Former NHT board breached fiduciary duty, attorney argues
The attorney for a St James businessman has charged that the former National Housing Trust (NHT) board chaired by Easton Douglas breached its fiduciary responsibility to contributors when it agreed to pay over $45.6 billion to the Government for budgetary support.
Hugh Wildman has also contended that the move by the Portia Simpson Miller admini-stration four years ago to amend the NHT Act to give approval to the multibillion-dollar withdrawal deprived contributors of their "private property" without any mechanism for prompt and adequate compensation.
"The funds that have been taken by the Government clearly qualify as property under the Constitution of Jamaica, which cannot be taken without prompt or adequate compensation," he argued.
Wildman made the assertions yesterday as the Constitutional Review Court began hearing a claim filed by Fitzroy Fagan, a St James businessman and NHT contributor.
Fagan is challenging the move by the Simpson Miller administration to amend the NHT Act in 2013 to give approval to the withdrawal of $11.4 billion from the agency annually for four years, starting in 2013.
Amid public outcry from a wide cross-section of the society, the Government indicated at the time that the funds were needed to enable the country to meet certain fiscal targets under the external fund facility with the International Monetary Fund.
The final payment of $11.4 billion is due this financial year. However, the three High Court judges hearing the case have signalled that they are prepared to make binding orders to have the transactions reversed if they find that the Government's actions were unconstitutional.
Wildman argued that funds held by the NHT on behalf of contributors were considered private property covered by the Charter of Fundamental Rights.
"A simple amendment to the National Housing Trust Act with the enactment of the National Housing Trust [Amendment] [Special Provisions] Act 2013 runs afoul of the Charter of Fundamental Rights and Freedom and is, therefore, void," he argued.
Wildman also took issue with the Easton Douglas-led board, charging that by agreeing to turn over the funds to the Government for budgetary support, the directors "clearly went beyond the scope of the Trust and breached their fiduciary responsibility to its contributors".
He said the intent of lawmakers when they created the NHT was to isolate it from the political executive.
"The [original NHT] Act does not provide for the Government or any other body to commandeer the resources of the Trust and use those resources for government purposes, irrespective of how laudable and well-intentioned those purposes may be," Wildman said.
However, in her response, Monique Harrison, who is representing the Attorney General's Department, said the NHT Act did not create a trust scheme.
"There was no intention to create a trust," she insisted.
Harrison also argued that there was "no withdrawal of funds" from the NHT through the amended legislation. "It's a contribution which the NHT has a discretionary power to make," she argued.
Harrison will continue her submissions today.