A claim by the State Assets Recovery Agency (SARA) against the Guyana Bank for Trade and Industry (GBTI) for the payment of $224 million related to a 2015 agreement for the sale of land was struck out on a technicality.
The decision was handed down by Justice Franklyn Holder on Friday.
Stabroek News attempted to contact SARA for a comment on this development, but calls to the Director’s office were not answered.
The claim, commenced August 22nd, 2019, stemmed from the purchase of Lot 109 Young Street, Kingston, which now houses the bank’s corporate office.
SARA contended that GBTI acquired the land for $201,000,000, which sum was accepted by the then President Finance Minis-ter, though the estimated value of the land as at June $425,000,000. 3rd, 2005. In the circumstances, SARA argued that the public tendering process conducted by the National Industrial and Commercial Investments Limited (NICIL) was contrary to the Public Corporations Act and therefore unlawful.
SARA also contended that the acceptance of GBTI’s bid, then the fifth highest bid, was contrary to a 1993 privatisation policy, and that GBTI, having been in business for years, is presumed to have been aware of the estimated value of the land, was aware of previous allegations of unlawful conduct in tender awards, and therefore benefited from illegality.
Counsel for GBTI, on September 13th, 2019, had applied for SARA’s claim to be dismissed on the ground that the claim did not disclose a reasonable cause of action.
More specifically, GBTI argued, and the court agreed, that SARA was not a body corporate and could not bring proceedings in its own name.
Counsel for GBTI submitted that section 3(1) of the Act sets out the entity’s name as the State Assets Recovery Agency, while section 3 (2) of the Act provides that the person holding the post of Director shall be a corporation sole. The effect of section 3 (2), in law, is that an action can only be brought in the name of the Director.
For this reason, the action brought by SARA was so done improperly, and any possibilities of having SARA’s name substituted for the proper party, the Director, was rendered impossible as counsel for GBTI was able to successful argue that Dr Clive Thomas, SARA’s current purported Director, serves in this position through a process contrary to the provisions of the Act.
It was pointed out that Thomas was made head of SARA’s predecessor, the State Assets Recovery Unit (SARU), a department of Government.
Significantly, although section 106 (1) of the SARA Act allows persons employed by SARU to become employees of SARA after the commencement of the SARA Act, section 106 (2), a transitional provision, specifically requires, the fresh appointment of Director within a given time. The section states that “within a period of not more than four months from the date of commencement of this Act, the Parliamentary Committee on appointments on the notification by the Minister shall recommend to the National Assembly a person to be appointed as Director of the SARA.”
Counsel for GBTI pointed out that Thomas was not appointed Director of SARA within the four months stipulated by the Act, so that any appointment outside that period was contrary to the requirements of the Act, and therefore void.
Consequently, not only was the action by SARA brought by an entity without capacity to do so, and thus improperly brought for that reason, but there was no option to substitute the named claimant, SARA, with the Director, since, legally, the contravention of section 106 (2) means that there is currently no such officer functioning at SARA.
