…former APNU/AFC Minister to pay $250,000 in court costs for “incoherent” claim
A $90 million lawsuit against the Bank of Guyana and its Governor, Dr Gobind Ganga, was on Monday dismissed by High Court Judge Priya Sewnarine-Beharry, who among other things, deemed it deficient and an abuse of the court process.
Former APNU/AFC Minister Ronald Bulkan
Via a Statement of Claim, former APNU/AFC Minister Ronald Bulkan and his brother, Rustum Bulkan were asking the court to award them damages against Dr Ganga for negligence, deceit, misfeasance in public office for which they were seeking $40 million. Also, they were seeking damages against Central Bank for breach of statutory duty and were seeking in excess of $50 million in damages.
They had accused the Bank of Guyana and Dr Ganga (the first and second named respondents) of neglecting statutory duties when they failed to launch an investigation into the deposit of $82,068,617 into an account for which they are the only authorised signatories, belonging to Precision Woodworking Limited that was held at Republic Bank (Guyana) Limited (RBL).
The two brothers are shareholders in Precision Woodworking, a company that was placed into receivership of RBL in June 2016.
Their Statement of Claim was filed in December 2019 by Attorney-at-Law Patrice Henry. To counter their application, Dr Ganga and Central Bank filed a Notice of Application in February 2020, asking that the lawsuit be dismissed. They were represented by lawyer Pauline Chase.
Central Bank Governor, Dr Gobind Ganga
In doing so, Dr Ganga, among other points, contended that the action was based on an erroneous premise that the deposit was made by an individual into the account. Chase stated that the deposit was not cash but credit, by way of provisioning pursuant to the Bank of Guyana Guidelines No 5 on “Loan Portfolio Review, Classification, Provisioning and other Related Requirements” issued under the authority of the Financial Institutions Act (FIA).
Chase disclosed that the bank account of Precision Woodworking was classified as non-performing by Bank of Guyana and by Republic Bank, with effect from May 31, 2011, as a result of the company being unable to satisfy its debts and obligations to the commercial bank.
Among other things, the lawyer contended that the brothers failed to demonstrate in the Statement of Claim a breach of statutory duty whether supervisory or investigatory under Sections 11 and 38 of the Bank of Guyana Act Cap 85:02 as her clients have at all times discharged their statutory duties in accordance with the Bank of Guyana Act, Cap 85:02 and the Financial Institution’s Act Cap 85:03.
In dismissing the Statement of Claim, Justice Sewnarine-Beharry underscored that the action is an abuse of the process. The High Court Judge held, “Statements of Case must be concise. They must plead only material facts, meaning those necessary for the purpose of formulating a cause of action or defence, and not background facts or evidence. Still less should they contain arguments, reasons, or rhetoric. [This] Statement of Claim is incoherent, prolix, lacks precision and is obscure.”
Furthermore, the Judge said that the action against Central Bank and its Governor should have been brought by Precision Woodworking, and not its shareholders. According to her, it is trite that a company has a separate legal personality from its directors and shareholders. In fact, the High Court Judge ruled that Dr Ganga was improperly sued in his personal capacity.
According to her, Section 4 (1) of the Bank of Guyana Act provides that it shall be a body corporate, while Section 11 provides that the Governor shall be the Chief Executive Officer and shall be responsible for the management of the Bank. Section 38 of the Act, the Judge said, provides that the Bank of Guyana shall have exclusive responsibility for the supervision and regulation of licensed financial institutions under that Act and the Financial Institutions Act.
Against this backdrop, Justice Sewnarine-Beharry held that “Actions for alleged wrongs must be instituted against the Bank of Guyana itself since it is a body corporate. The [Statement of] Claim is devoid of any particulars that support a cause of action against [Dr Ganga] in his personally.”
Furthermore, the Judge noted that the action brought by the brothers is statute-barred. She noted, too, that an action for the recovery of damages must be brought within three years after the cause of action arises. In court documents seen by Guyana Times, the brothers said that the monies were deposited into the company’s bank account on June 16, 2011, and can be supported through a Discovery Statement issued by Republic Bank pursuant to a court order.
The former Minister and his brother further said that during March 11, 2013, to December 22, 2017, they wrote to Dr Ganga; Republic Bank; former Finance Minister Winston Jordan; and former Attorney General Basil Williams in relation to the “unauthorised and suspicious” deposit.
However, on this point, the High Court Judge concluded, “Assuming that the cause of action arose from (1) June 16, 2011, the date of the alleged deposit, (2) March 13, 2013, when the matter was first raised by letter, (3) July 15, 2014, the request for prosecution, or (4) March 22, 2016, by letter intimating to the respondents that there was no evidence to prosecute RBL, each fell outside the limitation period, the action having been filed on December 23, 2019.”
As a consequence, it was ordered that the brothers pay $250,000 in court costs to the respondents on or before October 30, 2020. It was further ordered that counsel for the brothers personally pay costs in the sum of $75,000 to the respondents on or before October 30, 2020, for prolixity of pleadings. The court further ordered that costs awarded shall be paid before any further steps are taken in the proceedings.
In their actions, the Bulkans alleged that Central Bank ignored and had continued to ignore their pleas for an investigation with the view of prosecution in relation to the deposit given that it has regulatory oversight over Republic Bank. They had claimed that despite Republic Bank confirming that the monies were indeed deposited, Bank of Guyana “arbitrary and whimsically” denied the deposit being made.
“[We] are gravely concerned and disturbed that the deposit was a breach of the Anti-Money Laundering and Countering of Financial Terrorism Act by an individual identifiable by name. [We] are accurately aware of the international financial jeopardy that Guyana endured as a result of the Financial Task Force blacklisting Guyana prior to 2015; and of the Government’s post-2015 zero tolerance for money laundering,” the siblings noted in court documents.
In that regard, they said that they are well aware and cognisant of the draconian and ruinous effects of the penalties of fines ranging from $220 million to $520 million, and/or imprisonment prescribed under the Anti-money Laundering and Countering of Financial Terrorism Act.
In addition, the Bulkans were asking the court to award them exemplary damages for the potential harm, distress and unease caused by the Bank’s Governor. They were also seeking substantial costs and further or other order as the court deems just in the circumstances.
