QC: Govt justified in changing EFPA stance

Among these factors were the state of the economy and the fulfilling of relevant obligations by Clico’s parent company CL Financial to a MOU signed with Government and Central Bank in 2009, for the bailout of Clico.

According to British Queen’s Counsel (QC) Allan Newman, there was justification for government’s departure from its original promise to EFPA policyholders and yesterday he urged the appellate court to pay due deference to the macro and political nature of the legitimate expectation created initially and the subsequent deviation from it.

Newman is leading the State’s case in an appeal against a ruling in March by Justice Joan Charles who directed that EFPA policyholders receive their payments. Charles ruled that the current government failed to keep a promise made to policyholders by the previous PNM government that they would be paid the full amount due on their annuities.

The 250-plus policyholders’ lawsuit, filed under the name United Policyholders’ Group, challenged a decision of the Government to refuse to honour the PNM’s promise made in 2009 for full compensation of policies.

In his arguments before Chief Justice Ivor Archie and Justices of Appeal Gregory Smith and Rajendra Narine, Newman QC said the legitimate expectation created by the PNM government in 2009, was conditional.

Providing the appellate judges with a history behind the bailout and key components of the MOU signed in 2009, Newman said the legitimate expectation was derived from the MOU and it was dependant on the state of the economy and fulfilling of relevant obligations by CLF. He also pointed out that there was no guarantee that policyholders would be repaid the full amount held in Clico.

Newman said when the previous administration announced, following the collapse of Clico in early 2009, that policyholders’ investments in Clico would be safe and, if there was any deficit in the company’s statutory fund, that Government would make up the deficit, the gravity of the situation was still not clear. Two days have been set aside for hearing of the appeal. It is the State’s contention that to repay all Clico policyholders in full, would have put a strain on the TT economy.

Also appearing with Newman are Russell Martineau SC, Kelvin Ramkissoon and Kerry Ann Oliverie.

The United Policyholders Group is represented by Knox QC, Ramesh Lawrence Maharaj SC, Peter Strand, Vijaya Maharaj and Nyala Badal.