The Judicial Committee of the Privy Council Decisions

Privy Council Appeal No. 9 of 1995

 

(1) The Right Honourable Sir William Randolph Douglas

Edwin P. Minnis

Gerald Montes de Oca and

(2) The Attorney General Appellants

v.

The Right Honourable Sir Lynden Oscar Pindling Respondent

 

FROM

 

THE COURT OF APPEAL OF THE COMMONWEALTH

OF THE BAHAMAS

 

---------------

JUDGMENT OF THE LORDS OF THE JUDICIAL

COMMITTEE OF THE PRIVY COUNCIL,

Delivered the 13th May 1996

------------------

 

Present at the hearing:-

Lord Keith of Kinkel

Lord Jauncey of Tullichettle

Lord Browne-Wilkinson

Lord Nicholls of Birkenhead

Sir John May

  ·[Delivered by Lord Keith of Kinkel]

 

-------------------------

The first appellants are the members of a Commission of Inquiry appointed by the Governor-General of The Bahamas under letters patent dated 30th December 1992 and 11th February 1993.  The second appellant is the Attorney-General of The Bahamas.

 

1. The letters patent required the Commission to make a diligent and full inquiry into the methods employed in the conduct and operation of certain corporations, including the Hotel Corporation of The Bahamas, with specific reference to various matters set out, of which the following are relevant for present purposes:-

"(a)the expenditure of public funds allocated to or received by them;

(b)the awarding of contracts by them;

(c)in relation to the Hotel Corporation of The Bahamas, the acquisition, repair, construction, renovation, refurbishment and operation of its various properties, including in particular (but not limited to) the Holiday Inn and the Lucayan Beach Hotels in Grand Bahama, the Ambassador Beach, Cable Beach and Balmoral Beach Hotels in New Providence, the Emerald Palms by the Sea Hotel in Driggs Hill, Andros, the Andros Town Yacht Club and Marina in Fresh Creek, Andros and the Winding Bay Beach Resort in Eleuthera;

...

 

(f)their procurement policies and practices;

 

(g)their employment practices including but not restricted to the employment and dismissal of staff;

 

(h)any and all allegations of fraud, corruption, breach of trust, conflict of interest or any wrongdoing whatsoever made by anyone against any person whatsoever arising out of and in connection with any or all of the affairs of ... the Hotel Corporation of The Bahamas ...

 

(i)the examination of all banking arrangements entered into by them, and their financial activities generally, and more specifically the management, care and conduct of their financial affairs;

 

(j)the examination, analysis and consideration of their practices, procedures, policies, systems and mechanisms, financial and otherwise, with a view to making such recommendations as may be considered appropriate in respect of any abuses or wrongdoings, or that would prevent any future abuse and wrongdoing and ensure the proper functioning and administration of the aforenamed public entities."

 

2. The letters patent granted to the Commission all the powers conferred on Commissioners by the Commissions of Inquiry Act cap. 172.  Section 10(1) of that Act, so far as relevant, provides:-

"Subject to the provisions of this Act, any commissioner shall have the powers of a justice of the Supreme Court to -

 

(a)summon and compel the attendance of witnesses;

 

(b)call for the production of documents or things including the power to retain and examine the same;

 

(c)examine persons appearing before them on oath;"

 

3. Subsection (3) of section 10 provides:-

"For the purpose of the exercise by a commissioner of any of the powers mentioned in subsection (1) references to a justice of the Supreme Court in any other law applicable thereto shall, subject to this Act, have effect as including such a commissioner save that, where any such power is exercised in respect to the summoning of any person to give or produce evidence as to any banker's book within the meaning of the Bankers' Books Evidence Act, such summons shall only be issued by the president of the commission."

The respondent was head of the Government of The Bahamas from 16th January 1967 to 21st August 1992, first as Premier and then as Prime Minister.  From 1st January 1975 until 24th January 1984 and again from 27th June 1987 until 1st October 1990 he was chairman of the Hotel Corporation of The Bahamas, a corporation established by Act of Parliament.

