15 March, 2010


Not that I am a constitutional expert. Far from it. When I served as a judge, many of my judgements were reversed on appeal.  So, take this my opinion with the grain of salt it undoubtedly deserves.
In my opinion, when the government of Anguilla negotiates a Memorandum of Understanding or a Memorandum of Agreement [they both mean the same thing] with a developer, which agreement requires a change of the law, this agreement is not binding until the House of Assembly changes the law.  The agreement does not bind future governments.  It certainly does not bind the House of Assembly.  No Executive Council represents the House of Assembly or can speak on its behalf.  The House of Assembly is the law making body of the country.  The House of Assembly is free to completely ignore or to repudiate any agreement entered into by the government of the day.  It is the duty of the government to present any agreement they have made and which is subject to approval of the House of Assembly to the House to give it the validity of law.  If government fails to present the agreement to the House for approval, the agreement is worthless.  When the law says that only the House of Assembly can agree to something, any agreement by the government is subject to agreement by the House of Assembly. 
The Customs Act is such a law.  No exemption from customs duty under the Customs Act has effect, except it is passed by the House of Assembly.  Only the House can ratify an exemption from customs duty.  One of our major criticisms of the last government was that they made agreements for exemption from Customs Duty that had not been approved by the House of Assembly.  Executive Council has no authority to approve exemption from customs duty, unless they get it approved by the House of Assembly.  At most, Executive Council can agree to move a Resolution in the House of Assembly to exempt a developer from customs duty.
Our new government is subject to any decision made by the House of Assembly.  If the present House should repudiate any previous government’s MOU with Cap Juluca or with Flag Luxury Resorts, or the with Viceroy, which may have been approved by the last Executive Council, but not approve by the previous House of Assembly, then these MOUs or MOAs are worth nothing. 
If the present House of Assembly votes to repudiate any Memorandum or Agreement or any Memorandum of Understanding, not approved previously by the House of Assembly, then they are dust. 
So sayeth the soothsayer, Don.


  1. I agree that ExCo cannot bind the House of Assembly. It would thus seem that the duty concessions promised to these developers have not been legally granted. A motion to do so can be brought by the Leader of the Opposition, but it would be effectively up to Lord Hubert, who controls the majority vote in the House, whether to grant them. In view of his clearly expressed antipathy for these projects, their developers, those who promised them the concessions and the condition of the Treasury, he may not be inclined to be overly generous with the people's money.

    A severability clause provides that if a particular provision of an agreement is declared to be invalid by the courts, the validity of the remaining provisions will not be affected. If these agreements contained such a clause, then even if the duty concessions are found invalid, the remainder of the agreement remains in force.

    If the agreements did not include such a clause, I believe whoever drafted them are guilty of legal malpractice. Given the quality of legal competence that is unfortunately widespread on our island, this would not surprise me at all. We often pay extremely high charges for mediocre legal work. It is time our lawyers are held financially accountable for their own acts and omissions.

    The developers would likely plead legitimate expectation (known in the U.S. as detrimental reliance), which applies the principles of fairness and reasonableness to the situation where a person has an expectation in a public body retaining a long-standing practice or keeping a promise. We could be in court for many years.

  2. Seems pretty simple to me.
    Come on AUM tell all the developers they have no concessions if the same were not passed in the house of assembly.
    Pay all monies which should have been paid or get out and forfiet al of your properties this applies to all developers foriegn or local.
    Don't pussyfoot around we need the monies in our treasury.

  3. So, Don, you're saying that the United Front was just shining the developers on, knowing full well that any deals they made were actually *illegal*?

    I come from Boston, and we have some *real* hacks there, ( http://www.amazon.com/Brothers-Bulger-Terrorized-Corrupted-Quarter/dp/0446576514 ), and if the above is true, I now stand in awe of Angillian politicians in general, and the United Front in particular.

    This is *Chicago*-level duplicity.

    There's a saying about the Massachusetts State House that Howie Carr likes to use: "Nothing is on the level. Everything is a deal. No deal is too small."

    Apparently, the Massachusetts State House could learn a thing or two from the Anguilla House of Assembly.

