ATTORNEYS for the CLICO United Policyholders Group are contending that they have a continuing legitimate expectation that Government will pay them the full value due on their Executive Flexible Premium Annuities (EFPA).
Queen's Counsel Peter Knox told Justice Joan Charles in the Port of Spain High Court yesterday that the policyholders are seeking to enforce that legitimate expectation.
Knox submitted that no evidence has been presented to the court to prove that this government could not afford to keep the promise made by the previous administration, in 2009, that policyholders' investments in CLICO would be safe and, if there were any deficit in the company's statutory fund, that Government would make up the deficit.
"There is no evidence by (former finance minister Winston) Dookeran that the economy of the country was in a bad way (when the current government came into office in May 2010)," Knox said.
"The evidence indicates that the fiscal outcome for 2010/2011 was sufficiently better than projected. The fiscal position was good."
Dookeran announced a plan to repay policyholders their money without interest over a period of 20 years through a series of bonds.
Knox said Government did not communicate why they could not do better for the policyholders.
"They could have done better to ensure that the returns promised by the previous government would have been given to us."
Knox said the policyholders have acted reasonably in deciding to hold out for a better offer.
As part of their judicial review challenge, the policyholders are also seeking an interim court order that Government give details of the assets of CLICO which have been sold and how the proceeds of the sales were applied.
Knox contended yesterday that Government has acted irrationally by not providing them with the information requested.
Additionally, the lawsuit also seeks to compel Government to give details of the EFPA policyholders who have been paid in full since January 2009.
In response, attorney for the State Russell Martineau SC said the legal action had its genesis in the collapse of the insurance giant in 2009. He said it was an emergency situation which required then Finance Minister Karen Nunez-Tesheira and the then government to take immediate action.
"As time went on and as the government of the day sought to implement its promises, they realised there was a hole," Martineau said. "Not just a hole, but one which was deeper and darker.
In 2010, with the change of government, the new government had to take up the reins and deal with the situation. Government sought to construct a plan taking into consideration all the existing factors and the general interest of the public."
Martineau said it must be noted that the assets of the government are not the assets of CLICO and that Government's payout plan was devised to bring some measure of relief to the policyholders by using Government's money and not CLICO's.
The trial continues today.
Appearing with Knox are attorneys Ramesh Lawrence Maharaj SC, Vijaya Maharaj and Nyala Badal, while Persad-Bissessar and her Cabinet are also being represented by attorneys Allan Newman QC, Kelvin Ramkissoon and Kerry-Ann Oliverie.