 

4. After having heard evidence from a number of witnesses about the affairs of the Hotel Corporation, the Commission by letter dated 7th January 1994 made a request to the respondent for co-operation in giving access to all his bank accounts and other accounts over which he had control.  The reasons for the request were stated to be:-

"(1)To determine whether or not there is any evidence to support or dispel any suspicion that you have benefited in any way out of the sale/purchase of the Emerald Palms by the Sea Hotel.

(2)To determine whether or not there is any evidence to support or dispel rumours that you have received payments in connection with the awarding of contracts by the Hotel Corporation of The Bahamas."

The respondent replied by letter dated 10th January 1994 stating that such information as the Commission had was speculation and no more than suspicion or rumours propagated for political reasons.  Counsel to the Commission then wrote to the respondent on 19th January 1994 setting out as grounds for suspicion that the respondent might have benefited from the purchase or sale of the Emerald Palms by the Sea Hotel, certain matters relating to the purchase of the Hotel by a Mr. Benjamin Forbes and the subsequent sale of it by him to the Hotel Corporation.

 

5. On 15th March 1994 the President of the Commission, Sir William Randolph Douglas, issued to the manager of the Bank of Nova Scotia in Nassau and to the respondent a summons requiring production of all the banking records of the respondent

from 1st January 1976 to 31st December 1993.  A similar summons was issued to the manager of Barclays Bank in Nassau on 31st March 1994.

The respondent then filed an originating summons seeking various forms of relief including (1) a declaration that the summonses to the banks were ultra vires of the Commission, (2) a declaration that the issuance of these summonses contravened the respondent's constitutional rights and (3) an injunction restraining the Commission from compelling the attendance of any officer of the banks or the respondent himself before the inquiry for the purpose of providing information about the respondent's bank accounts.

On 18th May 1994 Strachan J. gave judgment dismissing the respondent's action.  The respondent appealed, and by order dated 15th July 1994 the Court of Appeal of The Bahamas (Melville P., Campbell J.A. and Worrell J.A. Ag.) allowed the appeal.  The order quashed the summonses issued by the Commission to the bank managers and to the respondent, granted an injunction against the Commission compelling the attendance before it of any officer of the banks or of the respondent for the purpose of giving information about the respondent's bank accounts, and required the Commission to return to the Bank of Nova Scotia certain banking records which, as it happened, the Commission had already obtained.  The reasons for the Court of Appeal's order were not made available until 21st October 1994.  In the meantime the appellants, within 21 days of the date of the order, as required by section 3 of The Bahamas Islands (Procedure in Appeals to the Privy Council) Order 1964 (S.I. 1964/2042) ("the 1964 Order"), applied to Gonsalves-Sabola C.J. as a single judge of the Court of Appeal for leave to appeal to Her Majesty in Council, and he granted conditional leave on the usual terms on 11th August 1994.  The Chief Justice granted final leave on 23rd November 1994.  The reasons for the decision of the Court of Appeal, when delivered on 21st October 1994, revealed that the respondent's appeal had failed so far as the claim for constitutional relief was concerned but had succeeded as regards the application of the Bankers' Books Evidence Act.

In the circumstances Dr. Barnett, for the respondent, argued as a preliminary point before the Board that the conditional leave to appeal granted to the appellants by the single judge of the Court of Appeal was invalid, since no appeal as of right was available to them.

The relevant enactments are these:-

Article 28(1) of the Constitution of The Bahamas.

"If any person alleges that any of the provisions of Articles 16 to 27 (inclusive) of this Constitution has been, is being or is

likely to be contravened in relation to him then, without prejudice to any other action with respect to the same matter which is lawfully available, that person may apply to the Supreme Court for redress."

 

Article 104 of the Constitution.

" (1) An appeal to the Court of Appeal shall lie as of right from final decisions of the Supreme Court given in exercise of the jurisdiction conferred on the Supreme Court by Article 28 of this Constitution (which relates to the enforcement of fundamental rights and freedoms).

 

  (2) An appeal shall lie as of right to the Judicial Committee of Her Majesty's Privy Council or to such other court as may be prescribed by Parliament under Article 105(3) of this Constitution from any decision given by the Court of Appeal in any such case."

 

Section 19 of the Court of Appeal Act cap. 40.