  4. Perhaps I gave the wrong impression that the House of Assembly was somehow to blame for this fiasco. It is not a fault of the Anguilla House of Assembly if the Minister of Finance fails to take the necessary Resolution under the Customs Act to the House. The members of the House have no control over the Minister of Finance. The Constitution even prohibits them from moving such a Resolution. By law, only the Minister can move it.

    I do not know how things are done today. In my day, I was paid, and paid very handsomely, to keep the pressure on the Minister of Finance until he had accomplished the passing of the promised Resolution through the House. It was my job to telephone the Financial Secretary, Frankie Connor, and the Chief Minister, Emile Gumbs, weekly at least, to find out how the Resolution for the House was coming along.

    As I recall, developers did not even start investing their money until all the preconditions had been met. Of course, if a developer decides to take a gamble and to start investing hundreds of millions before the most elementary pre-conditions for the commencement of development have been met . . .

  5. What legitimate expectation?

    When the government of Anguilla negotiates a Memorandum of Understanding or a Memorandum of Agreement with a developer, this agreement is NOT BINDING UNLESS AND UNTIL IT HAS BEEN APPROVED IN THE HOUSE OF ASSEMBLY AS REQUIRED BY LAW.

    How can someone ignore or break the law and then have a legitimate expectation?

    The law is clear. Any other interpretation by the court would be to encourage corruption.

    Furthermore, ignorance the law is no excuse, and if any developers come to Anguilla and believe that they can make secret deals with their friends in and around government and then plead ignorance and expectation, they have another think coming.

    It was clearly an illegal act on behalf of the United Front Party, clearly a party decision of which the people of Anguilla did not even have knowledge. It was never discussed in the House of Assembly, nor put to the vote even though the United Front had sufficient votes for the "ayes" to have it.

    It was all secret deals known only to the United Front Party, the British appointed civil servants and the developer.

    That is the risk you take, IF you make deals with your friends in government and do not follow proper procedure.

  6. To "Anonymous" #1; You are correct. Whomsoever drafted those MOA'S are severely lacking. Suprise!, and not intending to "..suprise [you] at all..", they were drafted by American Lawyers, not by "..the quality of legal competence unfortunately widespread on 'our' island"

    We have come across numerous examples of "..the quality of legal competence unfortunately widespread on.." YOUR United States of America with respect to the Agreements which were drafted by YOUR American Lawyers and approved by YOUR American Lawyers, all of whom are by far more expensive than any on OUR, not YOUR, island.

    The very "competence" which is widespread from Los Angeles to New York created the MOAS and the Purchase and Sale Agreements certainly need your attention. Just ask any of the purchasers from the two main projects on Anguilla.

    You postulate the concept of "Legitimate Expectation" clearly vacuous of the Law. "Anonymous" #3 have dealt with your error already.

    Severability does not apply, as you would certainly know if you had any "competence".

    As Mr. Mitchell correctly points out, the MOAS do not have any Legal impact absent passage by the House of Assembly. They are not binding even on the very Government which signed them, much less successor Governments. They are in Law not even binding on a Minister who participated in their approval in Executive Council.

    Try to improve YOUR competence before you post garbage on the internet.

    Mr. Mitchell has all the fundamentals correct.

  7. Don, isn't the Finance Minister a *member* of the Anguilla House of Assembly by *definition*? Westminster, Magna Carta, and all that? The winning part(y/ies) become(s) the government and parcels out the ministerial jobs among themselves accordingly?

    Seems to me that to say that the Finance Minister does one thing on behalf of the government but not on behalf of the House of Assembly -- which they also control -- is a distinction without a difference.

    Anyway, in the case of the Front Government, knowing that they wouldn't publicly vote for something in the Assembly, and turning around to promise that same thing to foreign developers in the same breath is, again, magisterially duplicitous.

    It looks for all the world like the Front were *never* going to deliver on their promise to the developers on tax rebates and exemptions in the long run; that they were going to claw all that money back at some future date. I wonder further if they were going to spring a tax-trap and actually *expropriate* all those shiny projects on the beach for back customs duties?

    Again, I stand in awe of the sheer scale of the thing. A whole lot of sand for such a tiny island, that's for sure.

