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You are here: BAILII >> Databases >> The Judicial Committee of the Privy Council Decisions >> Belize Bank Ltd v Attorney General (Belize) (Rev 1) [2011] UKPC 36 (20 October 2011) URL: https://www.bailii.org/uk/cases/UKPC/2011/36.html Cite as: [2011] UKPC 36 |
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JUDGMENT
The Belize Bank Limited (Appellant) v
The Attorney General of Belize and others (Respondents)
From the Court of Appeal of Belize
before
Lord Phillips
Lord Brown
Lord Kerr
Lord Dyson
Sir Patrick Coghlin
JUDGMENT DELIVERED BY
Lord Kerr
ON
20 October
2011
Heard on 6 July2011
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Appellant Nigel Pleming QC Jack Holborn (Instructed by Allen & Overy LLP) |
Respondent Dr. Lloyd Barnett Mrs Lois Young SC (Instructed by Charles Russell LLP) |
LORD KERR (WITH WHOM SIR PATRICK COGHLIN AGREES):
INTRODUCTION
"Messrs Musa and Fonseca explained pretty much what was later said by Mr. Musa in a taped statement recorded for yesterday evening's newscast. In other words, he conceded at long last, he confirmed that it was Twenty Million US Dollars that had been given to Belize by Venezuela but that Ten Million US of the Twenty Million US had been diverted to the Belize Bank in connection, he said, with the UHS guarantee obligation that the Government of Belize had to the Belize Bank.
It was my sense that these gentlemen knew and were, if only tacitly, admitting that it was an outrageous act on their part. Well if they didn't even know it, if they didn't even tacitly admit it, certainly these are my words, and this is how I characterize what has happened, and I believe that they are completely aware of this, that it was an outrageous act on their part to have lied all along so consistently to the. Belizean people in saying from the time of the initial announcement that it was Ten Million US Dollars that had been gifted to Belize by Venezuela for Housing. In fact the figure was from the start the Twenty Million US Dollars that's now been admitted.
Furthermore, it is my sense that these gentlemen had no intention of ever coming clean, even after the general elections of February 7th, 2008, and it was only that fortuitous, or perhaps not so fortuitous, letter from the officials in Caracas that forced public and official scrutiny, that raised for the first time the fact that it was Twenty Million US and not Ten Million US. It was that that sweated Misters Musa and Fonseca and obliged them to crack now."
"Well [the bank], it now turns out, was the recipient of these funds. The government paid the funds without first coming to the public. The government paid the funds by way of, in my view, an improper diversion when you look at what the contract reputedly contained. I would say that [the bank] might perhaps want to explain their position."
"I've indicated to the Belize Bank that I wish to put them on notice, that the Government will also be taking legal advice as to whether they are not obliged to credit that money (return that money if you will), to the Government for the people of this country. I must say that, as far as I can understand, the Bank has been cooperating up to this point in time, and, ah-I don 't know if he is the Director of the Bank, but certainly, Mr Philip Johnson, with whom I met this morning, has indicated that he will take that position to his principals, that I am putting them on notice that (and I put it no higher than this), that we will be seeking legal advice as to whether they are not liable for the return of the US $10m."
The directives and the Appeal Board
"[The Bank] should forthwith credit [the government's] account with [the Central Bank] with US $10m as per 'Payment Details' stated on wire transfer instructions sent by Bandes-Fideicomisos De Venezuela on the 'Cash Payment Confirmation' dated 28 December 2007"
"The law does not require the Minister to supply any information about the credentials of the members of the Appeal Board to any person. Nevertheless, in the interest of transparency, we have no objection in advising you that the members appointed by the Minister are both highly-regarded and respected members of the community, well versed in the relevant disciplines.
Mr Jaime Alpuche is a former Financial Secretary, having held this top post from April 1994 to March 2000. In this capacity he was an ex officio member of the Board of Directors of the Central Bank of Belize. Mr Alpuche is also the Chairman of the Income Tax Appeal Board, the Chairman of the Board of Stamp Commissioners, and a member of the General Sales Tax Appeal Board. He holds a BSc degree in Economics from the University of the West Indies and an MBA from the Strathclyde Graduate Business School, Scotland. Mr Alpuche has been in the private sector for the last eight years, having retired from the public service.
Mr Jeffrey Locke holds a MSc degree in International Management with emphasis on International Finance, International Marketing and Governance. He possesses a vast and varied experience of working as a business and management consultant in Belize and the Caribbean countries. He worked as management consultant with the First Caribbean International Bank (Barbados) from 2005 to 2007."
