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UHS debt haunting GoB

In Supreme Court, Belize Bank applies for enforcement order for UHS GoB debt

BELIZE CITY, Thurs.  Dec. 6, 2018– Yesterday morning, attorneys representing the Belize Bank (Eamon Courtenay, S.C.) and the Government of Belize’s Queen’s Counsel, Doctor Ben Juratowitch, along with their assistants, filed into the courtroom of Chief Justice Kenneth Benjamin, where the bank submitted an application for an enforcement order that would allow it to collect over $95 million that the government of Belize was ordered to pay the bank in rulings by multiple high courts, which had ruled that a 2004 government guarantee for a $33.5 million  loan to Universal Health Services (UHS) was a legal contract.

Submissions by both sides continued all day yesterday and today, Thursday, and when the hearing concluded shortly before 5:00 p.m. today, Courtenay spoke to reporters outside of the courtroom. “I think it’s a very simple and straightforward case. The Caribbean Court of Justice has issued a certificate and the Caribbean Court of Justice has said it is a judgment and the Crown Proceedings Act makes provision for us to enforce where the government refuses to pay, and the government has refused to pay,” he said.

Courtenay explained that Chief Justice Benjamin wanted to know what the government’s response to the bank’s proposal to settle the debt was. “The government came with what I would describe was a disingenuous position, and I told the court the government was not respectful of the court. It was not frank with the court,” Courtenay said. “It was not honest with the court and I hope the Chief Justice treats their answers with the contempt that it deserves,” he remarked.

Courtenay said that the bank has used monies of depositors. “Whatever politics the government wants to play with this, it is depositors’ money that has been lent, and where the court says pay back this money, the government must pay it back,” he said.

Courtenay said the litigation is at an end, and the government should be honorable, be respectful and perform their duty.

“I hope that between now and the 11 January when the decision is given, that the government will take what I would describe as a refined and enlightened view, and do the right and proper thing and not force the Chief Justice to have to decide whether he’s going to have to make an order against the Minister of Finance. It is unnecessary,” Courtenay said.

The attorney for the Belize Bank explained that his clients “have said that they are prepared to sit down and accept payment in treasury notes, to accept payment over time.”

Courtenay was asked if the bank’s offer was formally made at the executive level or if it was only made in court.

“I was a little taken aback to hear the government saying that this is something that is new. We wrote them about that coming up to a year, saying that we are prepared to do that a long time ago,” Courtenay said.

Courtenay said that Financial Secretary, Joseph Waight, gave evidence yesterday saying that “we can receive payment by treasury notes in a way that would not affect government finances. I think government was taken aback by his candor and his honesty with the court, so that this matter can be settled. Mr. Waight’s evidence is very clear; it can be settled in a way without being prejudicial to the commitment that government has made to the bondholders and others.”

It was suggested to Courtenay that the bank cannot seize the assets of the country nor imprison the Prime Minister.

Courtenay replied that the Prime Minister “is not above the law.”

Courtenay said whatever personal feelings exist between Mr. Barrow and Mr. Ashcroft, when a matter goes to the court, which is independent and impartial and hears both sides and “you lose, you lose”. Courtenay said that the laws of the country dictate that the decisions of the court must be honoured. He said that the decision was made by the CCJ—that the Belize Bank must be paid. “The courts have spoken and we must honor the decision of the court. If not, the heavens will fall,” Courtenay said.

Courtenay was asked what the quantum of the debt is at the present time.

“That is a very good question. I don’t know, but it’s close to 100 million. Interest continues to accrue at 6 percent. How does the people of Belize benefit from a debt that interest continues to accrue on, which everybody knows has to be paid. Is that in the public interest? Clearly not,” Mr. Ashcroft’s attorney said.

On Friday, August 31, 2018, the members of the governing United Democratic Party (UDP) voted down a money bill that was introduced to the House in January by Prime Minister Dean Barrow to satisfy the Universal Health Services loan guarantee to the Belize Bank, which government was ordered by the Caribbean Court of Justice (CCJ) in November 2017 to pay.

The Opposition People’s United (PUP) Party’s members of the House walked out of the sitting, before the vote was cast.

In June 2018, the bank had applied to the CCJ for an enforcement order, but the CCJ did not rule on the bank’s enforcement application because the matter had not yet been taken to the House of Representatives and voted on.

During yesterday’s hearing, Courtenay questioned Financial Secretary Joseph Waight. One of the questions that Courtenay asked Waight had to do with a proposal advanced by the bank that it was prepared to work out a payment schedule with government to settle the debt.

Waight did not immediately answer the question before he left the witness stand. Chief Justice Benjamin told him the court required that he answer the question.

When he left the hearing, Waight told reporters, “The Chief Justice asked me to consult with my authorities. That is what I will do. I can’t speculate, predict what the outcome of that discussion will be.”

Waight was asked if it was his understanding that no discussion has taken place in consideration of the offer made by the bank.

Waight explained: “The offer was made some months ago to the AG, who is the government’s legal representative. I am sure it was discussed in Cabinet but nothing came my way to say that the offer was either accepted or not.”

Waight then added, “Obviously, it was not accepted because we have not made the payment.”

Would it be prudent for the Government to accept this offer, Waight was asked.

“I can’t answer that,” Waight said. “I mean, basically what you try to do is try to settle all your obligations. It is a constitutional matter. I can’t really talk.”

  Waight was also asked if settling the debt by installment or treasury notes would affect the country’s surplus, as the Central Bank had previously said.

“The Central Bank recorded a stock, treating the award as a debt. We look at the flow side of things. We classify the debt when we actually have to pay it. It’s like a loan agreement. We passed a loan agreement for seven million dollars. That doesn’t mean we have incurred seven million dollars in debt. What we do is when we disburse it our debt goes up. In our classification, when we make a payment we fund the debt. We may have to borrow money. From our point of view, we don’t incur the debt until we actually fund it,” Waight disclosed.

While the court instructed Financial Secretary Waight to discuss the bank’s offer with his superior, the Prime Minister, the Attorney General, Michael Peyrefitte, is of the view that the government has already decided on the UHS debt and this decision will be communicated to the court tomorrow, Thursday.

AG Peyrefitte told reporters, “We have an answer, but I would not want to tell the media before the lawyers have gotten a chance to tell the Chief Justice, out of respect. As per usual, I don’t want to discuss the merits of a case that is in process. I think it is very disrespectful to the court. I understand your need to ask the question but I beg of you to understand the position that I can’t discuss it at this point.”

Peyrefitte confirmed, however, that the matter was discussed by Cabinet.

“It was discussed there and like I said, we have an answer. We believe that our position was made clear a long time ago,” Peyrefitte insisted.

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