DEREK ACHONG

Se­nior Re­porter

derek.achong@guardian.co.tt

Con­tract­ing com­pa­nies and ser­vice providers owed hun­dreds of mil­lions of dol­lars in un­paid fees from state-owned project man­age­ment com­pa­ny Ed­u­ca­tion Fa­cil­i­ties Com­pa­ny Lim­it­ed (EF­CL), have scored a ma­jor le­gal vic­to­ry in their bid to re­coup their out­stand­ing debts.

De­liv­er­ing a de­ci­sion yes­ter­day, High Court Judge Car­ol Gob­in dis­missed a pe­ti­tion from the com­pa­ny’s board to wind up the com­pa­ny.

Had the pe­ti­tion been grant­ed, a court-ap­point­ed liq­uida­tor would have been man­dat­ed with sell­ing the com­pa­ny’s min­i­mal as­sets to re­pay its cred­i­tors.

Con­sid­er­ing that when the pe­ti­tion was filed last year, EF­CL’s as­sets con­sist­ed of $4,508 in its ac­count at RBC Roy­al Bank and $46,000 in of­fice fur­ni­ture it would have meant that the con­trac­tors could have on­ly hoped to have re­cov­ered a mi­nus­cule frac­tion of what they are in fact owed.

Pro­vid­ed that EF­CL does not suc­cess­ful­ly ap­peal Jus­tice Gob­in’s de­ci­sion, it now means that the com­pa­nies can now bring lit­i­ga­tion against mem­bers of EF­CL’s board, who served be­tween 2015 to present, the Of­fice of the At­tor­ney Gen­er­al, the Min­is­ter of Ed­u­ca­tion, or the Min­is­ter of Fi­nance to re­cov­er their debts.

In de­cid­ing on the pe­ti­tion, Jus­tice Gob­in had to con­sid­er whether Sec­tion 355 of the Com­pa­nies Act, which pre­scribes the pro­ce­dure for court-or­dered liq­ui­da­tion, could ap­ply to State-owned spe­cial-pur­pose com­pa­nies such as EF­CL.

She not­ed that it could not as un­der the Con­sti­tu­tion and leg­is­la­tion, the Min­is­ter of Fi­nance as the com­pa­ny’s cor­po­ra­tion sole is re­quired to re­port to Par­lia­ment on its fi­nan­cial well-be­ing. She point­ed out that such a du­ty for trans­paren­cy and ac­count­abil­i­ty does not ap­ply to pri­vate com­pa­nies.

“The court would be of­fer­ing wind­ing up as a read­i­ly avail­able al­ter­na­tive. This, in my opin­ion, is im­per­mis­si­ble,” she added.

Jus­tice Gob­in al­so made note of the fact that the wind­ing up of the com­pa­ny was not sug­gest­ed when EF­CL’s fi­nan­cial sit­u­a­tion and al­leged sys­temic mis­man­age­ment were con­sid­ered by a Joint Se­lect Com­mit­tee (JSC) on State En­ter­pris­es in March 2018.

Jus­tice Gob­in al­so con­sid­ered claims by the com­pa­nies that chal­lenged the pe­ti­tion, that EF­CL did not pro­vide ev­i­dence that its board and not the Gov­ern­ment de­cid­ed on the course of ac­tion.

Stat­ing that the de­ci­sion was in­con­sis­tent with the op­ti­mism ex­pressed be­fore the JSC, Jus­tice Gob­in said, “Giv­en the lev­el of con­trol that is ex­er­cised and the state to which EF­CL had been re­duced as a re­sult of de­ci­sions tak­en by the gov­ern­ment, the rec­om­men­da­tion claimed would be otiose.”

Deal­ing with EF­CL’s claims over its in­abil­i­ty to ser­vice its sig­nif­i­cant debts, Jus­tice Gob­in point­ed out that it was par­tial­ly due to its gross reck­less­ness in de­fend­ing lit­i­ga­tion against it for un­paid fees.

“The debt was sim­ply al­lowed to mount. It is as­tound­ing that this was al­lowed to hap­pen with seem­ing dis­re­gard for the ef­fects on the pub­lic purse,” she said.

Jus­tice Gob­in not­ed that the most dis­turb­ing as­pect of the pe­ti­tion was the com­pa­ny’s claim that it has ceased to car­ry on busi­ness and is un­able to meet the ob­jec­tives for which it was es­tab­lished.

She not­ed that de­spite the claims, the ob­ject­ing com­pa­nies pro­vid­ed ev­i­dence that an­oth­er State com­pa­ny, the Na­tion­al Main­te­nance Train­ing Ser­vice Com­pa­ny (MTS), is now pro­vid­ing the ser­vices for­mal­ly pro­vid­ed by EF­CL.

“What has been achieved from the move over from EF­CL to MTS fa­cil­i­tates a trou­bling de­gree of ar­bi­trari­ness. It raised sus­pi­cions of de­lib­er­ate ma­nip­u­la­tion to wield un­fair­ness and un­equal treat­ment of cred­i­tors,” she added.

Jus­tice Gob­in al­so point­ed out that in 2018 for­mer plan­ning and de­vel­op­ment min­is­ter Camille Robin­son-Reg­is ac­knowl­edged EF­CL’s debt and stat­ed that con­trac­tors would even­tu­al­ly be paid.

Jus­tice Gob­in al­so stat­ed that the ob­ject­ing com­pa­nies had valid claims for un­just en­rich­ment as they pro­vid­ed goods and ser­vices for the ben­e­fit of the State and were not paid.

“In the cir­cum­stances, wind­ing up will be an ex­er­cise in fu­til­i­ty in­so­far as their quest for jus­tice is con­cerned,” she said.

She al­so not­ed the fact that on­ly a mi­nor­i­ty of cred­i­tors ob­ject­ed to the move was not rel­e­vant.

“I would not be sur­prised if oth­ers have cho­sen to adopt a wait-and-see ap­proach,” she said.

As part of the de­ci­sion, EF­CL was or­dered to pay the com­pa­nies’ le­gal costs.

In its pe­ti­tion, filed in late Feb­ru­ary, last year, EF­CL’s act­ing chief ex­ec­u­tive of­fi­cer Gay­a­tri Badri-Ma­haraj sought to de­tail the com­pa­ny’s cur­rent as­sets and li­a­bil­i­ties in a bid to have it wound up.

She not­ed that the com­pa­ny had 79 un­sat­is­fied judg­ments/awards dat­ing back to 2016 and to­talling $321 mil­lion, 30 pend­ing law­suits in the High Court and In­dus­tri­al Court over $119 mil­lion, and le­gal claims which are yet to be filed to­talling $47 mil­lion.

It al­so has a $156 mil­lion bal­ance on a syn­di­cat­ed loan agree­ment with RBC Trust (T&T) Lim­it­ed, which it en­tered in­to to help fi­nance the con­struc­tion of schools in 2017.

Badri-Ma­haraj al­so point­ed out that the com­pa­ny’s 41 em­ploy­ees have not been paid since Sep­tem­ber 2021 and were owed ap­prox­i­mate­ly $2.27 mil­lion.