Attorney General Appellant v Martinus Francois Respondent [ECSC]

• Jurisdiction: St Lucia
• Judge: REDHEAD, J.A. [AG.],SAUNDERS, J.A.,RAWLINS, J.A. [AG.],Albert Redhead,Justice of Appeal [Ag.],Adrian Saunders,Justice of Appeal
• Judgment Date: 29 March 2004
• Judgment citation (vLex): [2004] ECSC J0329-2
• Court: Court of Appeal (Saint Lucia)
• Docket Number: CIVIL APPEAL NO. 37 OF 2003
• Date: 29 March 2004

[2004] ECSC J0329-2

IN THE COURT OF APPEAL

Before:

The Hon. Mr. Albert Redhead Justice Of Appeal [Ag.]

The Hon. Mr. Adrian Saunders Justice Of Appeal

The Hon. Mr. Hugh Rawlins Justice Of Appeal [Ag.]

CIVIL APPEAL NO. 37 OF 2003

Between:

The Attorney General

Appellant

and

Martinus Francois

Respondent

Appearances:

Mr. Anthony Astaphan, SC for the Appellant with him Miss Jan Drysdale and Mr. Williams

Mr. Martinus Francois, with him Mr. Clarence Rambally and Dr. William Frederick for the Respondent

Mr. Anthony Mc Namara, Q.C. and Mr. Stephen Singh watching brief for the Bank

REDHEAD, J.A. [AG.]

1 On 19 ^th December 1992 Dr. the Honourable Kenny Anthony, Prime Minister of Saint Lucia and Minister of Finance entered into an agreement on behalf of the Government with Rochamel Development Company Ltd. (the Developer).

2 Clause 1 of the agreement states:

"UNDERTAKINGS OF THE DEVELOPER

[10] The Developer agrees to:

[G] Provide all necessary funding for and to carry out the construction of a first class three hundred (300) room hotel resort hereinafter called the "Hotel Resort" on 15 acres of land … and to furnish layout and fully equip the Hotel Resort as a first class hotel resort within two years from the 1 ^st January, 1998."

3 Clause 2.02 of the Agreement provides:

"UNDERTAKINGS OF THE GOVERNMENT

The Developer has obtained funding for the construction of the hotel resort from the Royal Merchant Bank of Trinidad & Tobago and Caribbean Banking Corporation Ltd. of Saint Lucia. A requirement of this funding is that Government enter into a guarantee and indemnity Agreement with the Royal Merchant Bank of Trinidad & Tobago and the Government agreed to do so on the following terms and conditions.

(A) Debt Service Guarantee

The Debt Service Guarantee by the Government is to be capped at a maximum liability of US $4 million.

• [i] The Debt Service Guarantee will provide a maximum contingent liability over a three (3) year period of initial hotel trading after which period the liability ceases.

• [ii] In the event that Government should be called upon to honour the Guarantee at any time, then the Government would be issued redeemable preference shares in the Hotel Company to the appropriate value, by way of security ……"

4 On 17 ^th December, 2002 the Prime Minister and Minister of Finance presented a resolution to the House of Assembly for approval in the following terms: WHEREAS it is provided by Section 39[1] of the Finance (Administration) Act 1997 No. 3 that the Minister for Finance may by Resolution of Parliament borrow from any bank or other financial institution for capital or recurrent expenditure of Government.

AND WHEREAS the Minister for Finance considers it necessary to enter into a fully under-written Fix Rate Bond facility of US $41,000,000.00 or its equivalent in Eastern Caribbean dollars at an issue price of 100% per value with the RBTT Merchant Bank Ltd for the purpose of financing Government's Capital works programme and for refinancing Government's obligations in respect of the former Hyatt Hotel; …

Be it resolved that Parliament hereby authorizes the Minister for Finance to enter into a Fixed Rate Bond facility of US $41,000,000.00 with the RBTT Merchant Bank Ltd. for the purpose of financing Government's Capital Works Programme and for refinancing Government's obligations in respect of the former Hyatt Hotel."

5 This resolution was unanimously approved by the Parliament of Saint Lucia.

6 Mr. Martinus Francois, the Respondent, is an Attorney-at-Law in Saint Lucia. The learned trial Judge encapsulated his action before the High Court in the following terms:

"[He] Seeks the assistance of the court in his capacity as a citizen, a tax payer and an elector. He brought this consolidated claim against the Attorney General alleging that there was a procedural irregularity in the Parliament of Saint Lucia authorizing the Minister of Finance to enter into a Fixed Rate Bond facility with Royal Bank of Trinidad & Tobago Merchant Bank Ltd (RBTT) for the purposes of refinancing Government's obligation in respect of the former Hyatt Hotel. He also alleges that statutory instrument No. 4 of 2003 dated 6 ^th January, 2003 which purported to be made under the authority of Section 39 of the Finance (Administration) Act No. 3 of 1997 (the Act) is illegal, void and of no legal effect. He therefore seeks relief in accordance with Section 105(1) of the Saint Lucia Constitution Order 1978 as well as a declaration under Part 56 of CPR 2000."

