|Judge: Bank law unconstitutional |
By JADA LOUTOO Wednesday, January 15 2014
A SECOND High Court judge has ruled that the protection law for Central Bank, which was passed in 2011, was unconstitutional. However, Justice Ricky Rahim ruled the law was only unconstitutional as it relates to legal challenges filed before the law came into effect and not those filed after it was passed by Parliament on September 20, 2011.
As a result of Justice Rahimís ruling, two Clico insurance agents ó Myron Rudder and Barbara Kanhai ó had their constitutional motions dismissed on all but one argument and they were ordered to pay 80 percent of the Attorney Generalís costs.
Rudder and Kanhai sought to challenge the constitutionality of the Central Bank (amendment Act 2001), on the basis that it violated certain of their rights under sections 4 and 5 of the constitution and infringed the principle of the separation of powers.
The two claimed in their lawsuit that by virtue of the provisions of the Act, they were prevented from taking legal action and enforcing their rights against Clico. As such there was a breach to their rights to equality before the law, protection of the law and a right to a fair hearing and not to be deprived of such procedural provisions by the law.
Rudder in his claim said as a result of the financial collapse of Clico on January 30, 2009, the insurance giant failed to pay him commissions, managerís bonuses and managerís premium income benefits totalling $1.4 million.
Kanhai said Clico failed to pay her commissions and contributions due on a pension plan in the total sum of $414,431.94. The two filed their constitutional claim on December 18, 2012, more than a year after the protection law, preventing any legal action being taken against the Bank in respect to the collapse of Clico, came into effect.
The agentsí attorney Gregory Delzin argued that an employee was entitled to constitutional protection and a right to be paid for work performed under a contract of employment.
They said they could not be considered creditors as covered in the protection law.
Rahim in his ruling, said the insurance agents, being persons to whom a debt was owed by Clico, were creditors within the meaning of the Act. He said the stay imposed by the Act covered all creditors and as such employees did not fall into a special category entitling them to any different form of due process to that of all creditors who suffered similar circumstances following the collapse.
Rahim also said the stay imposed by the protection law did not take away the agentsí rights to seek relief from the courts only that it was a temporary one. He said they were still entitled to seek relief from the court in the future for breach of their rights if they could show that the stay had been imposed for longer than was reasonably necessary.
The judge said they could also seek redress if their concerns as to whether the assets of Clico would be transferred to the new company thereby rendering any judgment they may eventually obtain worthless.
He noted no mention was made by the Finance Minister who announced that the assets of Clico were to be transferred to the new company this month, but said even if the agentsí fears were realised then they may have a strong argument that the purpose of the transfer was to avoid or defeat any judgment obtained against Clico. He also said their right to a fair trial was not breached neither were their rights to protection of the law, equality before the law, rights to a fair hearing and not to be deprived of such procedural provisions by the law.
Rahimís limited ruling differed from that of Justice Ronnie Boodoosingh, who last year, ruled that the protection law was unconstitutional as he pronounced on a case filed by investment firm Stone Street Capital ruling that the firm could ventilate its claim in court as it seeks to recover over five million shares in Flavorite Foods Limited which Clico Investment Bank (CIB) held as a security for a loan.
Russell Martineau, SC and Roger Kawalsingh appeared for the Attorney General.