EMBD’s fishing expedition

IMPORTANT lessons should be learned from the Estate Management and Business Development Company Ltd (EMBD)’s failed defence of a case brought by Junior Sammy Contractors Ltd.

The Privy Council’s decision to rule against the special-purpose entity on October 29 exposes the miserable failure of the state to establish any reasonable basis behind its decision to litigate this matter and returns to the fore troubling questions about the management of briefs under the Ministry of the Attorney General.

The EMBD refused to pay the contractor for work done almost ten years ago. Why it chose to do so, no one knows. Not even the EMBD itself.

As it sought to defend a claim for $82.8 million, it alleged the contractor might have committed fraud by inflating numbers. Except, it had no evidence.

In fact, in an act of circular reasoning so dizzying it is hard to believe, the EMBD asked Junior Sammy to show, through the disclosure of specific documents, what the EMBD alleged the contractor had done wrong.

It was the definition of a fishing expedition.

The law lords were scathing. They noted nothing in the EMBD’s defence rose beyond the “fanciful or speculative.” A request for disclosure could not be supported, given the “inadequate quality of the evidence.” No expert testimony was advanced. There was nothing beyond one lawyer’s assertion. A key audit report never materialised. The charge of fraud was “wholly insufficient.” And there was “no substance” behind the reasoning of the EMBD.

This was the case which Attorney General Reginald Armour, SC, incredibly described in the following terms on October 30: “This was not a frivolous appeal by the EMBD. This was a serious appeal. There were serious issues of law.”

Even if there were some interesting points to be resolved (and the law lords declined to do so, simply applying the law to the facts) it should have been obvious that this was a woefully inappropriate vehicle for such academic explorations at taxpayers’ expense.

If there is any wrongdoing to be discerned in this case, it actually arises from the way a state agency ensnared a private entity for years in litigation for no good reason and at great expense.

All of this sends a terrible signal in a situation in which the state will need to rely more and more on public-private partnerships in coming years, given the Treasury’s depleted revenue profile and pressures on procurement.

Featuring a defence rich in innuendo and built entirely out of hot air, this was a matter that was continued likely because it was expedient to do so since it was proximate to proceedings implicating political entities.

But the loss, because it is so embarrassing, damages all efforts, ongoing and future, to retrieve treasury money where there is genuine merit in doing so.

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