…….”Case goes before Privy Council”
By FRANCIS JOSEPH
A case has been lodged before the Judicial Committee of the Privy Council where more than $1 billion is in a fund at the Ministry of Finance for victims of uninsured drivers. Since the Fund was established in 2008, no money has been paid out. Why? There is no law in place for disbursements.
Attorney Davindra Maharaj and the Motor Insurance Bureau Association have taken the Minister of Finance, the Board of Inland Revenue, and the Attorney General, to court asking among other things, why is this money sitting at the Ministry for all these years.
Maharaj lost the judicial review case before the High Court and the Court of Appeal, now he is asking the British judges to rule in his favour. No date has yet been fixed for the hearing.
THE FACTS
Maharaj and the Motor Insurance Bureau Association are suing the State over the Government’s collection of $1,046,905,472 in motor insurance premium taxes since 2008, which it claims was intended to compensate victims of uninsured drivers but has not been used for that purpose.
On March 14, 2018, Justice Ricky Rahim dismissed the judicial review case. In July 2024, Justices of Appeal Prakash Moosai, Charmaine Pemberton, and James Aboud also dismissed the appeal.
Justice Rahim had found that the Bureau’s claim, which was supported by Maharaj, lacked legal merit. He ruled there was no evidence showing the finance Minister or the Board of Inland Revenue (BIR) acted unreasonably by allowing the tax collection.
Maharaj and the association argued that the levy contradicted the Miscellaneous Taxes Act and that the BIR had been unjustly enriched by collecting taxes under false pretences. Maharaj also sought repayment of $5,456 in collected premiums.
The Bureau sought a court declaration that the Ministry’s failure to establish a Motor Insurance Bureau to disburse compensation was unreasonable, given the taxes had been levied ostensibly for that purpose. Both parties requested an order requiring the Ministry to pay all collected funds into court.
The then PNM Government first proposed the fund during its 2008 budget presentation. By 2017, when Justice Rahim delivered his ruling, the collected amount had surpassed $1 billion, but none of it had been distributed.
According to State submissions, the disbursement of funds was not possible due to the absence of legislative instruments needed to authorize such payments. As a result, the fund remained dormant, with no additional allocations made since 2017.
Justice Pemberton, who delivered the appellate ruling, said Justice Rahim’s judgment was well-reasoned. She referenced testimony from the former Finance Ministry Permanent Secretary, Vishnu Dhanpaul, who stated legislation was required to establish a fund separate from the Consolidated Fund.
In the absence of that legislation, taxes were deposited into a suspense account, while actual tax collections by the BIR went directly into the Consolidated Fund under the Exchequer and Audit Act. Justice Rahim had noted that taxes collected as insurance premiums were not intended to compensate victims of uninsured drivers.
During the appeal, Maharaj and the Bureau cited past Finance Ministers’ budget speeches as creating a legitimate expectation. However, Justice Pemberton ruled that such expectations must be backed by Parliamentary approval, which had not occurred.
The State had also maintained that any such scheme must be authorized by Parliament under the Appropriation Act. Pemberton held that the judiciary could not interfere with matters not enacted into law and noted no evidence had been presented of fund misuse.
She further ruled that ministerial budget speeches could not serve as the basis for legal expectations and questioned whether inaction alone, without misuse, was grounds for court intervention.
In dismissing the appeal, Justice Pemberton noted the persistent threat posed by reckless driving. She added, “Trinidad and Tobago has a serious challenge when it comes to the carelessness and sometimes callousness of road users.
“Many do not understand or appreciate that a motor car in the hands of an impaired person is a lethal weapon. One only needs to ask surviving victims and their families, and sadly, the families of those who do not survive the truth of the unfortunate and sometimes devastating consequences, both financially and emotionally, of that statement.
“It is a cost as well that this society has met and will continue to meet until we take some concrete steps to alleviate the causes and effects of these distressing consequences.
“This situation is one of national importance, since, as we deliver this judgment, the carnage on our roads remains unabated, whether involving drivers, whether insured or uninsured.”
QUESTIONS BEFORE PRIVY COUNCIL
(1) Was it unlawful to collect taxes and remit these taxes towards a fund for the compensation of victims of uninsured drivers in circumstances where this fund was not lawfully established?
(2) Did collecting taxes and remitting them towards the fund for the compensation of victims of uninsured drivers in circumstances where this fund was not lawfully established breach the first appellant’s legitimate expectation that taxes would only be applied in accordance with the purposes of the Miscellaneous Taxes Act Chap 77:01?
(3) Did the failure to establish a scheme for the compensation of the victims of uninsured drivers breach the second appellant’s legitimate expectation that such a scheme would be established?
(4) Was it unreasonable for the Government of Trinidad and Tobago not to take steps to establish a compensation fund for the victims of uninsured drivers?
