Senator Michael Peyrefitte v Minister of Finance
| Jurisdiction | Belize |
| Judge | Madam Justice Sonya Young |
| Judgment Date | 04 March 2022 |
| Year | 2022 |
| Court | Supreme Court (Belize) |
| Docket Number | CLAIM NO. 563 OF 2021 |
THE HONOURABLE Madam Justice Sonya Young
CLAIM NO. 563 OF 2021
IN THE SUPREME COURT OF BELIZE, A.D. 2021
KEYWORDS: Judicial Review — Rolled up Hearing — Application for Leave — Standing — Award of Procurement Contract — Microsoft Licenses — Illegality — Breach of Finance and Audit (Reform) Act, Cap 15 — Impartiality — Bias — Claytona Principle — Ultimate decision Maker — Remedy
Mr. Dean Barrow SC with Mr. Adler Waight, Counsel for the Claimants.
Mr. Douglas S. Mendes SC with Ms. Iliana Swift, Counsel for the Defendant.
National Trade Union Congress of Belize: Mr. Darryl Bradley
Speednet Communications Ltd: Mr. Andrew Marshalleck SC
This is a decision following a rolled-up hearing of both the Application for Leave to bring judicial review proceedings and the judicial review proceedings.
This is, admittedly, the first of its kind that this Court has done and I embarked with some reluctance at the agreement of Senior Counsel on both sides. It was really no easier but was perhaps less time consuming than the usual two-step process.
The basis of the Application concerns the decision of the First and or Second Defendants to award a contract for procurement of Government of Belize's (GOB) Microsoft subscription renewal licences (the Licences) and support services to Speednet Communications Company Limited DBA Smart! (Smart!).
The Applicant, an Opposition Senator in the Senate of Belize and as such a Parliamentarian and Legislator says that from 2017 to 2021, the GOB contractually procured all Microsoft 365 licences through BTL/Digi (Digi) the nationalized telecommunications company of which GOB owned more that 90%.
In 2021, before the term of that contract expired, the Ministry of Finance (the Ministry) sought a proposal from Digi for a new two-year term agreement.
By June 9 th, 2021, before the proposal was received, the Ministry indicated that the contract would instead be put to tender using the selective tendering process and submissions were to be made for a preferred three-year bid although one-year bids would also be considered.
Digi, Smart! and Innova (a Trinidadian company who had provided licences for the Government prior to Digi) were invited to bid.
In the meantime, a three-month extension was signed with Digi.
Digi and Innova both submitted three-year and one-year bids while Smart! submitted only a one-year bid. The contract was awarded to Smart! and was executed to the extent where $3.37 million, the full sum payable thereunder has been paid over and the licences have been provided.
GOB subsequently cancelled Digi's three-month extension, incurring a payment of $295,015.50 to Digi.
The Applicant says that the decision to enter into the Contract was illegal for two reasons. The Contract was never submitted to the Contractor General for his certificate or written comment contrary to section 18(2) of the Finance and Audit (Reform) Act, Cap 15 (FARA).
Further, in violation of section 19(5) of the FARA, the selective tendering process was used in circumstances where the Ministry must have known that the three-year bid being requested would have exceeded $5 million and such a bid, by law, required the open tendering process.
He also says that the decision was unreasonable since Digi was a silver Microsoft partner since 2017, while Smart! was only a basic partner without Digi's track record or experience in procuring and servicing the licences.
He added that Digi's bid was lower than Smart's when the add-ons offered and set-offs of dividends owed to GOB were considered. This is compounded by the amount paid to Digi on cancellation of the three-month extension.
By awarding the Contract to Smart! GOB was depriving Digi and therefore itself, as majority shareholder, of a significant revenue base, adversely affecting Digi's profits and the Belizean Public's dividend yield.
Finally, the Applicant alleged impropriety through taint of actual or apparent bias. He stated that the First Respondent was the ultimate decision maker regarding the award of the Contract.
The First Respondent had publicly admitted that he owed an immense debt to his brother Jaime Briceno for financing the Party. Jaime Briceno and the First Respondent's first cousin are both part owners of Smart! with Jaime Briceno being the Chairman.