7 The learned trial Judge in granting the relief to the Respondent found that the Minister of Finance had no power under Section 39 of the Finance (Administration) Act 1997 to borrow in order to refinance the Government's obligations in respect of the former Hyatt Hotel. She also held that the Minister of Finance acted ultra vires the Act in even seeking a resolution of Parliament to borrow moneys from the consolidated fund to refinance such a project, and that Parliament acted ultra vires the Act to authorize such borrowing when it passed the resolution contained in Statutory Instrument No. 4 of 2003.

8 The learned trial Judge said at paragraph 62 of the judgment:

"As far as I am concerned both the actions of the Minister of Finance and Parliament in respect of refinancing the Government's obligations in respect of Hyatt Hotel are ultra vires the Act. Therefore, Parliament did not have the requisite power to authorize such borrowing under section 39."

9 The learned trial Judge said that "the withdrawal of any moneys from the Consolidated Fund to meet Government's obligations in respect of the former Hyatt Hotel would have or has breached section 78 of the Constitution."

10 I make this observation. With the greatest of respect to the learned trial Judge, I do not understand what is meant by "Parliament acted ultra vires the Act to authorize such borrowing when it passed the resolution contained in Statutory Instrument No. 4 of 2003."

11 As I understand it, if Parliament enacts legislation which does not conform with previous legislation then the latter legislation repeals the former. One does not speak in terms of the latter legislation being ultra vires a subsequent legislation.

12 Unfortunately I am of the view that that confusion was implanted in the learned trial Judge's mind when she erroneously opined at paragraph 63 of her judgment "that in matters of delegated legislation such as statutory instruments, Parliament is not Supreme …"

13 The logical conclusion of this, in my view, is that once Parliament has passed delegated legislation Parliament cannot repeal it or at least cannot do so unless by a special procedure.

14 The only authority which is higher than Parliament in our system is the constitution and even that Parliament can change provided that it follows, particularly in entrenched provisions, certain procedures.

15 The Appellant is dissatisfied with the learned trial Judge's ruling and has appealed to this court.

16 In his Notice of Appeal the Appellant filed 23 grounds of appeal. In my opinion it is not convenient or necessary to refer to all of the grounds of appeal for a resolution of this appeal.

17 Ground 4.11 to my mind encompasses the appeal in its entirety:

"4.11 the learned trial Judge erred in law and/or misdirected herself when she held that the Minister of Finance acted "ultra vires" in even seeking a resolution from Parliament and further that the Parliament acting (sic) "ultra vires" in approving that resolution/, presumably on the erroneous basis that the said resolution did not concern or relate to the Government's Capital or recurrent expenditure and which in any event was not pleaded by the Respondent."

18 The case for the Respondent at trial and that which he tried to maintain on appeal is that there is a condition precedent as contained in Section 4 of the Finance (Administration) Act. This according to him, mandates the Minister of Finance before he enters into any binding contract to first obtain the approval of the Parliament of Saint Lucia.

19 Unfortunately in my view the learned trial Judge accepted this argument without a critical analysis of the important issue e.g. what was the purpose of the guarantee e.g. was it for recurrent expenditure? Instead she classified it as a "battle of the guarantees" when she said: The Defendant argued that the issue of "guarantee" and whether or not "the guarantee" was approved by Parliament are wholly irrelevant to the case as this is a classic case of a political storm in a small judicial teacup. Rather I see the case as a battle of guarantees"

20 It appears from the judgment of the learned trial Judge that she partially accepted the legality of the guarantee when she said:

"It is clear from an analysis of these judicial authorities that the guarantees which were executed by the Minister of Finance on behalf of the Government are binding on the state. However I agree with Mr. Astaphan that the issue as to whether the guarantees are binding on the Government does not arise in the present case. But I do not agree with his reasons … As I see it this is now a moot point."

21 I have some difficulty in appreciating that the guarantee could be binding on the Government and not on the state. I do not understand why the issue is a moot point. Is it the issue of the guarantee? Or is the issue of the Government being bound by the guarantee a moot point? If it is the former, it cannot be a moot point because it is the focal point of the dispute.

22 The learned trial Judge in accepting the submission of learned Counsel Mr. Francois that statutory instrument No. 4 of 2003 was ultra vires Section 39 (1) of the Finance Act, said:

"I agree entirely with the submissions advanced by Mr. Francois on this aspect of the case and I find that the Minister of Finance acted ultra vires the Act even in seeking...