" (1) An appeal shall lie to Her Majesty in Council from any judgment or order of the court upon appeal from the Supreme Court in a civil action in which the amount sought to be recovered by any party or the value of the property in dispute is of the amount of four thousand dollars or upwards, and with the leave of the court but subject nevertheless to such restrictions, limitations and conditions as may be prescribed in relation thereto by Her Majesty in Council, in any other proceedings on the Common Law, Equity, Admiralty or Divorce and Matrimonial sides of the jurisdiction of the Supreme Court.

 

  (2) Save as is provided in this section the decision of the court in any civil proceedings brought before it on appeal shall be final.

 

  (3) Nothing in this section contained shall be deemed to restrict or derogate from the right of Her Majesty in Council in any case to grant special leave to appeal from the decision of the court in any cause or matter."

 

6. Section 5 of the 1964 Order provides:-

"A single judge of the Court [of Appeal] shall have power and jurisdiction -

 

(a)to hear and determine any application to the Court for leave to appeal in any case where under any provision of law an appeal lies as of right from a decision of the Court ..."

 

7. Dr. Barnett argued that the case did not fall within Article 104(2) of the Constitution because, although the respondent's originating summons had sought relief under Article 28, the judgment of the Court of Appeal had refused such relief and granted it only on common law grounds.  There was no cross-appeal against the refusal of constitutional relief, and no constitutional point was involved in the appellants' appeal. That appeal could accordingly lie only under section 19(1) of the Court of Appeal Act, and since it did not involve a dispute about property of the value of $4,000 or upwards, or indeed any property, it could be brought only with the leave of the Court of Appeal. Thus section 5 of the 1964 Order did not apply, and the single judge had no jurisdiction to grant leave to appeal.

It appears that on 27th January 1995 the full Court of Appeal was moved by the appellants to vary or confirm the leave to appeal granted by the single judge but declined to interfere.

 

8. Sir Godfray Le Quesne Q.C., for the appellants, argued that Article 104(2) of the Constitution applied so as to give the appellants an appeal as of right to Her Majesty in Council because the case in which the Court of Appeal had given its decision was one in which a claim for relief under Article 28 of the Constitution had been made, and there had been an adjudication upon that claim under the jurisdiction conferred upon the court under that Article.

 

9. Their Lordships are of opinion that the true intendment of Article 104(2) is that an appeal as of right under it should lie only where the appeal would involve the determination of a constitutional issue under Article 28.  Otherwise the jurisdiction exercised would not be the Article 28 jurisdiction, but simply the ordinary jurisdiction of the Supreme Court.

 

10. However, Sir Godfray submitted that if his arguments on this point were unsuccessful the case was nevertheless a suitable one for the grant of special leave to appeal. Dr. Barnett did not object to this application being made without the presentation of a separate petition for special leave.  Their Lordships considered it appropriate that they should advise Her Majesty to grant special leave, since the case raises important issues regarding the right test to be applied by a Commission of Inquiry in deciding to issue a summons under the Bankers' Books Evidence Act, and the nature of the supervisory jurisdiction of the court over a decision to issue such a summons.  They proceeded to hear argument on the merits of the appeal on that basis.

 

11. It is convenient to start by setting out the relevant provisions of the Bankers' Books Evidence Act cap. 53, namely sections 3 to 7:-

" 3.  Subject to the provisions of this Act, a copy of any entry in a banker's book shall in all legal proceedings be received as prima facie evidence of such entry, and of the matters, transactions and accounts therein recorded.

 

  4.   A copy of an entry in a banker's book shall not be received in evidence under this Act unless it be first proved that the book was at the time of the making of the entry one of the ordinary books of the bank, and that the entry was made in the usual and ordinary course of business, and that the book is in the custody or control of the bank.

 

  Such proof may be given by a partner or officer of the bank, and may be given orally or by an affidavit sworn before any notary public or justice of the peace or person authorised to take affidavits.

 

5.  A copy of an entry in a banker's book shall not be received in evidence under this Act unless it be further proved that the copy has been examined with the original entry and is correct.

