Mon | Dec 5, 2016

'Out-a-many' voices, one reigns: The National Housing Trust Act

Published:Sunday | November 16, 2014 | 12:00 AM
Easton Douglas - File

Shena Stubbs-Gibson, Contributor

The National Housing Trust's (NHT) alleged purchase of the Outameni attraction in Trelawny has kept tongues wagging in Jamaica and elsewhere for the past two weeks with violent opposition to the acquisition coming from many quarters.

The gist of the opposition seems to be rooted in the view that the NHT, in seeking to purchase the Outameni attraction, is acting outside of its legal scope. I deliberately kept the preceding sentence in present continuous tense, given the recent clarification by Prime Minister Portia Simpson Miller, and others, that the Outameni attraction, in terms of the brand, the experience and the intellectual property, had not been purchased, as only land had been purchased.

Given the aim of this column, to enhance the quality of public discourse by shedding light on the legal framework underpinning topical issues, I thought it would be useful to share what the National Housing Trust Act, the Holy Grail for the NHT, has to say on the various points of contention.

Functions of the Trust

Many have questioned the legitimacy of the acquisition on the basis that it does not conform to the rasion d'ĂȘtre of the Trust. In postings on the social-media site Facebook, Sarah Manley, daughter of late Prime Minister Michael Manley, the architect of NHT, is reported to have referred to the Trust as existing for "one sole purpose", that of improving the existing supply of housing.

According to a Gleaner report, she claimed that this is a mandate that could not be diversified. She is reported to have opined that any suggestion that the acquisition of a failing theme park was a legal use of the funds of the Trust was sophistry.

There are, in fact, three purposes or functions of the Trust which are set out at section 4 (1) of the act:

  • To add to and improve the existing supply of housing;
  • To promote the usefulness of the Trust by creating greater efficiency in the housing section, and;
  • The third function, which is a recent addition, permits the Trust to provide financing up to a maximum amount of $11.4 billion for fiscal consolidation in respect of the financial years falling between 2014-2017 inclusive.

She may have got the number wrong, but upon reviewing the wording of Section 4 of the NHT Act, it is hard to disagree with Ms Manley's conclusion that the acquisition proposed in and of itself could not legally be deemed to be consistent with the purposes/functions of the Trust. The matter does not end there, however.

Powers of the Trust

While there are only two core functions (the third one being time sensitive), Section 4(2) of the act lists seven powers which may be exercised by the Trust to give effect to its functions/purposes/raison d'ĂȘtre listed in Section 4(1). The powers are fairly wide-sweeping and include, in summary, the powers to:

  • Provide financing for suitable development projects and for social services and physical infrastructure required for communities developed under the before-mentioned projects.
  • Administer and invest the moneys of the Trust [my emphasis added];
  • Enter into loan agreements with borrowers;
  • Receive and administer funds entrusted to the Trust in accordance with the provisions of the act [my emphasis added];
  • Do such other things as may be advantageous, necessary or expedient for or in connection with the proper performance of its functions under this act [my emphasis added].

While this piece is not so much to opine as to inform, I will be bold to posit that while the acquisition of the Outmaneni attraction (as distinct from the purchase of the land only for the building of houses) would, in my view and clearly that of Ms Manley, not be consistent with the functions/purposes of the Trust, on the other hand, it would be wholly consistent with the "powers" of the Trust as it seeks to achieve its purposes/functions.

The powers of the Trust are the "means" while the functions/purposes, are the "end". The acquisition of the attraction could, therefore, be argued to be a form of investment to earn funds to achieve the wider purposes of the Trust.

This interpretation of Section 4 (2) is reinforced by Section 7 (1) (c) of the act which recognises monies earned from investment as being a legitimate resource of the Trust. In the circumstances, it is my view that the debate needs to be more focused on whether the powers of the Trust should be so wide and not on whether the acquisition falls within the functions purview.

Did the NHT board act ultra vires its mandate?

Section 5(1) of the act vests the board of the Trust with responsibility for the policy and general administration of the affairs of the NHT, subject to the provisions of the act. Given the wording of the powers of the Trust, the board does have the scope to accommodate the acquisition of the attraction within its elastic boundaries.

The decision of the Easton Douglas-led board in this regard, would in my opinion, by extension, be intra and not ultra vires. There have been comments in some quarters that the decision should have been approved by the cabinet, however, the Act does not provide for this.

In the
circumstances, a more useful point of discussion would be whether the
act should be amended to make it necessary for the board of the Trust to
seek prior Cabinet approval of certain decisions, if indeed the
electorate would not want to see a repeat of such a use of the powers of
the Trust, as demonstrated in the proposed Outameni
acquisition.

Is it the prime minister's duty to give
policy directions to the board

Finally, Andrew
Holness, leader of the Opposition, is quoted as saying, in response to a
statement from the prime minister, that it is the her duty to give
policy direction to the NHT. Is this consistent with the
act?

As stated before, Section 5(1) of the act
mandates the board of the Trust to see to policy and the general
administration of the Trust. Further, the wording of the section appears
to very purposefully restrict the power of the responsible minister (in
this case, the prime minister) to give policy directions to the board.
Readers should find the actual wording of the section
useful:

"The minister may, after consultation
with the chairman, give to the board such direction of a general
character as to the policy to be followed by the board in the
performance of its functions as appear to the minister to be necessary,
and the board shall give effect
thereto."

While the section does say that
the board "shall" ultimately give effect to a policy directive of the
responsible minister, such directive must be of a "general" and not
"specific nature", focused more on "purpose" than "power", and even
then, can only come after consultation with the chairman of the
board.

Further, the section does not mandate the
minister, but simply states that the minister
"may".

I, therefore, differ with Holness'
interpretation of the minister's "duty" in relation to the board of NHT.
The prime minister has no "duty" to direct the board on
policy.

Shena Stubbs-Gibson is an attorney-at-Law and
legal commentator. Send feedback to: Email:
shena.stubbs@gleanerjm.comTwitter:
@shenastubbs.