"As for the impartiality of the members, it is normal practice for members of such Appeal Boards to take the Oath of Allegiance and Office prescribed in Schedule 3 of the Constitution the same oath that is taken by Judges of the Supreme Court before they enter upon their duties. This attests to their independence and impartiality. Apart from the oath, it would be most improper, in our opinion, to ask persons of such high integrity to declare their independence and impartiality."
"Oath of Allegiance and Office
I,_____, do swear that I will bear true faith and allegiance to Belize, and will uphold the Constitution and the law, and that I will conscientiously, impartially and to the best of my ability discharge my duties as [ ] and do right to all manner of people without fear or favour, affection or ill-will. [So help me, God.]"
The right to an independent and impartial tribunal
"This Constitution is the supreme law of Belize and if any other law is inconsistent with this Constitution that other law shall, to the extent of the inconsistency, be void."
"Any court or other authority prescribed by law for the determination of the existence or extent of any civil right or obligation shall be established by law and shall be independent and impartial; and where proceedings for such determination are instituted by any person before such a court or other authority, the case shall be given a fair hearing within a reasonable time."
The procedures for the issue of directives and appeals
"(5) If the Central Bank determines that the acts or course of conduct in question may pose a serious risk to the condition of a licensee, cause a significant financial loss to a licensee or personal gain arising from the foregoing to the person which is the subject of the order or directive, or otherwise seriously prejudice the interests of a licensee's depositors or customers, the Central Bank may issue a summary order or directive which shall take effect promptly on delivery to the subject person affected, who shall be afforded the opportunity to present his views to the Central Bank within ten days after the delivery of the order or directive on whether the order or directive in question should be removed or varied."
(2) An Appeal Board for the purpose of this Act shall be constituted of-
(a) the Chief Justice or other judge of the Supreme Court nominated by the Chief Justice, who shall be the Chairman of the Board;
(b) two other members appointed by the Minister from among persons who have knowledge of banking, finance or other related disciplines:
Provided that no serving member of the Central Bank or of any other bank or financial institution in Belize shall be appointed as a member of the Board.
The appearance of bias
"The question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased."
"The fair-minded and informed observer can be assumed to have access to all the facts that are capable of being known by members of the public generally, bearing in mind that it is the appearance that these facts give rise to that matters, not what is in the mind of the particular judge or tribunal member who is under scrutiny."
"The 'fair-minded and informed observer' is probably not an insider (i.e. another member of the same tribunal system). Otherwise she would run the risk of having the insider's blindness to the faults that outsiders can so easily see. But she is informed. She knows the relevant facts. And she is fair-minded. She is, as Kirby J put it in Johnson v Johnson 201 CLR 488, para 53, 'neither complacent nor unduly sensitive or suspicious'."
"The requirement that the observer be informed means that he does not come to the matter as a stranger or complete outsider; he must be taken to have a reasonable working grasp of how things are usually done."
" I have not lost sight of Mr Nelson's submission that the Minister ought in the circumstances of this case to have considered delegation of his statutory powers, pursuant to section 59(1) of the Interpretation Act, but I consider it, with respect, to be wholly unrealistic. The fact is that the Minister's delegate would be duty bound to act entirely within whatever mandate he was given by the Minister and I doubt very much that resort to such a device could suffice to dispel an appearance of a lack of independence in the resultant appointments, if such existed."
The circumstances of appointment as a basis for the appearance of bias claim
"In determining whether a body can be considered to be 'independent' - notably of the executive and of the parties to the case - the Court has had regard to the manner of appointment of its members and the duration of their term of office, the existence of guarantees against outside pressures and the question whether the body presents an appearance of independence."
" it was contended that the close connection between the executive and the Arbitration Tribunal, especially the appointment of two of its members by the Minister who was a party to any proceedings, necessarily deprived the Tribunal of the character of an 'independent and impartial tribunal'.
As the Court has often observed, independence of the executive is one of the fundamental requirements that flow from the phrase in question. As regards the present case, although two members of the Arbitration Tribunal were nominated by the Secretary of State, the appointments could not be made without prior consultation of the Stockholders' Representatives. In fact, criteria for the selection of members of the Tribunal were worked out jointly and it does not appear that any dispute arose regarding the nominations. What is more, the Arbitration Tribunal was in no way bound by the amount of compensation offered by the Government in the negotiations, as is evidenced by the awards copies of which were supplied to the Court. In these circumstances, there is no warrant for finding a lack of the requisite independence."
