The Caribbean Court of Justice brought down the hammer on Said Musa and Francis Fonseca in its most recent judgment when it ruled on the legality of a settlement deed signed by these two individuals while they were the Prime Minister of Belize and the Attorney General respectively, in 2005. The judgment, while it did not name the duo specifically, it did make mention of their actions.
At paragraph 35, the judgment explains that aside from having given BCB and the Belize Bank a special taxation structure ,Said Musa asserted his office’s influence on the terms of that tax structure. It states that, “The Award discloses that the Deed was buttressed by other assurances made to the Companies. The Deed was accompanied by a letter dated 21st June 2006 addressed to the Chairman of the Companies in which the Minister of Finance “irrevocably confirmed” that all business and income tax obligations of the Companies would be governed by the terms of the Deed. The Minister also confirmed that the Deed had “irrevocably fixed” the rate of income tax payable by the Companies for as long as BCB Holdings remained a Public Investment Company notwithstanding anything contained in the Income and Business Tax Act to the contrary”
In sum, in exchange for settling the prior arbitral proceedings, the Deed purported to create and guarantee to the Companies a unique tax regime that was unalterable by Parliament. So, for the sake of argument, if BCB remained a Public Investment Company for the next 15 years, the State of Belize would be in breach of contract if its National Assembly, at any time during that period, without the Companies” concurrence, enacted any revenue measure applicable to the Companies that diverged from the Deed. The promises made by the Minister were thus intended to supplant and supersede all current and any future statutes enacted by the National Assembly.”
Later on, the judgment took an almost scolding tone to drive the point that it is absolutely necessary to maintain separation of power between the executive and the legislature. At paragraph 42 the ruling states: “In relatively small Parliaments like Belize, and where the Executive is largely drawn from the legislature, the separation between these two bodies often appears blurred. But it is erroneous to assume that there is not an important division between the functions performed by each branch.” It continues: “The rights and freedoms of the citizenry and democracy itself would be imperilled if courts permitted the Executive to assume unto itself essential law-making functions in the absence of constitutional or legislative authority so to do. It would be utterly disastrous if the Executive could do so, selectively, via confidential documents. In young States especially, keen observance by the courts of the separation of powers principle remains vital to maintaining the checks and balances that guarantee the rule of law and democratic governance. Caribbean courts, as part of their general function of judicial review, have a constitutional obligation to strike down administrative or executive action that exceeds jurisdiction or undermines the authority of the legislature.
The judgment then turns to specifically address the fact that Musa, through a settlement deed, gave British Caribbean Bank and the Belize Bank special tax arrangements that were contrary to the tax laws. In the ruling it was clear that Musa simply did not have the authority to do so. It states at paragraph 44, “The principle that only Parliament should impose, alter, repeal, regulate or remit taxes is paramount. The National Assembly may in particular instances delegate aspects of its taxing powers but, absent such delegation, which in all cases must be strictly construed, the Executive branch is forbidden from engaging in such activity. To hold that pure prerogative power could entitle the Minister to implement the promises recorded in the Deed without the cover of parliamentary sanction is to disregard the Constitution and attempt to set back, over 300 years, the system of governance Belize has inherited and adopted.”
The strongest of statements made in the judgment comes in paragraph 53 where the judges minced no words to drive home the point that the actions by Musa and Fonseca to sign documents contrary to law should never be tolerated. It states that “Prime Ministerial governance, a paucity of checks and balances to restrain an overweening Executive, these are malignant tumours that eat away at democracy. No court can afford to encourage the spread of such cancer. In our judgment, implementation of the provisions of the Deed, without legislative approval and without the intention on the part of its makers to seek such approval, is indeed repugnant to the established legal order of Belize.”
The ruling which is was issued on Friday, July 26th has far reaching effects since the previous Musa Government was know to make deals that were almost always never beneficial to the people of Belize. For the CCJ to now categorically point out that what Musa and Fonseca did as being illegal is a major victory for Belize. Commenting on the situation, Hon. Dean Barrow stated that, “it is a huge, huge victory, not just for the administration but for country. It is vindication of the stance that I took from the very start where I maintained that it was illegal and unconstitutional and cannot be countenanced.” He added that as a result of the judgment no other executive will try this kind of thing again. And while he asserted that under his administration these kinds of deals will never happen, he maintains the UDP’s position that these kinds of deals are totally wrong.
While the signing of the Settlement Deed by Said Musa was something that in and of itself was reprehensible, the Prime Minister noted, that the actions of Francis Fonseca who also signed the document as Attorney General was very much in the same category as Musa. Prime Minister Barrow stated that Government is at this point in time contemplating whether or not civil action should be brought against both Musa and Fonseca. He concluded saying that, “this is a play on both their houses and will forever be a day of shame when these people could have signed a document like this”.
