I understand Government is attempting to justify its rape of the foremost institution creating real benefits for the 'most vulnerable', namely, the National Housing Trust, by relying on the provisions of the Public Bodies Management and Accountability Act (PBMAA).
Before looking at the detailed provisions, I ask readers to pause for a moment; step away from the trees and trees of obfuscation being peddled; and take a look at the forest which is the massive incongruity created by the use of a statute expressly passed as: "An act to make additional provisions for the management and accountability of public bodies and for connected purposes" to validate a breach of the sacred trust envisioned by the National Housing Trust Act (NHTA). Only politics could make such an oxymoron appear real.
Section 4 of the NHTA sets out the functions of the Trust as follows:
"(a) To add to and improve the existing supply of housing by -
(i) Promoting housing projects to such extent as may from time to time be approved by the minister;
(ii) Making available to such contributors as may be prescribed, in such manner and on such terms and conditions as may be prescribed, loans to assist in the purchase, building, maintenance, repair or improvement of houses;
(iii) Encouraging and stimulating improved methods of production of houses;
(b) To enhance the usefulness of the funds of the trust by promoting greater efficiency in the housing sector."
In the beginning, the trust had no function that didn't relate to the improvement of the existing housing stock or greater housing efficiency. In 2005, when a similarly disgusting rape of the organisation was contemplated, the act was amended to add the further function:
"(lA) In addition to the functions specified in subsection (i), the Trust may provide financing up to a maximum amount in the aggregate of $5 billion for projects for the development of education."
Outside of housing, its power is limited to an aggregate of $5 billion and only for education. It's immediately clear that the NHT has no authority whatsoever to transfer or use any of the Trust Funds for any other purpose, least of all "fiscal consolidation". In my opinion, any such use of a dollar of Trust funds is an egregious breach of Trust for which NHT contributors can hold the directors personally liable.
I'll go to the PBMAA in a short time, but the provisions of that and any other statute are completely irrelevant to the use of Trust funds by the members of the Trust. No other statute, except by express provision, can override the provisions of the NHTA. The PBMAA does not purport to do so. The purpose of the PBMAA is to ensure that public bodies, like the NHT, are held to account and TO MAKE CERTAIN THEY DON'T USE THEIR FUNDS FOR EXTRANEOUS PURPOSES.
A quick look at the title of the parts of that act makes this clear beyond peradventure. Part II is titled 'Corporate Governance and Accountability'. Part III's title is 'Duty of Care, Disclosure, etc, of Directors and Officers'. Parts I (Interpretation) and Part IV (General) do nothing to derogate from these pellucid purposes.
A quick run-through will establish that this statute had no intention of being used by finance ministers to dip into the surpluses or otherwise of public bodies. The PBMAA, as initially passed, mandated public bodies to file audited reports for tabling in Parliament (Section 3); restricted public bodies' ability to hold shares (s.4); restricted borrowing powers (s.5); forced public bodies to be efficient, goal oriented, etc (s.6); work to a pre-prepared corporate plan (s.7); and establish an internal audit committee (ss.8, 9).The financial secretary was empowered to create a code of conduct for auditors of public bodies (s.10) who may consult the auditor general (s.11). The minister may order a special audit (s.12) or himself prescribe the criteria for appointment of auditors (s.13) who have wide-ranging powers of enquiry and audit (s.14-16). Every director of a public body is mandated to act honestly (s.17), including avoidance of conflicts (ss. 17, 18), but he may rely on the statement of any independent professional without fear (s.19) and must follow finance ministry guidelines regarding emoluments (s.20).
General provisions in Part IV include biannual reports to go to the minister and court actions, where necessary.
Where in all that would one fit a ministerial right to demand a "contribution" to "fiscal consolidation" from any public body? It's nonsense.
NHT Chairman Easton Douglas is quoted as saying, "Under Section 4(5) of the PBMAA, and in accordance with the Public Bodies Financial Distribution Regulations 2012, the minister of finance has the power to legally require the NHT to make a financial contribution ... ." But Section 4(5), which was introduced by way of a 2011 Amendment Act, changed the marginal note to Section 4 from "acquisition of shares by public bodies", to "shareholdings and distributions", and provides as follows:
"(5) Nothwithstanding subsections (3) and (4), a public body may be requested by the financial secretary to pay a special distribution into the Consolidated Fund in accordance with regulations made under Section 24."