  8. Of course, I do not pretend to know what went through the minds of the Front Ministers. I can only imagine, based on over 60 years of experience what must have happened.

    I imagine what happened was that the developer came to the Minister. He proposed that, in exchange for a modest campaign contribution, he would get a customs exemption. The Minister was happy to agree. The lawyers were instructed to write it up. The parties signed the memorandum of agreement.

    None of them remembered the little provision in the Customs Act. That says that it is not valid to exempt someone from customs duty until the exemption is passed by a Resolution of the House of Assembly.

    It was probably as simple and as “innocent” as that. No conspiracy theory is necessary or called for.

  9. My impression, up until yesterday, had been that Don had been critical of the new Chief Minister in suggesting that the new government did not have to honor the MOUs and that these agreements could and should be renegotiated. I thought Don's position had been that that the existing and heavily criticized MOAs and/or MOUs were legally enforceable documents, and that failure to honor these agreements could be a potential disaster for Anguilla. I must have totally misunderstood Don's position, because that's not at all what he seems to be saying here.

    I don't know what stimulated Don to clarify his thoughts on the legal issues involved here, but I thank him. This discussion has been one of the most interesting and enlightening ones I've read here in a long time.

    This discussion should have occurred months ago before the election.

  10. In practice, does Anguilla customs let developers bring stuff in duty free if they have a MOU even though the House of Assembly has not yet passed a duty free resolution for that developer? Have the developers with MOUs not paid duty? Does somebody need to explain the law to customs?

  11. Customs officers know the law very well. It is the politicians who govern us who either do not know the law, or choose to ignore it.

    What do you do as a customs officer when you get a Memo from the Ministry of Finance stating, "Executive Council has decided at last Thursday's meeting that, with immediate effect, Grand Developer is granted duty free status. No goods on the attached list imported into Anguilla in the name of Grand Developer is to be charged with customs duty with immediate effect. Please govern yourselves accordingly."?

    You, as a customs officer, are expected to carry out the policy decisions of government. You expect that they, as knowledgeable men, will in due course do the right thing and present the necessary Resolution to the House of Assembly for passage. You sit there astounded as month after month, year after year, no Resolution is presented. In fact, the very Agreement which granted duty free concessions is hidden from the House of Assembly. It is only after some years that a member of the Opposition gets a leaked copy of the Agreement, and reads it aloud in the House of Assembly. And, the Ministers still fail to present the necessary Resolution.

    Tell me, what do you expect the customs officer to do?

  12. So while the law says that only the House of Assembly can grant duty free status, in practice customs gives duty free to whoever Ex-Co says to. So we don't really have rule of law. The claims that politicians can not grant duty free status in secret, only the House in public session can, are not actually how things work (just how they are supposed to). Not enough checks and balances to keep government following the law.

    Hubert should fire any customs people who did not follow the law. Maybe next time Ex-Co tries to tell customs what to do they will think twice. How can we redesign the system so people in government follow the laws?

  13. I job of the Ministers is to steer the country in the direction of long-term goals which are in the best interest of the country. THEN GET OUT OF THE WAY and let others implement the objectives. Not to micro-manage every aspect of the country from the top down….that is totalitarianism not a democracy. So it may be that forgiving the import duties in the long run is best for the country by getting a business to locate and begin to contribute to the economy. It is easy to Monday quarterback the decisions of the last administration and it is likely, as Don surmised, a simple oversight in the customs law is at hand. If so, a plan can be had to repay the overdue duties. No conspiracy or mob needed (no pun to the man from Boston or Chicago).

    However where, and IF, any official inserts himself into the mix for financial gain that must be dealt with swiftly and harshly….for that is not accidental. Until you can prove that to be the case, then you simply differ with the prior decisions and with the election the people have spoken that they desire a new direction. Now it is up to CM Hughes to Capitan the ship and plot a new course; you may not agree with his decisions, but he is the Capitan…..for now.

