THE Paul Chen Young episode of the post-FINSAC era’s economic meltdown is expected to return to the local courts shortly, after the United Kingdom Privy Council refused to intervene in a constitutional issue.

The main issue was, basically, whether the Government should be held responsible for legal fees arising from a lengthy appeal between March and November 2013 when the Jamaican Appeal Court (Panton P, Dukaharan JA and McIntosh JA) heard the appeal over 18 days against a judgement of the Supreme Court (Anderson J), which was handed down in May 2006.

The Court of Appeal reserved judgment in this case brought by Michael Paul Chen Young, son of the late financial business leader, Dr Paul Chen Young, and others (appellants) v Eagle Merchant Bank Jamaica Ltd and two other companies, insisting that the matter should be heard by the Supreme Court instead..

The main ground for the Jamaican Court of Appeal was that the application, should it be made to the Supreme Court, would likely involve a factual investigation into the circumstances of the delay, and the failure to obtain permission to continue to act, which the Court of Appeal would be ill-equipped to deal with.

The Privy Council said that it was not convinced that the outcome was likely to be dependent upon the resolution of the issues of fact, and a request to the attorney general to identify what those factual issues might be falling on “dry ground”.

The UK court noted that on December 1, 2017, more than four years after the hearing, the same judges of the Court of Appeal purported to hand down their judgment on the appeal, setting aside the Supreme Court’s judgment and ordering a retrial. But by then the Supreme Court’s judges who handled the case had all passed mandatory retirement ages specified in the Constitution of Jamaica. However, the Privy Council noted that they could have sought permission from the governor general to continue in office for the purpose of completing outstanding work.

The UK court said that, after careful deliberation by a differently constituted Court of Appeal held in April 2018, it was explained that the December 2017 judgment was therefore a nullity, and a rehearing of the appeal was directed.

“The appellants were understandably dismayed that the nullity of the December 2017 judgment meant that their costs in prosecuting their appeal at the lengthy and expensive hearing in 2013 had been thrown away. They sought from the Court of Appeal an order that their assessed costs should be paid by the State of Jamaica — in the person of the attorney general — either by way of a third-party costs order or by way of redress for a breach of their constitutional right to an effective and timely appeal.

“In its judgment declaring the December 2017 judgment void, the Court of Appeal held that the appellants’ grievance did not fall within the contemplation of the third-party costs jurisdiction, and that their claim for constitutional redress should be brought before the Supreme Court as a fresh claim,” the UK court added.

The court said that, nonetheless, there are other solid reasons why the application should be made, in the first instance, to the Supreme Court, even though the alleged contravention of the Charter of Rights occurred while the proceedings were pending in the Court of Appeal.

The UK court also noted that the application is a novel one, not covered by previous Jamaican authority, which may well give rise to important issues of responsibility and causation.

It said that there were also questions as to whether the State should be liable for an apparent judicial failure to obtain permission from the governor general to continue to act, what effect that may have upon judicial independence, and what causative role did the delay, following the 2013 appeal hearing, have in it ultimately becoming abortive, following judicial retirement.

The court said that these were important questions which may have repercussions in a wide variety of other cases in Jamaica.

The financial sector in Jamaica suffered a severe shock in the mid-1990s, largely due to the spread of a wide variety and number of financial institutions sinking under what was then described as the “1990s Meltdown”. The plague was attributed to various factors including high bank interest rates promulgated by the then Government, excessive spending by small and medium-sized businesses, and a meteoric rise in bad loans at financial institutions.

Dr Chen Young was among the first investors to suffer from the meltdown with his Eagle Group, which included a merchant bank and Crown Eagle Life Insurance. This followed his stint as the first general manager of the newly created Workers Bank. He eventually fled to the United States where he died in May 2020. Others affected by the incident included Donovan Crawford of Century National Bank.

FINSAC Limited was established by the Government in January 1997 with a mandate to restore stability to Jamaica’s financial institutions after the collapse of several major financial institutions. It is still unclear how much the economy literally lost during the period, however, experts have said that it added up to approximately $120 billion and about 40 per cent of its GDP. In 2017 Parliament informed the country that it had written off over $106 billion in debt.

A commission of enquiry into the meltdown, which was appointed in 2008, is still unable to table a report, while the Ministry of Finance says it is unable to deregister FINSAC until the various lawsuits have been addressed.