PORT OF SPAIN – The Trinidad-based Caribbean Court of Justice (CCJ) has dismissed an appeal filed by six people against the Supervisor of Elections and the Belize government after they said they were unable to recoup their investments in the CLICO (Bahamas) Limited following the collapse of its parent company a few years ago.
The appellants – Kent Herrera, Nakita Usher, Valdemar Castillo, Vildo Marin, Eugenio Ek and Leonardo Varela – were Executive Flexible Premium Annuity (EFPA) policyholders and claimed they suffered serious financial loss when the company went into liquidation in 2009 and were unable to recoup their investment in the company.
As a result, they instituted action against the Prime Minister Dean Barrow, his attorney general and the Supervisor of Insurance, Alma Gomes, seeking to recover their losses.
The action was premised primarily on the basis that section 26 of the Insurance Act Cap 251 required the establishment and maintenance of a statutory fund designed to protect them against the type of loss they suffered.
The appellants claimed that that they suffered losses because the respondents, in particular, the Supervisor of Insurance was reckless in her conduct of regulating CLICO in accordance with the Act and specifically in her duty to maintain the statutory fund in a proper manner
But the Supreme Court held that section 26 of the Act, did not confer on the Supervisor an implied duty that was actionable by the appellants.
The judge also held that section 4(3) of the Act conferred on the Respondents blanket immunity from suit and that the Supervisor had not acted recklessly.
The Court of Appeal, on the other hand, found that the statutory fund constituted security for the benefit of the appellants and that the respondents were in breach of the Act.
The Court of Appeal however, upheld the trial judge’s findings that the respondents were protected from suit as the Supervisor had acted in good faith in the exercise of her duties under the Act.
The CCJ, in its ruling late Thursday, noted that the main issue to be decided was whether the respondents could avail themselves of the statutory bar contained in section 4 (3) of the Act, which states that the respondents and any officer or person acting pursuant to any authority conferred by the Minister or the Supervisor, as the case may be, shall not be liable to any action in respect of any matter done or omitted to be done in good faith in the exercise or purported exercise, of the functions conferred by or under the Act.
The CCJ said it was of the view that that before the good faith immunity could be addressed, it needed to establish whether there was a breach of statutory duty to maintain the statutory fund and if there was such a breach, whether it gave rise to a private law action by the appellants.
The CCJ, noting that the courts below had answered both questions in the affirmative and that there had been no appeal against those findings.
The CCJ was of the view that the legislature’s purpose for establishing the statutory fund was to ensure that policyholders such as the appellants were protected from financial loss in circumstances such as these.
It said to deny such affected persons a cause of action would have rendered the statutory provision meaningless.
The CCJ said that an examination of section 4 (3) of the Act found that it restricted private law actions to instances where those responsible were not acting in good faith.
It ruled that statutory good faith defences were intended to relieve from liability to suit public officials who acted with honesty of purpose. It placed the onus on the respondents to adduce sufficient facts and circumstances to avail themselves of the defence.
In considering whether the Supervisor of Election was reckless, the CCJ found that the Act afforded the Supervisor a great degree of discretion in her administration and regulation of the insurance industry.
In particular, the CCCJ noted that while section 13 (2) of the Act empowered the Supervisor to sanction companies that failed to comply with pre-conditions for licencing and or licencing renewals, and section 16 (1) empowered her to cancel licences, these sections did not suggest that the Supervisor must invariably take the most drastic actions available.
It said similarly, section 31(b) expressly authorised the Supervisor to consider any explanations made on behalf of the company before giving directions where the company had neglected to furnish, in a timely manner, documents relating to their statutory fund requirement
The CCJ also noted that neither the Supervisor nor anyone else could have foreseen CLICO’s sudden collapse and that in all the circumstances, held that the Supervisor had acted in good faith and the Respondents were accordingly protected from suit. (CMC)
