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Battle over NHT funds begins - Court case commences over PNP's decision to extract $46 billion

Published:Tuesday | June 21, 2016 | 12:00 AMLivern Barrett
The National Housing Trust

The Supreme Court is today expected to begin hearing a legal challenge to the decision of the Portia Simpson Miller administration four years ago to tap into the coffers of the National Housing Trust (NHT) for $45.6 billion in budgetary support.

Through an amendment to the NHT Act three years ago, the previous government got the green light to withdraw $11.4 billion from the Trust annually, starting in 2013 and ending this financial year.

However, self-employed St James businessman Fitzroy Fagan, through his attorneys, has asked the court to declare the National Housing Trust [Amendment] [Special Provisions] Act 2013 void.

Fagan, who claims in court documents that he has contributed to the NHT for 22 years without receiving a benefit, also wants the court to find that the multibillion-dollar withdrawal constitutes a 'deprivation' of his property that is in breach of the Constitution.

"The second defendant [NHT] is holding the contribution of the claimant and other contributors on trust. Those contributions represent the private property of the contributors. It is a breach of trust for the board of directors of the second defendant to hand over the funds on trust to the third defendant [the minister of finance]," Fagan claimed in court documents obtained by The Gleaner.

A victory for Fagan, one attorney-at-law told The Gleaner yesterday, could mean that the Government would have to reimburse the NHT the $45.6 billion. "They would have to pay back the money," the attorney suggested.

Simpson Miller and Dr Peter Phillips, the then finance minister, used a national broadcast in February 2013 to announce the Government's decision to tap into the NHT's coffers for budgetary support.

The Government, in taking the matter to Parliament for approval, said the draw-down on the NHT funds was necessary in order to allow the country to meet certain fiscal targets under the four-year extended fund facility with the International Monetary Fund (IMF).

The announcement drew public outcry from a wide cross section of the society, including the then Opposition Jamaica Labour Party, led by the current prime minister Andrew Holness, which described the Government's action as a raid of the NHT funds.

"We believe that matters as fundamental as these - that is the property rights of Jamaicans, the status of the NHT and the scope of the property rights under the Constitution - deserve ventilation before the courts," Holness said after the amendment to the NHT Act was passed in Parliament.

However, in announcing that the NHT would pay over the $45.6 billion to the Government, chairman of the NHT at the time, Easton Douglas, insisted that the Public Bodies Management and Accountability Act and the amendments enacted in 2011 give the finance minister the authority to seek from any public body an amount drawn from surpluses, deferred earnings or profits.

Fagan's attorneys are, however, contending that even with the amendments, the provisions of the Public Bodies Management and Accountability Act do not apply to the NHT Act.

"If the provisions of the Public Bodies Management and Accountability Act and the amendments thereunder were intended by the Parliament to apply to the statute creating the second defendant [NHT], those provisions would conflict with the provisions contained in Section 15 (1) (a) of the Charter of Rights and Fundamental Freedoms," the St James businessman argued.

The case is to be heard by the Full Court.