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Wednesday, July 30, 2025

Judge knocks down Central Bank Act again

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20140114

For the sec­ond time in less than two months, a High Court judge has ruled that the Cen­tral Bank Amend­ment Act of 2011, which pro­tects the cash-strapped CL Fi­nan­cial and its sub­sidiaries from le­gal ac­tion, is un­con­sti­tu­tion­al and void.In a 62-page judg­ment de­liv­ered in the Port-of-Spain High Court yes­ter­day, Jus­tice Ricky Rahim ruled that the leg­is­la­tion, which was passed two years af­ter Gov­ern­ment's takeover of the trou­bled fi­nan­cial in­sti­tu­tion in 2009, breached the sep­a­ra­tion of pow­ers.

Rahim said the leg­is­la­tion was in breach of the fun­da­men­tal con­sti­tu­tion­al prin­ci­ple as it gives the Cen­tral Bank the ju­di­cial func­tion of stay­ing le­gal pro­ceed­ings, by pre­vent­ing claims be­ing filed against the com­pa­nies by its pol­i­cy­hold­ers and cred­i­tors, while the com­pa­nies re­main un­der the con­trol of the bank.

"The court has the pow­er and the du­ty to re­view the ac­tions of the leg­is­la­ture and ex­ec­u­tive to de­ter­mine whether they are in con­for­mi­ty with the Con­sti­tu­tion. In or­der to do so, the court must be able to ex­er­cise its pow­er free from in­flu­ence from the leg­is­la­ture and the ex­ec­u­tive," Rahim said.

The judg­ment stems from a case brought by two Cli­co in­sur­ance agents–My­ron Rud­der and Bar­bara Kan­hai–who were at­tempt­ing to re­coup the com­mis­sions and bonus­es owed to them by the com­pa­ny, which amount­ed to al­most $1.9 mil­lion.

On No­vem­ber 28, Rahim's col­league Jus­tice Ron­nie Boodoos­ingh de­liv­ered a sim­i­lar judg­ment in a law­suit brought against Cli­co by Stone Street Cap­i­tal, the pri­vate com­pa­ny of for­mer CL Fi­nan­cial ex­ec­u­tive An­dre Mon­teil.While, like Rahim, Boodoos­ingh ruled the leg­is­la­tion was un­con­sti­tu­tion­al, he went a step fur­ther to strike it out in its en­tire­ty, open­ing the door for lit­i­gants to file law­suits to re­cov­er monies lost as a re­sult of the col­lapse of the CL Fi­nan­cial con­glom­er­ate. Boodoos­ingh's judg­ment is be­ing ap­pealed.

In his judg­ment, Rahim said he dis­agreed with the scope of Boodoos­ingh's judg­ment and said his rul­ing on the un­con­sti­tu­tion­al­i­ty of the act would on­ly ap­ply to in­di­vid­u­als who filed law­suits be­fore the leg­is­la­tion was passed in Sep­tem­ber 2011.

"The court is there­fore of the view that once a claim has been in­sti­tut­ed, a stay on that claim or in re­spect of the ex­e­cu­tion of judg­ment of that claim can on­ly be grant­ed by the court and any at­tempt by the leg­is­la­ture to aver un­to it­self such pow­er breach­es the doc­trine of the sep­a­ra­tion of pow­ers," Rahim said.Be­cause Rud­der and Kan­hai filed their law­suits in 2012, Rahim ruled that they would not stand to ben­e­fit from his con­sti­tu­tion­al rul­ing.

In their law­suit, the agents both claimed that in ad­di­tion to breach­ing the sep­a­ra­tion of pow­ers, the amend­ment al­so blocked their rights to ac­cess to the court.In re­sponse, the State's le­gal team re­lied on an af­fi­davit from for­mer Fi­nance Min­is­ter Win­ston Dook­er­an, who said: "The amend­ment did not de­prive cit­i­zens of their rights to ac­cess the ju­di­cial process, but sim­ply sus­pend­ed it un­til the stay is lift­ed."

The lawyers claimed at the time the leg­is­la­tion was passed there was a re­al­is­tic dan­ger of the col­lapse of the en­tire fi­nan­cial sys­tem and the ob­jec­tive of the act was to "main­tain the in­tegri­ty and sta­bil­i­ty of the fi­nan­cial sys­tem of T&T and to pro­tect those whose in­ter­est are af­fect­ed by it."The agents al­so al­leged that the leg­is­la­tion con­tra­vened their con­sti­tu­tion­al rights to prop­er­ty, equal­i­ty be­fore the law, a fair hear­ing and pro­ce­dur­al pro­vi­sions. Rahim re­ject­ed these claims.


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