The Milshirv judgment
By Reginald Dumas
(Pt. 1 )
Headlined “Victory for the THA in Milshirv Complex case”, an item in the Express of May 1 reported on a High Court ruling the previous day in the so-called “Milshirv matter”. You may recall that this involved the proposed construction by a company named Milshirv of a building in Tobago for use by the THA.
The report quoted the THA Secretary of Finance, Joel Jack, as saying that his Division welcomed the court’s decision as confirmation of the THA’s position that it was legally entitled to enter into a BOLT arrangement with Milshirv. (BOLT=Build-Own/Operate-Lease-Transfer.) “(The THA had previously) sought (legal advice),” he continued, “to ensure that, as (was) its custom, (it) was operating according to law.” Let’s examine the nature of the “victory” and of the THA’s proclaimed adherence to the law.
With the prior consent of the two parties, the Attorney-General and the THA, the Judge had two issues before him for interpretation/decision. These were “(a) whether upon a true construction of the THA Act the THA is not empowered to enter into BOLT arrangements for the purpose of developing and financing construction without the consent of the Minister of Finance and/or outside the statutory framework in the THA Act for the control of expenditure; and (b) whether upon a true construction of the Central Tenders Board Act the THA is not empowered and/or it is unlawful, illegal or void for the THA to enter into BOLT arrangements for the purpose of developing and financing construction projects other than in accordance with the CTB Act.”
On the first issue, the Judge stated that “the (THA) Act makes no provision for the approval of the Cabinet or any Minister for (BOLT) arrangements to be approved.” He therefore concluded that “the THA is empowered to enter into BOLT-type arrangements as described…for the purpose of developing and financing construction without the consent/approval of the Minister of Finance. Further, in entering into such arrangements the THA is not acting outside the express statutory framework for finance/expenditure under the THA Act.” I assume this is what Jack welcomed as proof that the THA was acting in conformity with the law.
On the second issue, the judge pointed to section 3(1) of the CTB Act, which states: “This Act applies to such of the statutory bodies as are set out in the First Schedule to (the) Act notwithstanding any general or special power or authority vested in such statutory body either by Act or by virtue of its incorporation.” The THA is one of the bodies listed in that Schedule, and the Judge further observed that the Assembly is subject to the CTB Act by virtue of section 28 of the THA Act itself.
Employing an argument that I can most politely describe as unique, the THA argued that, yes, it was indeed subject to the provisions of the CTB Act insofar as the undertaking of works and services was concerned. However, the BOLT arrangement in question was “in substance an arrangement for the purchase of lands (my emphasis) and lease back of same where the parties (were contemplating) the construction (by a third party), the ownership (by that third party), the lease (by the THA), and the transfer of the facility (to the THA) in accordance with the terms of the transaction.” Therefore, the THA concluded, the Milshirv project did not fall within the purview of the CTB.
The judge gave the THA position short shrift. He said it was “too narrow a construction of what a BOLT arrangement is and what the CTB Act applies to…(A) BOLT arrangement entails the THA entering into a contract with a third party to construct a facility on lands that it owns for the ultimate purpose of housing various departments under its responsibility in the discharge of its statutory functions. (Judge’s emphasis.) The ultimate object (sic) of the arrangement is to procure the development and construction of an intended facility for the THA. The aspect of constructing on the lands is a fundamental part of the arrangement.”
He went on: “(F)airness would demand that any qualified entity ought to be given the opportunity to bid for a particular BOLT arrangement.” (My emphasis.) And he concluded: “(T)he reasonable and purposeful construction to be given is that the THA is obliged to act in accordance with the CTB Act in respect of any BOLT construction agreement. The THA must therefore act under the ambit of the CTB or by utilising (an entity like) NIPDEC or UDeCoTT if it is to operate outside the purview of the CTB tender rules…” (My emphasis.)
Accordingly, he agreed with the Attorney-General’s position “that a BOLT arrangement by the THA, being a transaction (made) without the benefit of a competitive tender, would be a breach of (the) THA’s obligations to follow the procedures set out in the CTB Act and defeat the policy and purpose of the Act.” (My emphasis.)…READ MORE