 

  Such proof shall be given by some person who has examined the copy with the original entry, and may be given either orally or by an affidavit sworn before any notary public or justice of the peace or person authorised to take affidavits.

 

6.  A banker or officer of a bank shall not, in any legal proceedings to which the bank is not a party, be compellable to produce any banker's book the contents of which can be proved under this Act, or to appear as a witness to prove the matters, transactions and accounts therein recorded, unless by order of a judge made for special cause.

 

7.  On the application of any party to a legal proceeding a court may order that such party be at liberty to inspect and take copies of any entries in a banker's book for any of the purposes of such proceedings.  An order under this section may be made either with or without summoning the bank or any other party, and shall be served on the bank three clear days before the same is to be obeyed, unless the court otherwise directs."

 

12. The judges of the Court of Appeal took the view that the effect of section 6 was that no evidence about the contents of a banker's books could be given otherwise than in pursuance of an order of a judge made for "special cause".   This was erroneous.

 

13. The purpose of sections 3, 4, 5 and 6 was to enable attested copies of entries in a banker's books to be made available in evidence without the necessity of the books themselves being produced in court together with an officer of the bank to speak to them.  In relation to the United Kingdom Bankers' Books Evidence Act 1879, which is in substantially identical terms to the Bahamian Act, Lindley M.R. said in Pollock v. Garle [1898] 1 Ch 1, 4:-

"The Bankers' Books Evidence Acts were passed for the obvious purpose of getting over a difficulty and hardship as to the production of bankers' books.  If such books contained anything which would be evidence for either of the parties, the banker or his clerk had to produce them at the trial under a subpoena duces tecum, which was an intolerable inconvenience to bankers when the books were in daily use.  The leading object of the Acts was to protect bankers from that inconvenience.  This is accompanied by the first six sections of the Act of 1879, which enable bankers to send attested copies of entries in their books instead of producing the books."

 

14. Since attested copies of entries in the books were by the Act made capable of being given in evidence it would be only in exceptional cases that the books themselves could be required to be produced in court, together with an officer of the bank to speak to them.  That is the significance of the reference to "special cause" in section 6. Section 7 enables a party to legal proceedings to obtain from the court an order allowing him to inspect entries in a banker's books and take copies for any of the purposes of the proceedings. That provision is not apt to cover the situation where a Commission of Inquiry desires to obtain access to entries in a banker's books, there being no legal proceedings to which anyone is a party. Yet section 10(3) of the Commissions of Inquiry Act is clearly designed to enable a Commission to obtain such access in appropriate cases.  The summons issued by the President in this case took the form of requiring the managers of the banks to attend before the Commission and produce the books for the specified period.  Having regard, however, to the terms of sections 3 to 6 of the Act, the summons is to be interpreted as requiring the sending of attested copies of entries in the books, as indicated by Lindley M.R. in the passage cited from Pollock v. Garle, and it seems that is what the Bank of Nova Scotia in fact did in this case.

 

15. Given that no hurdle in the shape of special cause requires to be surmounted, consideration falls to be given to the manner in which a Commission of Inquiry should direct itself in deciding whether or not to issue a summons giving it access to entries in a banker's books.  In their Lordships' opinion it is not helpful to approach  the  matter by  drawing  analogies with the rules which apply to discovery in contested civil litigation or with the approach adopted by the courts in connection with the production of bankers' books evidence in criminal trials. In contested civil litigation there are specific issues identified by the pleadings which require adjudication, and the relevance to these issues of bankers' book evidence may not be too difficult to determine.  The same is basically true of criminal trials where specific charges are the subject of investigation.  By contrast a Commission of Inquiry starts with no specific issues or charges.  It has only its terms of reference, which may be extremely wide, as they are in the present case.  Its function is inquisitorial, not adversarial.  It must pursue lines of inquiry and in doing so may find that other lines of inquiry appear to be requisite, including investigation into some individual's or company's bank account.  Bank accounts are subject to an obligation of confidence owed to the customer, and that confidence should not lightly be interfered with.  Dr. Barnett for the respondent relied strongly on the Banks and Trust Companies Regulation (Amendment) Act 1965. Section 10 of that Act (as substituted by section 2 of the Banks and Trust Companies (Amendment) Act 1980) forbids, under pain of penalties, the disclosure without the consent of the customer by any officer of a bank of information about the customer's banking affairs.  There is an exception where the disclosure is lawfully required by any court of competent jurisdiction. No doubt this Act was passed in the public interest, as tending to promote confidence in The Bahamas as an important financial centre.  But in their Lordships' opinion it does not have the effect of requiring any balance of competing public interests in a case where a court is considering whether to make an order for disclosure.  The confidentiality continues to be personal to the customer in the same way as if the Act had not been passed. The only balance which requires to be made is that between the public interest in the administration of justice or the promotion of the work of a Commission of Inquiry and the customer's personal interest. If the public interest appears on good grounds to require disclosure the customer's interest must give way.