OVERRIDE NOT POSSIBLE
Now that it's clearly understood the PBMAA can't and doesn't attempt to override any provision of the NHTA (or any other statute), it's clear why this desperate attempt to legalise central government raids on the assets of public bodies was worded the way it is. Public bodies "may be requested" by the financial secretary to "pay a special distribution". Because every public body is different; operates under different statutory regimes; and has autonomy under individual statutes, such requests can't ever be compulsory.
Directors, not shareholders, run every company. A shareholder can't demand anything from directors more so when those directors are trustees of a sacred trust to use funds in their possession for the benefit of the most vulnerable among us.
Nothing in the PBMAA, as amended, alters the functions, powers or duties of the NHT board. If the requested "distribution" doesn't improve housing or education (to a maximum of $5 billion), it must be refused. If the request isn't made in furtherance of the PBMAA's purpose (to improve public bodies' accountability), the request itself would be illegal.
It matters not what the much-ballyhooed Public Bodies Financial Distribution Regulations 2012 says. Those regulations were passed pursuant to Section 24, which gives the minister power to make regulations generally, but these must be "for giving effect to the provisions and purposes of this act". Any regulation that goes beyond the purpose of the act, which is to hold public bodies accountable, would be ultra vires the act itself and void.
The NHT directors, trustees all, should be very careful how they genuflect at the altar of politics if it entails breaching their fiduciary duties to all NHT contributors by acceding to this illegal request. Don't be frightened or bullied by political leaders' shrill threats to the effect that, if we don't find it there, we'll have to find it somewhere else. Find what? For what purpose? To obey IMF dictates that external creditors must be paid in full at all cost, including forcing local bondholders to accept an extortionate JDX2 (imposed twice in three years) with no guarantee there won't be a third. Why doesn't the IMF suggest that external creditors take a 25 per cent haircut?
I beseech the trustees of the NHT to advise Government that if they MUST follow IMF dictates without question or pause, Government should find the funds somewhere else. If Government continues to insist, every single one should resign in protest.
It's important to note that, in coming to my opinion, I don't have any need to resort to esoteric constitutional arguments about confiscation of property or misdirection of NHT contributions (which are refundable in full and, accordingly, not taxes) into the Consolidated Fund, although these arguments are attractive.
But why go there when it's obvious, on the face of the relevant legislation, that any use of NHT trust funds other than for the purposes set out in the NHTA would be absolutely, incontrovertibly and egregiously unlawful?
But, let us suppose for a moment that, somehow, all logic and reason flee the land and Government is permitted, under the PBMAA, to demand a 'contribution' from 'surplus' towards 'fiscal consolidation'. The IMF dictate that four years' 'contribution' should be guaranteed as a prior action would still be illegal since only a swami with an efficient crystal ball could be certain that future surpluses would be available from which the alleged 'contribution' could be taken.
If the NHT trustees bow to these illegal demands, how do we force Government to use the funds responsibly? What is 'fiscal consolidation'? Can't the trustees, on behalf of 'most vulnerable', at least insist on being told the specific planned destination of these funds and ask for a right of audit to ensure that the funds do, indeed, go where they were promised?
AT ODDS WITH ATKINSON
In this regard, I find myself reluctantly and respectfully disagreeing with the learned attorney general, a man for whom I have the highest personal and professional respect.
All I can say about what I consider to be a hasty analysis by an otherwise brilliant lawyer is that, sometimes, the complexities of the civil law can catch out even the most outstanding of criminal-law practitioners, which is where I understand (perhaps incorrectly) the AG's main practice was focused.
It gives me no pleasure to conclude that he has erred and, frankly, I hope I'm proven wrong, but I doubt it.
This Government seems to have excelled at squeezing square pegs into round holes. Peter Phillips was sent to Finance while financiers Peter Bunting went to National Security and Mark Golding to Justice. Go figure. Now Patrick Atkinson, an exceptional mind and a perfect candidate for director of public prosecutions, finds himself in the attorney general's position.
I've said it before and I'll say it again: We need to find a better way to make public-service appointments. We don't have so many persons available in the small talent pool numbering less than three million, to be wasting genius like Patrick Atkinson where he seems most unsuited. Peace and love.
Robinson is an attorney-at-law. Email feedback to