    What is needed is diversification of the economy because all the eggs are in the tourism basket. I tried to bring a business which will (1) diversify the economic base of the country (2) not utilize any of the islands infrastructure (3) provide money to the treasury with for just such shortages as your now experiencing (4) not harm the environment. But the prior administration, while very supportive and interested in the project, would not advance the project over the last 2 yrs. I will try one last time to see if CM Hughes will embrace this opportunity for Anguilla in the next month. I hope that realizing the wolf is now at the door will cause a focus on diversification and sensible interest in the project.

  14. If the developers would not have been granted concessions, they would have just gone to another island and invested hundreds of millions of dollars there instead.

    my guess is that any attempt by the government to try and change the terms of signed MOAs approved by ExCo would be a complete disaster and would be the end of any foreign investment in anguilla. if they go down this road, the government would at least be able to claim the destruction of TWO industries - tourism and off-shore banking. however, i am sure they could be replaced by other industries that could support our families. maybe salt mining and goat meat production.

  15. To Anonymous of March 16, 2010,8:01 AM
    and to Idmitch

    I love your conspiracy theories and both of them quite correctly illustrate the mind boggling devilishness which can arise because of BAD GOVERNANCE and LACK OF TRANSPARANCY.

    However, Anonymous of March 16, 2010, 7:14 is entirely correct.

    American and other lawyers seem to believe that all American law and British law apply to Anguilla. This is not true. A lawyer would have to be on the island long enough, practice enough, experienced and well researched enough to be really familiar with the exacting laws of Anguilla, especially when it comes to protection of land rights, and strict laws which required approval of the House of Assembly in relation to duties and imposing taxation on the people and exemption from taxation.

    Anguilla has good laws designed to ensure good governance, and to prevent corruption but it is THE BRITISH who are responsible for GOOD GOVERNANCE, and the BRITISH by the appointment of THE ATTORNEY GENERAL prevents GOOD GOVERNANCE and promoted BAD GOVERNANCE, which can foster corruption.

    Where was the Attorney General when all THIS was happening in Anguilla?
    Where was the Attorney General when all THAT was happening in the Turks and Caicos Islands?

    That is why the new government has hired INDEPENDENT LEGAL COUNSEL and also depends on the advice of experienced and well informed (NON AMERICAN) lawyers.

    The new Chief Minister, Hubert Hughes, said on radio a few days ago, that the Governor told him that the only legal adviser to the Government is the British appointed Attorney General and apparently objected to him having independent legal counsel!

    Hughes is an old fox, a nationalist, familiar with the half truths that the British officials tell us “natives” in the colonies. The truth is that the Attorney General is the PRINCIPAL legal adviser to the government, but not the ONLY adviser to the government.

    Hubert Hughes did the right thing, ignored the Governor and appointed a qualified independent Anguillian legal adviser.

    The laws of Anguilla, invites openness and transparency and are designed to prevent corruption, requiring the approval of the House of Assembly for duty free exemption or any matter related to taxation. Our problem is the British need for “official secrets”, with the BRITISH GOVERNOR having the power to sign away land to foreign developers in secret deals. Yes, it is the British Governor and ONLY THE BRITISH GOVERNOR who can sign away “government land” in Anguilla.

    Both of you are concentrating too much on the obvious (corruption by Ministers), and missing the less obvious, but more harmful and sinister (squandering of scarce national resources and impoverishment of the Nation by alienation of the means of acquiring wealth).

    Now that is a real conspiracy!

    Signed: ANGUILLIAN
    (NO.1 Conspiracy Theorist)

  16. Anonymous of March 18, makes the point of March 17, @ 10:21AM perfectly and he was right, developers take concessions into consideration when deciding on where to make an investment. To look back now and complain over the deal it took to get them here is foolish and just silly. Had no concessions been made the cost of dutys would have raised the cost to build the project. What if St Martin had an alternate site, w/o dutys the cost to build would be less, then any smart businessman would have to consider that. The larger question is, were the assumptions on the value the project would bring to the island reasonably accurate? Legality of the ability to waive dutys aside, had the Viceroy sold the units it was supposed to (before the market retracted) and the revenues from such sale found their way to the Treasury and all other deals panned out….would you still think it a bad concession to waive duty fees?

    The fact is business has identifiable risks and unidentifiable risks. To horse whip decisions of another with the benefit of hind-sight is unfair, just as second guessing your decisions would be.


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