-Bar Association welcomes decision

TWO years after the Mayor and City Council (M&CC) introduced a 0.5 per cent increase in the cost for a certificate of compliance, High Court Judge Gino Persaud, on Tuesday, said that the council acted unlawfully as it had no statutory power to raise the fee.

Justice Persaud, who sits at the Demerara High Court, ruled in favour of a judicial review application filed by the Guyana Bar Association (GBA) against the Town Clerk of Georgetown.

The application stemmed from a public notice filed by the Town Clerk on June 20, 2019, to inform the public that the cost for the compliance certificate was being increased by 0.5 per cent of the current market valuation of properties.

A certificate of compliance is required by law under Chapter 5:01of the Deeds Registry Act, to certify that the payment of rates and taxes for a subject property is up to date and not in arrears.

However, according to the GBA, the requirement for the certificate was aimed at ensuring tax compliance and was not in itself intended to be a revenue earner as the M&CC had appeared to be doing.

M&CC’s decision resulted in the cost being increased from a flat fee of $10,000 to hundreds of thousands of dollars depending on the valuation of the property.

Aggrieved, the GBA wrote to the Town Clerk on two occasions requesting reasons for their decision, but was ignored. Subsequently, the GBA moved to the court and filed the public interest litigation to challenge the M&CC’s decision.

The GBA had prayed for several orders from the court including an order of certiorari quashing the decision to raise the fee for the certificate. The association had also asked the court to grant a declaration that the M&CC’s decision was unauthorised and outside of their jurisdiction.

The M&CC, in its defence to the court, said that the decision was a “policing” one to prevent fraud in applications for declarations of title by ascertaining that the persons to whom certificates of compliance are issued have a legal interest in the property.

The council also contended that its power to request the submission of personal documents is an implied or ancillary power or discretion flowing from sections 16A of the Deeds Registry Act and that courts are not to substitute their views on how much discretion is exercised.

In arriving at his decision, Justice Persaud said that in 2019, the M&CC instituted a “double levy” on the ratepayer which coincidentally was also a fixed percentage on the value of the property.

“Such verification by issuing a piece of paper in writing (certificate of compliance) is purely a ministerial function and cannot cost 0.5 per cent of the value of the property to be transferred,” he said.

According to the judge, the M&CC is expressly empowered to raise revenue to carry out its statutory mandate and its fiscal provisions guide its income, expenditure, and financial reporting in the interest of accountability. It is also expected to manage its financial affairs so as to break even.

Justice Persaud went on to state that the M&CC is not empowered to raise additional revenue by increasing the cost for the issuance of a certificate of compliance which is exactly what it was doing to the ratepayers.

“It is also an established principle that a local authority owes a fiduciary duty analogous to that of a trustee to ratepayers to have regard to their interests…Its duty in this regard is not to overcharge ratepayers. Fees for the provision of administrative services must be reasonable and not exploitative,” the judge said in his ruling.

He also found that the M&CC undoubtedly breached their fiduciary duty owed to ratepayers with the double levy in a single year when a property is intended to be transferred.

“There is no doubt in my mind that the increased fee is a heavy penalty. It is a penal blow to ratepayers. It is a double burden on the ratepayer who has to pay off all outstanding rates and taxes before transferring his property and then pay an increased fee to obtain a certificate of compliance based on a fixed percentage of the current market value of the property. This is undoubtedly a serious financial injury to the ratepayer,” the judge said.

The M&CC did not present evidence in their affidavit to show when the impugned decision was made for the increase or by whom.

This, the judge said, made it difficult not to conclude that the purpose of the increased cost was to raise revenue and this is “ultra vires” since they did not have that power to raise revenue in such an“arbitrary” and “capricious” manner.

“In the premises, I have no reservations in holding that the decision of the M&CC went beyond their statutory powers and is in excess of jurisdiction and null and void. The decision of the M&CC published by way of notice on June, 20, 2019, was ultra vires the Act and lacked any statutory legitimacy. It cannot be allowed to stand and must be quashed,” the judge ruled.

He later declared that the decision was null and void and awarded $150,000 in cost to the GBA. Attorney-at-law Kamal Ramkarran represented the GBA, while Roysdale Forde, S.C., represented the M&CC.

This ruling is similar to one that was recently delivered by High Court Judge, Navindra Singh, in the case Gerald Bhoodram et al v Town Clerk of Georgetown.This case was filed after the GBA matter.

In that case, the judge had also quashed the decision of the M&CC to impose the aforesaid fee of 0.5 per cent and ordered the return of the fee from July 8, 2015.

The GBA, in a press release issued on Wednesday, said that it welcomes the decision of the court as it grants much relief to the property owners in the city of Georgetown who have had to suffer staggering costs and an unnecessary and complicated process, which resulted in hardship and financial loss.