The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government is denying that an ex-Cabinet Minister and businessman were acting as its “agents or servants” over the $600-$65 million waste-to-energy project at the centre of the Renward Wells Letter of Intent (LOI) controversy.

The Attorney General’s Office, in its draft defence to Stellar Energy’s $727.364 million damages claim, refuted the group’s allegation that Algernon Allen and Frank Forbes, the businessman/accountant heading Sigma Holdings, were acting as “facilitators” for the project on the Government’s behalf.

“The actions and direct involvement of the fourth and fifth defendants [Mr Allen and his law firm, and Mr Forbes and Sigma] were not agents and/or servants of the Government of the Bahamas,” the defence, entered on behalf of the Attorney General and Ministry of Works and Urban Development, said.

This directly contradicts Stellar’s ‘statement of claim’, which described Messrs Allen and Forbes as “belonging to the very inner circle of Prime Minister Perry Gladstone Christie”.

The waste-to-energy group’s lawsuit effectively alleges that Mr Allen and Mr Forbes were trading on their relationship with the Prime Minister and access to him, holding out their involvement as Stellar’s legal adviser and honorary chairman, respectively, as key to the project’s approval.

“The fourth and fifth defendants used certain expressions like: ‘We hold the keys to the kingdom’,” Stellar’s ‘statement of claim’ alleged of Messrs Allen and Forbes.

It described them as “two of the private individuals who claimed to be representatives of the Bahamas government, and/or agents acting for and on behalf of the Bahamas Government”.

Mr Allen, too, in a recent interview with Tribune Business dismissed Stellar’s claims against himself and his law firm, although he declined to go into specifics. He added that he had instructed an attorney to represent him in the matter, who Tribune Business understands is former minister of state for legal affairs, Damian Gomez QC.

Elsewhere, the Government made Mr Wells, the former parliamentary secretary in the Ministry of Works, the scapegoat for the LOI controversy by accusing him of signing the document “ultra vires” or illegally.

“The second and third defendants [Ministry of Works and the Attorney General] will say that [Mr Wells] had no authority, nor was he authorised by the Government of the Bahamas, to execute the purported LOI, dated July 4, 2014, for and on behalf of the Ministry of Works and Urban Development,” the Government’s defence said.

“Further, the second and third defendants will contend that any approval relative to the waste-to-energy plant was subject to final Cabinet approval, which is a policy decision.”

The Government also reiterated its position that Stellar’s LOI was non-binding, and that it had never agreed to the terms and conditions it set out.

As for the group’s claim that the LOI had been “breached or frustrated”, and that neither party had consented to its termination, the Government alleged that the document “was repudiated at earliest July 14, 2014, when the Deputy Prime Minister and Minister of Works publicly rejected the purported LOI and denied that [Mr Wells] was given authority to execute it”.

The Government alleged that Stellar knew within 10 days that it would not honour the LOI, and that it further rammed home this point in a March 10, 2015, letter sent to its chief executive, Dr Fabrizio Zanaboni.

The letter, signed by Ministry of Works permanent secretary, Colin Higgs, said the ministry was “not the primary government agency to consider any waste-to-energy proposals that proposed to utilise waste from landfill sites in the Bahamas.

“Further, the operation and management of landfill sites falls within the portfolio of the Ministry of the Environment and Housing, and Stellar may wish to pursue their project with that Ministry in the first instance.”

Given that Stellar filed its legal action some 17 months after that letter was dispatched, the Government is arguing that the action is time-barred, given that legal claims against public officials executing their duties have to be filed within 12 months of the actions complained of.

Mr Higgs, in an affidavit filed with the Supreme Court yesterday, emphasised how little authority Mr Wells had at the Ministry of Works during his two-year tenure.

“Mr Wells was assigned oversight of the maintenance of roadside verges, public parks and the Urban Renewal Small Homes Repair programme,” Mr Higgs alleged.

“He was not authorised to give directions to the permanent secretary, and he was not authorised to enter into any agreement on behalf of the Ministry of Works and Urban Development or the Deputy Prime Minister.”

Mr Higgs said the National Energy Task Force, which Mr Wells co-chaired, reviewed 11 waste-to-energy proposals and short-listed two, neither of which was Stellar.

“To the best of my information, knowledge and belief, the recommendations emanating from the Task Force’s report were not pursued or acted upon,” the permanent secretary added.

Mr Higgs alleged that the first he knew of the Stellar LOI was from the media on July 11, 2014, a week after its signing. He was then presented with an unsigned copy by Mr Davis on July 21.

Mr Higgs said the Deputy Prime Minister “never executed or considered” either of the two LOI versions, the first of which was dated June 30, 2014, and had his name affixed to it.

Nor did Mr Davis instruct Mr Wells to sign the July 4 version, Mr Higgs alleged, and no Cabinet paper was prepared on whether Stellar should be considered for National Economic Council (NEC) approval.

Apart from arguing that Stellar’s claim is time-barred, the Government is also seeking to have it struck out by the Supreme Court. And it is arguing that the $727.364 million default judgment in the group’s favour was entered “irregularly”, and should be overturned.

Stellar is seeking damages against Mr Wells, the Government, Mr Allen and his law firm, and Mr Forbes and his Sigma Holdings entity, the latter duo having acted as ‘advisers’ to the project.

The group is also seeking declarations that the Government both “honour” the LOI contract and not award a waste-to-energy contract to any other company until damages are paid, on the grounds that it was the victim of fraudulent and/or negligent misrepresentation.

Stellar is alleging that because there was “no mutual consent” between itself and the Government “to terminate and release” the other from their obligations, the LOI remains in effect.

The Government, not surprisingly, is denying all these allegations.