In his Fixed Date Claim Form, the Claimant seeks declarations that the First and Second Defendants acted unlawfully in awarding the Contract and paying the entire contract price without legally and properly executing the contract; that the award of the Contract was in breach of the FARA; and that the decision to award the Contract was wholly irrational and infected by bias.
He also prays an order of certiorari to quash the award of the Contract.
The Respondent/ Defendant conceded in their submissions that the Applicant/Claimant is entitled to “an appropriately worded declaration that the 2nd Defendant acted in contravention of section 18(2) in failing to seek the Contractor General's review and comments prior to executing the contract…. and an accompanying order for costs…”
They, however, deny that the Applicant ought to be granted leave to pursue an order for certiorari as he has no standing to do so. Similarly, leave should be denied him on the issue of the failure to conduct an open tender procedure since the Contract was for a sum less than $5,000,000.00. The provisions of Section 19(5) of the FARA were, therefore, never engaged.
As to the allegation of bias, the Second Defendant says he was the decision maker. He maintained throughout that he only discussed the issue with the Minister of State, in the Ministry of Finance, for his approval and the First Defendant never took any part whatsoever in the process.
The Claimant submits that even if that were true, the First Defendant continues to be the ultimate decision maker and his influence could come to bear on the Second Defendant whether consciously or subconsciously.
There was also raised for the first time in the Claimant's Affidavit in Reply to the Defendant's Affidavit the fact of a circular memorandum (no. 1 of 2021) issued by the Contractor General which required the Contractor General's pre-approval for the use of the selective tendering procedure for amounts above $50,000.00.
An allegation of breach of this directive was not made in the Application for Leave or the Claim Form subsequently filed. Immediate objection was taken to its inclusion for these reasons by Senior Counsel for the Respondent in his submissions.
Although Senior Counsel for the Applicant had made written submissions on the matter, he abandoned it entirely when he presented his oral submissions. So, you will hear no more of that.
There were two intervenors, Speednet (Smart!) to whom the Contract had been issued, and the National Trade Union Congress of Belize (NTUCB) which operates as a trade union federation. The NTUCB's membership is comprised of Association of Public Service Senior Managers, Belize Energy Workers Union, Belize Workers Union, Belize Communication Workers Union, Belize National Teachers Union, Belize Water Services Workers Union, Public Service Union, Southern Workers Union and Progressive Teachers Union, Christian Workers Union, University of Belize Faculty and Staff Union, Student Union of Belize, and Karl Heusner Memorial Hospital Workers Union.
The parties all agreed that the intervenors had a sufficient interest in the matter and ought to be heard.
While the Court considered submissions from both intervenors, it was made clear that they would be heard after the Application for Leave had been determined. The Court found this to be in accordance with Rule 56.11(1) and (2)(c) which reads:
“56.11 (1) At the first hearing the judge must give any directions that may be required to ensure the expeditious and just trial of the claim and the provisions of Parts 25 to 27 of these Rules apply.
(2) In particular the judge may —
(c) allow any person or body appearing to have sufficient interest in the subject matter of the claim to be heard whether or not served with the claim form;”
Any submissions which they may have made on leave was, therefore, not considered.
The NTUCB supported the Claim and submitted that both the provisions requiring the submission of the Contract to the Contractor General (Section 18(3)) and the use of the open tendering procedure (Section 19(5)) are mandatory.
The GOB's failure to comply was in clear violation of the Act and the Contract ought to be struck down.
The NTUCB also asserted irrationality in the government's decision to award the Contract to Smart!. They outlined in support that Digi had the lowest bid for the preferred three-year term, was a nationalized telecommunications company which raised revenue for the government and had proven itself by having its contract to provide the Licences previously renewed.
On the issue of bias, NTUCB opined that Digi had the lowest bid for the preferred three years. But that term was suddenly, and without explanation, rendered inoperative. A fair-minded observer, given the circumstances and being aware of the familial ties and the indebtedness admittedly owed, would say that there was a real danger or risk that the decision was attenuated by bias.
Smart! vehemently denied that there was any breach of section 19. While bids were invited for three years they had not been accepted or a contract awarded which was of or over the threshold amount.
Smart! felt that the irrationality ground was without merit and demonstrated a fundamental misunderstanding of the duties...
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