 

In Commission of Inquiry v. Maynard and Others (unreported C.A. 1984 Nos. 6 and 7) the Commission had been appointed to inquire into the extent and methods employed in the illegal use of The Bahamas for the trans-shipment of drugs. The Commission had evidence from one Garcia, a self-confessed drug smuggler, that he had given a bribe to Senator Maynard to get himself removed from a stop list for entry into The Bahamas. The Commission issued a summons for production of Maynard's banking records over a long period.  The Chief Justice quashed the summons on the ground that, while it might have been valid if  confined  to  a  short period  before and after the date of the alleged bribe, it was invalid as covering too long a period.  The Court of Appeal allowed an appeal by the Commission.  The leading judgment was delivered by da Costa J.A.  He found assistance in Ross v. Costigan (1982) 41 A.L.R. 319, a decision of the Federal Court of Australia.  A Royal Commission had been appointed to inquire into certain conduct by members of a trade union.  The Commissioner proposed to investigate allegations of a conspiracy to breach certain provisions of the New South Wales Companies Act 1961, in the context of tax minimization schemes.  The applicants sought review of that proposal and the Commissioner's decision to summon and question certain witnesses in relation to it, upon the ground inter alia that the proposed decision was an improper exercise of the powers conferred on the Commission.  In this connection Ellicott J. considered whether the matter proposed to be investigated was relevant to the inquiry.  He said at pages 334-335:-

"In determining what is relevant to a Royal Commission inquiry, regard must be had to its investigatory character.  Where broad terms of reference are given to it, as in this case, the Commission is not determining issues between parties but conducting a thorough investigation into the subject matter.  It may have to follow leads.  It is not bound by rules of evidence.  There is no set order in which evidence must be adduced before it. The links in a chain of evidence will usually be dealt with separately.  Expecting to prove all the links in a suspected chain of events, the Commission or counsel assisting, may nevertheless fail to do so.  But if the Commission bona fide seeks to establish a relevant connection between certain facts and the subject matter of the inquiry, it should not be regarded as outside its terms of reference in doing so. This flows from the very nature of the inquiry being undertaken.

 

  In McGuinness v. Attorney-General (Vict) (63 CLR) at 86, Latham C.J. said:-

`The Royal Commissioner was appointed to inquire into a specified subject matter, namely, the suggested bribery of members of Parliament.  He was not appointed to determine an issue between the Crown and a party, or between other parties.  The Commission was appointed to conduct an investigation for the purpose of discovering whether there was any evidence of the suggested bribery. Such an investigation may be, and ought to be, a searching investigation - an inquisition as distinct from the determination of an issue.  In the course of such an inquiry it would or at least might be a valuable step forward if the identity of the persons giving  information  to the editor of the newspaper could

be discovered so that they could be summoned for the purpose of giving evidence on oath as to their knowledge, or as to the source of their information if they had no direct personal knowledge of the matters in question.'

 

16. This does not mean, of course, that a Commission can go off on a frolic of its own.

 

  However, I think a court if it has power to do so, should be very slow to restrain a Commission from pursuing a particular line of questioning and should not do so unless it is satisfied, in effect, that the Commission is going off on a frolic of its own.  If there is a real as distinct from a fanciful possibility that a line of questioning may provide information directly or even indirectly relevant to the matters which the Commission is required to investigate under its letters patent, such a line of questioning should, in my opinion, be treated as relevant to the inquiry."

