AG: Way clear for Hart trial
Judge rules in favour of State
Attorney General Anand Ramlogan yesterday hailed the “historic landmark ruling” by the High Court which he said would pave the way for former State executives like Calder Hart, Leelanda Rampaul, Ken Julien, Malcolm Jones and others to face trial for actions and decisions taken while serving on State boards.
Ramlogan said the judgment removed a main defence offered by all the former directors who served under the PNM administration and who had been sued following the forensic probes conducted under this People’s Partnership administration.
Ramlogan said: “The four-year limitation period would not operate to bar claims when it can be showed that the alleged wrongdoers were themselves in control of the State company that suffered the loss.”
He said the PNM was in power for eight years and if the four-year limitation period had been upheld by the court, it would have meant that no trial could have taken place.
“This judgment would revolutionise corporate governance, especially in the public sector, as board members would be alive to the possibility of a legal suit, even after they demit office, when wrongdoing is uncovered,” the Attorney General said.
He added that the judgment had immediate consequences for the slew of civil lawsuits which including one brought against Hart who was sued for $500 million, Krishna Bahadoorsingh and Rampaul; the $1.2 billion lawsuit against former president of Petrotrin, Malcolm Jones for the GTL project; $30 million lawsuit against former eTecK directors for the failed Bamboo Network Limited investment and $12 million lawsuit against former UTT chairman, Ken Julien for the Aripo Guest House (which was leased for use by Juliana Pena). All these persons would have to be cross-examined, Ramlogan stated.
The judgment was delivered by Justice Devindra Rampersad in the case between eTecK and eight directors, including former chairman Ken Julien, Brian Copeland, Wendy Fitzwilliam and others.
The defendants, who argued through their attorneys, who included Douglas Mendes SC and John Jeremie SC, leading Stuart Young and Michael Quamina, as well as Kerwyn Garcia and Steven Singh, contended that the matter was statute-barred.
They also stated that it would be grossly unfair to interpret Section 14 (2) of Limitations of Certain Actions Act, in such a way as to subject directors who had acted with transparency to legal proceedings some ten years after a decision was made, when they were in no way responsible either for the fact that their directorships were not determined earlier, or for the fact that their breach of duty was not discovered and acted on earlier.
These attorneys further contended that were the court to adopt such an interpretation, there would be a great disincentive for anyone to put themselves forward for public service on the board of a State enterprise, particularly in the politically charged climate which is so endemic in Trinidad and Tobago. “They would fear that they may be exposed to legal action many years later, once the government changes, for any decision that went wrong, even though they kept their relevant principals fully informed of their decision making process,” they stated.
However Justice Devindra Rampersad stated that this was not the appropriate test. “The suggestion of the possibility of there being a disincentive ought not to arise. Any job carries the potential of legal proceedings if there is a failure to act properly. The burden lies on the claimant (the state company) however to show that such a breach did occur and that it was deliberate. If the breach is proven after a full trial, then there is no justification in trying to introduce a public policy element, as seems to be the purpose behind the submission, to insulate wrongdoers. Especially in the case of State companies where public funds are at stake....If the court were to accept this submission, then the court would be creating a public policy of immunity from scrutiny which could not have been the intention of Parliament, especially in relation to State funds,” Rampersad stated.
Ramlogan said the judgment should not act as a deterrent to legitimate and transparent corporate governance,”but rather deter those with ulterior motives from serving on State boards. It is therefore equally a wake-up call to present board members that they must adopt international best practice and act in the public interest.”