The statements of Mr Barrow
LORD PHILLIPS:
LORD DYSON:
"Similarly, while decisions from other (foreign) jurisdictions may provide useful guidance, especially as to the test which is to be applied, a court has to apply that test against the background of the traditions, history and culture of its own society, which may affect the way that the public view such matters. In addition, what may be acceptable, or at least tolerable, in a small jurisdiction where substitute judges cannot readily be found, may be unacceptable in a larger jurisdiction where that problem does not arise."
"In this case, however, I find the provisions in Part X of the Act when read together, as I think they must, will engender, in my view, confidence in the ordinary person in Queen Square Market, as to the independence and impartiality of the Appeal Board itself and its members."
"The fair-minded objective observer should, I think, be given some credit for his intelligence not to be swayed by any and every fancy of bias. The fact that they were appointed by the Minister does not, in my view, make any difference except perhaps to feed into an overly suspicious fancy. Mr Joseph Waight in his first affidavit deposed as to how [Mr Alpuche and Mr Locke] came they came to be appointed. He suggested their names to the Minister. The Minister has to make the appointments. That is what is provided for in the Act. I do not think the robust common sense of fair-minded objective observer would read anything into the fact that Mr Waight discussed the appointment and it was done on the same day."
LORD BROWN:
"Within ten days of the issuance of an order or directive under this section, the person who is the subject of the order or directive may appeal such order or directive to the Appeal Board."
"in my view, in view of the government, what was done by Messrs Musa and Fonseca [the former Housing Minister], and to a lesser extent by Amalia Mai [the former Chief Executive Officer in the Ministry of Home Affairs], is absolutely reprehensible. It is highly immoral, and the product of a conspiracy that seemed to have had as its motive two things: to divert this huge chunk of money that was the property of the Belizean people once it was gifted by Venezuela, to divert it from its legitimate, and proper, and agreed upon use, to divert it so that they, in particular the almighty then Prime Minister and the almighty then Minister of Housing, might use the US$10m as they saw fit."
"I begin by telling you that as this investigation [by the Central Bank under section36
of BFIA] has progressed matters have become even more alarming. . . there is the question of US$10m wired to the Belize Bank from Venezuela with the note on the confirmation notice that 'this was a disbursement for the Government of Belize for its use in the construction of new homes'. I have indicated to the Belize Bank that I wish to put them on notice, that the government will also be taking legal advice as to whether they are not obliged to credit that money (return that money if you will), to the Government for the people of this country (applause). . . . The enormity of what Musa and Fonseca did and Amalia Mai (although I suppose she may be able to have resort to the Nuremberg defence that she was just following orders), but the enormity of what was done is compounded by this fact. US$40m gifted to us by Venezuela and Taiwan was paid over to the Belize Bank."
"BBL should forthwith credit [the government's] account with the Central Bank of Belize with US$10m as per 'Payment Details' stated on wire transfer instructions sent by Bandes [Bank of Venezuela] on the 'cash payment confirmation' dated 28 December 2007."
BBL responded to the directives by challenging the Central Bank's power to issue them and by a letter to the Chief Justice indicating its wish to appeal to the Appeal Board (under section 36(6)),
albeit noting that no Appeal Board in fact then existed.
"70(1) The Minister [defined by section 2 of the Act as the Minister of the Government of Belize for the time being responsible for Finance] shall cause to be appointed [an Appeal Board].
(2) An Appeal Board for the purposes of this Act shall be constituted of
(a) the Chief Justice or other judge of the Supreme Court nominated by the Chief Justice, who shall be the Chairman of the Board;
(b) two other members appointed by the Minister from among persons who have knowledge of banking, finance or other related disciplines:
Provided that no serving member of the Central Bank or of any other bank or financial institution in Belize shall be appointed as a member of the Board.
(3) The terms of office of the members appointed under paragraph (b) of subsection (2) shall be such as may be specified in their instruments of appointment.
71. Any person who is aggrieved by a decision of the Central Bank . . . (e) made under section36
. . . may appeal against the decision to the Appeal Board.
72(1) The Appeal Board may, with the approval of the Minister, make rules to regulate its procedure for hearing appeals, provided that such procedure shall comply with the rules of natural justice.
73. The quorum at any sitting of the Appeal Board shall be two members, one of which shall be the Chief Justice or the Judge nominated by him.
74. At any meeting of the Board, a decision may be taken by a majority of its members, provided that the members constituting the majority shall include the Chief Justice or the Judge nominated by him.
75(1) Upon an appeal under this Act, the Appeal Board may affirm or set aside the decision appealed against or may make any other decision which the Central Bank could have made.
77(1) Any party aggrieved by a decision of the Appeal Board may appeal to the Court of Appeal on the ground that the decision was erroneous on a point of law.
