In a judgement handed down on Monday by Justice Nareshwar Harnanan, The Plantation Houston Sugar Estates Company Limited was vindicated of accusations of massive tax fraud levelled against it by the Mayor and City Council (M&CC) of Georgetown.
The M&CC had accused the company which is owned by the very popular Vieira family of selling the estates’ lands for billions of dollars without paying the right taxes to the Council. The Council had claimed that it was owed $517,112,222 in taxes. This, among other claims, was dismissed by the High Court.
High Court Judge Nareshwar Harnanan
In November 2019 and February 2020, the M&CC issued General Demand Notes to the proprietors of Houston Estates for rates, arrears of rates, and accrued interest on those rates concerning lands located at Plantations Houston and Rome. According to court documents, the demand notices contained a significant increase in the percentage of rates from 40 per cent to 440 per cent.
Before 2005, the M&CC assessed and levied rates against Houston Estates at the rate of 40 per cent. Houston Estates said that in June 2005, the M&CC purported to increase the percentage rates by 10 times the previous rates to 400 per cent since their lands were classified “land only”.
Houston Estates objected to the purported increase and entered discussions with the Council. During the dialogue, Houston Estates contended that the Council did not contemplate that the lands were within a “Green Belt”, meaning they were used for agricultural purposes.
In November and December 2005, the Council permitted Houston Estates to continue paying rates at 40 per cent until a further decision was taken, and on the condition that the estates would honour whatever is the percentage above the 40 per cent rate.
For 12 years, Houston Estates acted pursuant to this decision and provided proof that rates calculated at 40 per cent before 2005 in relation to lands at Plantation Rome were paid up to December 2019. However, in September 2017, then Town Clerk Royston King wrote Houston Estates indicating that a decision was still outstanding on the general rates to be levied on lands for agricultural purposes.
In that same letter, the then Town Clerk confirmed that all lands being used for agricultural purposes will continue to pay 40 per cent but the lands which are being conveyed to third parties will attract a 400 per cent rate, and where there are buildings for residential and/or business purposes, 40 per cent and 250 per cent, respectively, would apply.
Again, on October 5, 2017, after a 12-year hiatus, King wrote to Houston Estates confirming the Council’s final decision on the payments of rates.
Not indebted
However, two years later, as Houston Estates continued to deal with its lands, offering portions for sale, the M&CC, in November 2019 raised objections before the Registrar of Deeds to passing a transport for a parcel of the land from the estate to a third party. M&CC claimed that Houston Estates was indebted to the Council and that rates are to be calculated at a rate of 440 per cent.
According to Justice Harnanan, the demand notices did not state the period applicable to the arrears, or for that matter, what was the rate of interest being applied, but the parties accepted that it was 21 per cent compounded day to day, going back to 2005.
The Judge found that the M&CC acted in excess of its statutory jurisdiction, improperly and unreasonably exercised its discretion in their decision to issue the General Rate Demand Notices 2019 and 2020, to charge Houston Estates rates on their properties at 400 per cent, their assessed value, and also to charge interest on purported arrears of rates compounded daily at 21 per cent.
The Judge said he is of the view that it cannot be doubted that the M&CC’s letter to Houston Estates in 2005, taken together with its conduct over a 12-year period in fixing and accepting the payment of rates for the lands in question at 40 per cent, binds M&CC to this course of action.
“The applicant [Houston Estates] clearly acted to its detriment based on that representation. A fact that is relevant in this instance is the period of amnesty up to December 2017, which was granted to all defaulting ratepayers, which the applicant could have benefited,” the Judge noted.
The Judge, moreover, found that the M&CC acted without the ambit of its power under Sections 202, 204, 206, 209, 216, and 218 of the Municipal and District Councils Act, Cap 28:01 when it purported to issue the General Rate Demand Notices 2019 and 2020.
In the circumstances, Justice Harnanan declared that the decision by M&CC to impose interest retroactively at 21 per cent, or at the rate charged by the Council as set out in the General Rate Demand Notices 2019 and 2020 is an unreasonable exercise of its discretion, is unlawful and ultra vires. The High Court, therefore, quashed and set aside that decision.
Justice Harnanan further ordered that Houston Estates is not indebted to the Council for the payment of rates in respect of the properties as set out in the General Rate Demand Notices 2019 and 2020.
The Judge, therefore, ordered that an Order of Certiorari be issued directed to M&CC quashing its decision to charge Houston Estates in respect to its properties situated at South Half Plantation Houston and North and South Halves Plantation Rome rates totalling $517,112,222.
The Court also made an order that costs be assessed, if not agreed, on or before Friday. The Court noted that an award of costs ordered, whether agreed or assessed, carries interest at the rate of four per cent per annum from the date hereof until it is fully paid.
