NHT defends secrecy around settlement over fizzled $2.5b contract with Dexim Holdings
Published:Wednesday | January 31, 2024 | 12:25 AMJovan Johnson/Senior Staff Reporter -
The National Housing Trust (NHT) says a secrecy clause in a settlement with a private developer was to comply with court rules on mediation, although a senior official claims the entity is “trying to mislead the public”.
“Discussions at mediation are confidential, yes. But, it is up to the parties to decide whether the product of a successful mediation, which is the agreement, is going to be kept private and confidential,” argued the official, who is not being named because they were not authorised to speak on the matter.
“If NHT was sincerely relying on confidential cover, it could easily have said so when questions came in about two weeks ago. It did not. Why not? The NHT should make it clear who proposed the NDA (non-disclosure agreement). But everybody has to try to save their skin now because of this exposure.”
The NHT, a state residential home builder, has been facing criticisms since The Sunday Gleaner revealed that it signed an NDA, blocking it from telling its contributors about the settlement with Dexim Holdings Limited.
The NHT sued Dexim in September 2022 for alleged failure to deliver 200 houses despite advancing $650 million under a two-year guaranteed purchase agreement signed in August 2019. The deadline was later extended to August 2022.
NHT and Dexim advised the Supreme Court on January 9 that they had reached a settlement.
Gleaner questions submitted for details of the settlement on January 10 remain unanswered.
Amid mounting pressure, the NHT yesterday acknowledged that the public "has a fundamental right to information about the use of public resources" but added that "confidentiality is consistent with the process of mediation and is a requirement of the rules of court".
"The rules of court require that what takes place at mediation and documents prepared for or in the course of mediation are kept confidential, and not disclosed in any other context except as allowed by those same rules. The non-disclosure and confidentiality provision in the settlement agreement is consistent with those requirements from the rules of court," said the Trust, which is funded by a mandatory contribution from the income of employers and workers.
It added: "This does not mean that the terms of the settlement agreement would be, or were intended to be, unavailable for viewing by contributors or members of the public. After the settlement agreement was signed by the parties, the agreement was annexed to the consent order."
It said orders of the court can be accessed at the Supreme Court.
According to the Civil Procedure Rules of the Supreme Court, mediation is a "confidential process" and "discussions during the mediation and documents prepared solely for the purposes of the mediation are confidential and may not be disclosed in any other proceedings or context".
But the rules also suggest that parties will decide whether an agreement that emerges from a mediation should be kept confidential.
"Where an agreement is reached between the parties, the signed written agreement shall accompany the report or be filed at the registry not later than 30 days after the completion of the mediation, unless it is a term of the agreement that it remains confidential," notes rule 74.11 (2) in reference to reports to be submitted by the mediator.
The Gleaner has asked the NHT to confirm which party proposed the secrecy clause.
Questions may also linger for the NHT as the NDA appears to cover more than just the discussions or disclosures at the mediation.
"The parties agree to maintain in confidence the contents, terms, conditions, and the consideration for this settlement agreement," states the six-page document dated November 29, 2023, and obtained by The Gleaner.
It continues: “Each party agrees to take every reasonable precaution to prevent disclosure to third parties and each agrees that there will be no publicity, directly or indirectly, concerning this settlement agreement, the discussions of the parties at mediation, or the matters in relation to the claim or the GPP (guaranteed purchase programme)."
The NHT reports directly to Prime Minister Andrew Holness and the signing of an NDA resurrects discussion around his warning against their use by public entities five years ago.
The statement sought to make it clear that Holness was not involved in the approval of the Dexim deal in 2019.
"Prior to January 2023, approval for participation in the GPP was undertaken using the NHT’s established internal approval processes. Neither the portfolio ministry, nor the portfolio minister, would have been directly or indirectly a part of the approval process," the Trust said.
That clarification may be soothing to government insiders who are bothered by concerns about the NHT's dealings with a company led by businessman George Neil.
In 2016, the Office of the Contractor General told the Holness administration not to give a $2.7-billion telecoms licence to Symbiote Investments Limited (Caricel), a company linked to Neil, because of “adverse traces” against him.
The administration went ahead but was forced shortly after to revoke the licence.
Meanwhile, the NHT said the $650 million it advanced to Dexim is "secure and are being recovered".
"Importantly, the NHT will not lose any funds," it added.
On Monday, the NHT initiated talks with Dexim with a view to get the NDA dropped from the settlement agreement.
That followed the appearance of the NHT's managing director, Martin Miller, before the Cabinet earlier in the day.
In the settlement agreement the parties agreed to surrender the 2019 deal, meaning the NHT would no longer buy Dexim's houses. It was signed by Miller and senior general manager Donald Moore for the Trust and Neil and consultant Ronald Robinson for Dexim.
In return, the NHT would reclaim the $650 million that was secured by a bond with a local bank.
The NHT had committed to buying 200 houses at $12.5 million per unit in Dexim Holdings' Out of the Blue development in Discovery Bay, St Ann, under the $2.5-billion contract.
Dexim, which defaulted on payments to investors in the project in 2022, disputed the NHT's allegations of contract breaches and insisted that its operations were significantly impacted by the COVID-19 pandemic and the resulting high costs of goods and services.
Opposition Leader Mark Golding has labelled the situation a 'scandal', while Opposition Spokesman on Finance Julian Robinson has called for the Integrity Commission to probe the NHT's relationship with Dexim and other private developers.