 

17. The decision of Ellicott J. was affirmed by the General Division of the Federal Court: Ross v. Costigan (No. 2) (1982) 41 A.L.R. 337.  In dealing with an argument for the applicants that there was no evidence linking them with the trade union or any relevant illegality, the court said, at page 351:-

"This provides no reason why the Commissioner should not inquire further, and require further evidence from them, if he considers these courses desirable in the performance of his function.  We should add that `relevance' may not strictly be the appropriate term; what the Commissioner can look to is what he bona fide believes will assist him in his inquiry."

 

18. Having quoted certain extracts from these judgments da Costa J.A. in the Maynard case concluded (at page 40 of the transcript):-

"Unless it is shown that the Commission has gone off on a frolic of its own or is acting mala fide, certiorari ought not to go to the Commission."

 

19. Henry J.A. said at page 5 of the transcript:-

"The issue here is whether in requiring the production of the documents specified in the summonses the Commission exceeded its jurisdiction.  In this regard it is important to bear in mind the terms of reference of the Commission because in my view the Commission is entitled to issue such summonses and to require the production of such documents or evidence as might be reasonably expected to be relevant to the subject matter of the inquiry which it is required to undertake.  It cannot therefore arbitrarily require from a bank the production of all the accounts in that bank, nor can it arbitrarily require the production of a particular account.  If however, for example, the Commission has reason to believe that a particular account or the operator of a particular account directly or indirectly is involved in the illegal use of The Bahamas for the transshipment of dangerous drugs destined for the United States of America, the Commission would be entitled to require the production of that account by the bank, and certiorari would not in those circumstances lie against the Commission.  Because the Commission is an investigative body it must necessarily embark on what might be otherwise be regarded as `fishing'."

 

20. In their Lordships' opinion these passages correctly indicate the considerations which should guide a Commission of Inquiry in deciding on the issue of summonses for production of the banking records of an individual or a company. If there is material before the Commission which induces in the members of it a bona fide belief that such records may cast light on matters falling within the terms of reference, then it is the duty of the Commission to issue the summonses.  It is not necessary that the Commission should believe that the records will in fact have such a result.  The Commission can do no more than pursue lines of inquiry that appear promising. These lines may or may not in the end prove productive.

 

21. As regards the function of the court in the event that the Commission's decision to issue a summons is challenged, the matter is to be approached upon the traditional judicial review basis.  The applicable criteria are those set out in the judgment of Lord Greene M.R. in Associated Provincial Picture Houses Limited v. Wednesbury Corporation [1948] 1 KB 223.  In particular, the decision of the Commission should not be set aside unless it is such as no reasonable Commission, correctly directing itself in law, could properly arrive at.  It would appear that this is the test which Ellicott J. had in mind in Ross v. Costigan when he spoke of a Commission going off "on a frolic of its own".

 

22. In their Lordships' opinion the respondent has not established that this test is satisfied in the present case.  Prior to the issue of the summonses the Commission had before it a substantial body of evidence from various witnesses about certain aspects of the affairs of the Hotel Corporation of The Bahamas during the periods when the respondent was Chairman of the Corporation.  In October 1981 the Board of the Corporation had under consideration the awarding of contracts for the construction of the Cable Beach Casino.  Bids had previously been received from three contractors for certain works planned by the Board's architect.  The three contractors were E.R. Hanna/Stresscon, B & A/BAM and Blount/Cavalier.  The bids were all in the region of $16,000,000 to $18,000,000 which was considerably above the budgeted figure.  But at the same time Blount/Cavalier had made a proposal for the construction of more elaborate works at a cost of some $32,700,000.  The Board desired that the other two contractors should submit bids for the more elaborate works subject to minor exclusions, and they did so, E.R. Hanna/Stresscon in the sum of $30,247,442, and B & A/BAM in the sum of $31,088,066.  The Blount/Cavalier bid revised to take account of the exclusions came to $30,300,000. At its meeting on 14th October 1981 the Board considered the matter in some depth and eventually decided that the respondent should negotiate with Blount/Cavalier and report back to it. The respondent did not report back but on 16th December 1981 signed and sent to Blount/Cavalier a letter of intent for construction by it of various works for the Cable Beach Casino at the price of $33,425,000, and on 12th May 1982 the respondent on behalf of the Corporation executed a contract with Blount/Cavalier for the construction of the works at that price.  It does not seem that the respondent ever informed the Board of the Corporation of what he had done, though he attended a meeting of the Board on 13th May 1982.