(2) On any such appeal, the Court of Appeal may affirm or set aside the decision appealed against and may remit the matter to the Appeal Board for rehearing and determination by it."
"I began to review the cadre of persons who I considered had expertise in the areas required by section 70. I came up with the names of Mr Jaime Alpuche and Mr Jeffrey Locke. I knew both gentlemen from past working experience.
Mr Jaime Alpuche is a former Financial Secretary. I served under him as Deputy Financial Secretary. Mr Jeffrey Locke is a former employee of the Central Bank before he went to work for SOL. I knew Mr Locke from his time at the Central Bank. I telephoned them and asked them if they would accept such appointment and they had no objection.
I suggested the names of Mr Jaime Alpuche and Mr Jeffrey Locke to the Minister of Finance and he accepted them and made the appointments on 26 March 2008."
Mr Waight also wrote to the Registrar of the Supreme Court to ask the Chief Justice either to act as, or to nominate another judge to be, Chairman of the Appeal Court. In the event the Chief Justice nominated Mr Justice Awich.
"Mr Jaime Alpuche is a former Financial Secretary, having held this top post from April 1994 to March 2000. In this capacity he was an ex officio member of the Board of Directors of the Central Bank of Belize. Mr Alpuche is also the Chairman of the Income Tax Appeal Board, the Chairman of the Board of Stamp Commissioners, and a member of the General Sales Tax Appeal Board. He holds a BSc degree in Economics from the University of the West Indies and an MBA from the Strathclyde Graduate Business School, Scotland. Mr Alpuche has been in the private sector for the last eight years, having retired from the public service.
Mr Jeffrey Locke holds a MSc degree in International Management with emphasis on International Finance, International Marketing and Governance. He possesses a vast and varied experience of working as a business and management consultant in Belize and the Caribbean countries. He worked as management consultant with the First Caribbean International Bank (Barbados) from 2005 to 2007."
He added that: "These are not salaried appointments; the services provided by the members are on a purely voluntary basis. In fact, the Act makes no provision for any salary or stipend to be paid to the members."
The letter concluded:
"Your letter is based on the unwarranted assumption that the members appointed by the Minister would not be impartial. This is not only most unfair but also amounts to an unjustifiable attack on the integrity of the persons concerned, who have accepted the assignments as a service to the community. There is absolutely no basis to impeach the integrity of the members whose credentials are beyond reproach."
It should be made absolutely plain that BBL's case is not that Mr Alpuche or Mr Locke would in fact fail to act impartially on an appeal. Their personal integrity is not under attack. Rather the challenge asserts that an Appeal Board thus constituted does not present the appearance of independence and impartiality. No question is raised as to the propriety of Awich J's appointment. BBL's case is that the Appeal Board's two lay members lack the necessary appearance of independence and impartiality, not because of who they are, but because of how and by whom and the circumstances in which they were appointed.
"Any court or other authority prescribed by law for the determination of the existence or extent of any civil right or obligation shall be established by law and shall be independent and impartial; and where proceedings for such determination are instituted by any person before such a court or other authority, the case shall be given a fair hearing within a reasonable time."
"The Court recalls that in order to establish whether a tribunal can be considered as 'independent', regard must be had inter alia to the manner of appointment of its members and their term of office, the existence of guarantees against outside pressures and the question whether the body presents an appearance of independence.
As to the question of 'impartiality', there are two aspects to this requirement. First, the tribunal must be subjectively free of personal prejudice or bias. Secondly, it must also be impartial from an objective viewpoint, that is, it must offer sufficient guarantees to exclude any legitimate doubt in this respect.
The concepts of independence and impartiality are closely linked and the Court will consider them together as they relate to the present case."
"The characteristics of the fair minded and informed observer are now well understood: he must adopt a balanced approach and will be taken to be a reasonable member of the public, neither unduly complacent or naive nor unduly cynical or suspicious".
Returning (less than a month later) to this same concept of "the fair-minded and informed observer," Lord Bingham in his judgment delivered on behalf of the Board in Prince Jefri Bolkiah v State of Brunei Darussalam [2007] UKPC 62, para 16, added:
"The requirement that the observer be informed means that he does not come to the matter as a stranger or complete outsider; he must be taken to have a reasonable working grasp of how things are usually done."
