Appalling CCJ judgment

Vishnu Bisram, Contributor

I write to bring to the public's attention a recent Caribbean Court of Justice (CCJ) judgment dismissing an appeal from parties in Guyana. It is the case of GFM Ltd vs Ramcharran and NBIC (now Republic Bank). The judgment was prepared by Justice Desiree Bernard (a Guyanese) and signed by herself and four other judges of the court.

Many lawyers I spoke with feel it is a perverse judgment that violates the rights of property owners. The lawyers, some internationally acclaimed legal luminaries (SCs and QCs), feel it is a most grievous injustice against a litigant by the CCJ. They believe that there should be an urgent review of the decision, as well as an inquiry into the integrity of decisions rendered by the court.

The lawyers with whom I spoke say the ruling confirms people's belief that a poor quality of justice is being administered by the CCJ, calling into question whether it can be an apt replacement for the Privy Council, to which most of the region still subscribe. A commission of inquiry is needed to examine decisions of the CCJ since it came into operation in 2005 in order to apprise the public of the quality of its justice.

The GFM Ltd case raised serious issues in the law relating to receivership (bankruptcy) and involved the interpretation of provisions of the Companies Act common to Guyana and the Caribbean. Many lawyers feel that the judgment will gravely affect property and commercial interests between debtor and creditor.

The appellant, a furniture manufacturer, issued two debentures, one to the NBIC in 1998 and the other to the IIC in 1993. By an agreement between the debenture holders, the two were ranked equally - both secured creditors of GFM and one was not entitled to be paid before the other. The NBIC appointed Mr Ramcharran, an attorney-at-law, as receiver of the company's property. Ramcharran claimed that he was not aware of the existence of the IIC debenture and as a result did not pay any monies to the IIC for more than a year. The IIC was forced to eventually appoint its own receiver, who subsequently was paid by Ramcharran.

The matter really centred on the conduct of the receiver, against whom a claim was made, that he took as commission more money than he was entitled to by the terms of the debenture under which he was appointed receiver. The question was whether a bank could unilaterally increase the receiver's commission without the consent of the company and without authority in the debenture itself to enable the unilateral increase.

MUCH-DELAYED JUDGMENT

The CCJ sat in Barbados on April 17, 2012 to hear the appeal sent up from the Guyana Court of Appeal. One can watch the entire proceedings on the Internet. The record is in two volumes and about 150 authorities were cited to the court. Judgment was reserved and not delivered until some three and half months later, comprising just 10 pages. This contrasts with two other decisions written by other judges - one on a Bajan case (32 pages) and another on a Belizean case (40 pages), which were delivered in a shorter duration span than the Guyana matter.

Justice Bernard's judgment upheld a ruling by the acting chief justice, Ian Chang, that NBIC and the receiver can alter commission fixed under the debenture without the manufacturer's endorsement. The manufacturer was responsible for payment of the commission. No clear or compelling reasons were given or authorities cited or precedent stated to support the ruling, as would be the norm in appellate rulings.

The receiver was appointed under Clause 8 of the debenture, which allowed for one per cent commission agreed by NBIC and the receiver. The commission was unilaterally raised to three per cent without GFM's knowledge. Questions concerning the interpretation of provisions of the Companies Act were raised in the hearing.

Another issue raised was whether two receivers could operate as joint receivers, for which there was no authority. Another issue was whether one receiver had any authority to pay commission to another receiver. The NBIC receiver was also accused of misconduct in office and in failing to carry out his duties such as paying rates and taxes.

Justice Bernard pens that: "Nothing in this debenture, under which Mr Ramcharran was appointed, required him to have regard to other debentures ... . He owed a duty to act only on behalf of the debenture holder who appointed him."

Lawyers tell me that the judgment ignores Section 273 of the Guyana Companies Act, which says that a receiver exercises his powers subject to the rights of secured creditors. The ruling is appalling, as it completely ignores Section 273 of the act when in the hearing there was specific reference to it.

The judgment also makes no reference to allegations of misconduct against the receiver. The judgment makes reference to the power of the court over the commission of a receiver, but the court was never asked to alter the commission. The question turned only on the commission payable to the receiver under the debenture.

Any layman can see that this is not a logical decision. In light of the clear statutory provisions, people are asking what could have prompted the judges to render this judgment - to say a receiver can ignore the right of a secured creditor? Is someone being protected? Is the court granting favours? Is the court neutral and objective in rendering judgments? Can the region trust the CCJ to dispense fair justice?

This ruling does severe damage to commercial interests, as it ignores basic learning in commercial law and prompts legal scholars to ask: Is the CCJ equipped to decide complex commercial disputes?

A court that produces a judgment which ignores basic principles of equity and clear provisions of statute law can be no substitute for the Privy Council, and something needs to be done before other countries access the court.

There are other matters arising in the court about which complaints are being made. I believe a commission of internationally acclaimed legal scholars (comprising some regional scholars) should be appointed by CARICOM to examine the judgments of the CCJ to determine its readiness as our own final court.

This recent judgment, in particular, ought to be examined by internationally acclaimed scholars in this field. Many lawyers I spoke with believe the Guyana matter, involving the decision written by Justice Bernard and endorsed by the four other judges, should be reopened and the pronouncements re-examined by other judges.

The entire written judgment and a video recording of the arguments can be found online at www.caribbeancourtofjustice.org.

Vishnu Bisram is director of NACTA Polls and an educator in New York. Email feedback to columns@gleanerjm.com and Vishnupar@aol.com.