 

23. A further matter related to transactions in connection with the Emerald Palms by the Sea Hotel and four adjoining cottages.  In February 1986 they were owned by a company called Crow Hill Development Company Limited, controlled by a Mr. Everette Bannister, a close friend of the respondent.  In that month the hotel was agreed to be purchased from Crow Hill by a Mr. Benjamin Forbes through a company called Ocean View Developers Limited.  The purchase was made on the advice of the respondent, who was not at the time Chairman of the Hotel Corporation of The Bahamas.  The purchase price was $550,000. Mr. Forbes financed this by a loan of $300,000 from the Bahamas Development Bank and one of $250,000 raised elsewhere.  There was evidence that the Development Bank was initially reluctant to grant the loan of $300,000 but eventually did so by reason of interest shown in the matter by the respondent, who as holding at the time the portfolio of Minister of Finance had responsibilities for the Bank.  Mr. Forbes' tenure of the hotel was not a success, an occupancy rate of no more than 10% being achieved.  In 1989, when the respondent was Chairman of the Hotel Corporation, the Corporation purchased the Emerald Palms Hotel from Mr. Forbes' company for $650,000.  There appear to be no minutes of the Board of the Hotel Corporation relating to the purchase.

 

24. After the purchase substantial renovation work on the Emerald Palms Hotel was carried out by a company called Bro-kell Construction Limited, controlled by a Mr. Kelly, the contract price being $1,600,000.  It does not appear that competitive tenders were invited.  About the same time Bro-kell Construction was also doing work on two of the four cottages which adjoined the Hotel, which were still owned by Mr. Bannister's company.  Cottage No. 1 was occupied by the manager of the Hotel and his wife. The Hotel Corporation paid Bro-kell Construction $26,760 for work on this cottage.  Cottage No. 2 was used by the respondent, upon terms which are not clear.  Bro-kell Construction, on the instructions of the respondent, carried out certain work on this cottage also, for which, according to Mr. Kelly, the respondent paid about $12,000. There was evidence from Mr. Hingston, an independent surveyor, suggesting that the value of the work may have been significantly more.  In December 1992, after the respondent had ceased to be Chairman of the Hotel Corporation, he purchased the four cottages from Mr. Bannister's company for the price of $50,000 through a company which he controlled called Dev-Pin Investments Limited.

 

25. Finally there was evidence before the Commission regarding the award of contracts worth many millions of dollars, though not all during the respondent's chairmanship of the Hotel Corporation, to a concern called Penn's Hotel Renovations Company.  In some instances contracts were awarded to that company when it was not necessarily the lowest bidder and in others when no bids had been invited.  The respondent was personally acquainted with Mr. Penn.

 

26. The foregoing represents only a brief summary of the relevant evidence which was before the Commission when it issued its summonses.  The totality of the evidence was very voluminous, and it was for the Commission which heard it to assess its veracity and reliability, or the reverse, and the inferences capable of being drawn from it.  The summary suffices to show that in connection with transactions involving very large sums of public money, in which the respondent played a prominent part, there were a number of unconventional features such as to raise doubts about the manner in which the affairs of the Hotel Corporation, under the respondent's aegis, were conducted.  The Commission was well justified in deciding that investigation into the respondent's banking records was desirable in order to promote its inquiry, with a view to ascertaining whether or not the respondent had received any benefits or favours in connection with the transactions in question.

 

 

 

27. For these reasons their Lordships will humbly advise Her Majesty that special leave to appeal should be granted, that the appeal should be allowed and that the order of Strachan J. should be restored.  The respondent must pay the appellants' costs before the Court of Appeal and their Lordships' Board.

 

 

 

© CROWN COPYRIGHT as at the date of judgment.