Marin case, the properties were owned by the State; a factor which it said was not present in Nandlall’s challenge.
Nandlall had urged the Court to find that the Attorney General’s constitutional and other legal mandate to dispense with matters for and on behalf of the State include property vested in a company.
The Court said, however, that to find such a power residing in the Attorney General is to stretch to limits that it cannot countenance, the principles enunciated in Marin’s case and the long-established concept of a company having a separate legal persona from its owners.
“This Court found that Marin’s case can be distinguished from Nandlall’s case under consideration and therefore did not apply it,” the Full Court justices asserted.
The Caribbean Court of Justice (CCJ) they noted, ruled in the Marin case, that the Attorney General of Belize was entitled to sue the former Ministers of Belize to preserve the patrimony of Belize and recover compensation for loss sustained as a consequence of the alleged misfeasance in public office by those former Ministers.
Against this background, Justices Barlow and Kissoon said that taking into consideration those principles laid down by the apex court, no lower court would without more, rule that an Attorney General does not have that power.
It was at this point they cautioned, however, that decided cases and the reasons for those decisions must always be read in light of relevant circumstances and the facts in the particular case that was decided.
Underscoring Nandlall’s wholesale reliance on the Marin case, the judges in noting the differences between the two matters reasoned that Nandlall could not be guided by the reasons and decision in Marin.
They said that stripped of much of what Nandlall’s case contains, the bottom line was whether the Attorney General has any standing to sue on behalf of the State in relation to property no longer owned by the State but owned by a company.
“The answer to this question must be no,” they asserted.
Recalling the evidence, the Court underscored it having been agreed by all the parties that the lands in question were vested in NICIL by virtue of the Minister’s powers under the Public Corporations Act.
The Court went on to say that it found that a vesting order under the Act passes title to the property in question to the Public Corporation, and that title cannot therefore reside in two parties.
On this point the judges found that by virtue of the vesting orders of 2003 and 2005, NICIL, and not the State became the owner of the properties in question. Those vesting orders they then went on to say are therefore to be treated as Transports of the properties which formerly belonged to the State.
“It follows therefore that NICIL had indefeasible title to the properties that formerly belonged to the State. Having indefeasible title to the properties in question gave NICIL lawful authority to treat with those properties as it saw fit,” the Court declared.
As a limited liability company incorporated under the provisions of the Companies Act, the Court said that such an entity is recognised in law as possessing a persona separate from its shareholders, officers and incorporators.
Clothed with the rights and obligations, a company it noted, may own property and through its authorised officers, the company may dispose of that property.
The Court said that Nandlall’s very case highlighted the fact that NICIL in 2006, 2011 and 2017 did treat with the properties in question as its own; and that when Winston Brassington, its former head, entered into the 20-year lease agreement, he did so on behalf of the company NICIL and not on behalf of the State.
Further when he proposed the sale of the said properties for the price stated in the Lease Agreement, he did so on behalf of the company NICIL. The Court said that similarly, when Colvin Heath-London entered into negotiations and ultimately sold the properties, he did so on behalf of the company NICIL.
The judges said that the Minister, by virtue of the provisions of the Public Corporations Act plays a major role in the establishment and selection of officers of the company; and he may, by virtue of his position in relation to the company, bring to that body the views of government and its plans and policies in relation to certain matters.
The company, it then went on to add, if it adopts those plans and policies and pursues them, “adopts and pursues them not as the government but as the company clothed with all the rights, obligations and status afforded it by law.”
“It cannot be that a shareholder, even if that shareholder is the sole shareholder of the company can, after the company has acted, seek to overturn actions of the company because that shareholder is displeased with the action of the company.”
The judges went on to state further, “a Court cannot look beyond the age-old principles governing the separate legal personality of a company unless circumstances present themselves that warrant the piercing of the corporate veil.”
They then made it clear that that no circumstance existed in the action filed by Nandlall to warrant piercing that veil
In their analysis of the issues, the judges said that the transaction between NICIL as vendor and BK Marine Inc as purchaser was contractual in nature. In relation to the sum for which the properties were sold, they noted Nandlall’s case indicated there were conditions to be satisfied by BK Marine Inc. the lessee before the Option to Purchase Price could be relied on.
His case the Court also pointed out, indicated that if the conditions were not satisfied the option to the purchase price stated in the Lease Agreement would become null and void but that the parties would be free to arrive at a price on which they had mutually agreed.
This the Court said, meant that the option to purchase was still possible, but at a price mutually agreed on by the parties.
“It is therefore a contractual issue between the vendor and the purchaser, the parties being NICIL and BK Marine Inc. as to what that price would be. There was no stipulation in the Lease Agreement of what that price would be or how it would be arrive at. As stated in the Statement of Case, the parties were free to arrive at a mutually agreed purchase price. No person, not to that contract, can legally challenge the mutually agreed price,” the Court said.
It then went on to add that further matters concerning outstanding sums owed on the transaction between NICIL and BK Marine Inc are matters for NICIL as the vendor to pursue.
“If the State seeks to insert itself into that contractual arrangement through the intervention of the Attorney General, the State becomes a meddler in a matter that is purely of a contractual nature,” the Court declared.
In dismissing the Attorney General’s appeal, the Full Court has ordered that the State pay costs to BK in the sum of $2.5 million no later than October 24th.
Jordan was represented by Senior Counsel Roysdale Forde.
Background
Among other things, Nandlall had argued in his appeal that Justice Reynolds had erred when he found there was no breach of a fiduciary duty by Jordan but failed to take evidence before arriving at that conclusion and also ignored the CCJ ruling in Marin v on the issue of the fiduciary duty.
He further said the Judge ignored the binding case law which established that the Attorney General always has standing to bring an action in misfeasance to recover financial loss suffered by the State as a consequence of wrongdoing in public office.
Following his ruling, Justice Reynolds had imposed costs against the Attorney General in the sum of $2,000,000 each for Jordan and BK Marine.
Under the former APNU+AFC government, NICIL had defended the deal, saying that the Water Street property sold to BK days before the March 2, 2020 general election had been won through a bid by the company over a decade ago but was subsequently tied up in a court battle.