"Should we welcome this newcomer to our legal village? Not particularly warmly, perhaps. The whole point of inventing this fictional character is that he or she does not share the viewpoint of a judge. Yet, in the end, it is a judge or judges who decide what the observer would think about any given situation. Moreover, the informed observer is supposed to know quite a lot about judges about their training, about their professional experience, about their social interaction with other members of the legal profession, about the judicial oath and its significance for them etc. Endowing the informed observer with these pieces of knowledge is designed to ensure that any supposed appearance of bias is assessed on the basis of a proper appreciation of how judges and tribunals actually operate. The risk is that, if this process is taken too far, . . . the judge will be holding up a mirror to himself. To put the matter another way, the same process will tend to distance the notional observer from the ordinary man in the street who does not know these things. And yet the whole point of the exercise is to ensure that judges do not sit if to do so would risk bringing the legal system into disrepute with ordinary members of the public."
"Criteria for the selection of members of the Tribunal relating to their standing and experience and including a requirement that they should not have any connection with the companies nationalised were worked out in consultation with the Stockholders' Representatives, who were also invited to make proposals as to suitable members."
Rejecting the applicant's complaint under article 6, the Court at para 202 said this:
"[A]lthough two members of the Arbitration Tribunal were nominated by the Secretary of State, the appointments could not be made without prior consultation of the Stockholders' Representatives. In fact, criteria for the selection of members of the Tribunal were worked out jointly and it does not appear that any dispute arose regarding the nominations. What is more, the Arbitration Tribunal was in no way bound by the amount of compensation offered by the government in the negotiations, . . . In these circumstances, there is no warrant for finding a lack of the requisite independence. The applicants did not allege that the members in question were not subjectively impartial. Having regard to the manner in which the appointment procedure was actually carried out, the court is of the opinion that their objective impartiality was not capable of appearing to be open to doubt."
"Looking at the Constitution of the Board I am of the view that a fair minded and well informed observer, that is one who is neither complacent, nor unduly sensitive or suspicious, would come to the conclusion that the Board is impartial. Such an observer would undoubtedly consider that the Board is not stacked in favour of any one party. Both parties have one member on the Board, undoubtedly to look after their interests, and a judge of the High Court is the Chairman." (Emphasis added)
Referring to Lake's case in his judgment below, Carey JA cited the above passage from para 38 of Baptiste J's judgment but somewhat surprisingly omitted to mention that the two lay members of the Board in that case were nominated, one by each party to the dispute.
"The Court does not consider that this establishes that the members are not independent of the executive: to hold otherwise would mean that judges appointed by or on the advice of a Minister having responsibilities in the field of the administration of the courts were also not 'independent'."
"32. In the present case the appointing Minister is, significantly, not only responsible for the Board but also concerned as a party in every case it decides. We agree that that distinguishes the case from many others of ministerial appointment, and calls for clear evidence that in fact the appointing Minister demonstrably abjures any significant input into the selection of members. But if the arrangements which we have set out above for appointment are rigorously followed, we are unable to see that the power of appointment alone need create any objective absence of independence."
"20. The thrust of Prince Jefri's argument on this point, briefly put, is that the fair-minded and informed observer, appreciating that the Chief Justice's prospects of further appointment depended on the goodwill of the Sultan, and that the Sultan could procure a reduction of his salary (against which there was no statutory protection), would apprehend a real possibility that the Chief Justice would be biased in favour of the Sultan in any matter in which his interests conflicted with those of Prince Jefri.
21. The Board has no hesitation in dismissing this submission. The fair-minded and informed observer must be taken to understand that the Chief Justice was a judge of unblemished reputation, nearing the end of a long and distinguished judicial career in more than one jurisdiction, sworn to do right to all manner of people without fear or favour, affection or ill-will and already enjoying what he described as 'reasonably adequate' pension provision. Such an observer would dismiss as fanciful the notion that such a judge would break his judicial oath and jeopardise his reputation in order to curry favour with the Sultan and secure a relatively brief extension of his contract, or to avoid a reduction of his salary which has never (so far as the Board is aware) been made in the case of any Brunei judge at any time. The Chief Justice must be seen as a man for whom all ambition was spent, save that of retiring with the highest judicial reputation."
"The powers which the Divisional Court has been given by section 20(3) fully satisfy these requirements [ie the requirements of the Bryan v United Kingdom (1995) 21 EHRR 342 line of authority]. Not only does it have power to quash the decision taken by the auditor. It has power to rehear the case, and to take a fresh decision itself in the exercise of the powers given to the auditor. In R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2003] 2 AC 295, para 52 Lord Slynn of Hadley observed that the principle of judicial control did not go so far as to provide for a complete rehearing on the merits of the decision. In the case of the procedure governed by section 20(3) however a rehearing on the merits can be conducted, and that is what was done in this case."