Justice Aboud rules in EMBD corruption case

AT LEAST five contractors will have to explain “at the appropriate time” the “unusual patterns, oddities and inconsistencies” in ten contracts with the Estate Management Business Development Company (EMBD) for road rehabilitation works in 2015.

On Thursday, Justice James Aboud dismissed the preliminary applications of the five contractors – TN Ramnauth, NAMALCO, Kallco, Motilal Ramhit and Company and Fides – which sought to have the EMBD properly particularise the facts against them so that they could fairly mount their defence, or strike out the claims against them.

Aboud found that the allegations were “sufficiently pleaded.” His ruling means that the multi-million-dollar claim can proceed to trial.

The judge took almost three hours to read out a summary of his decision, which was delivered by remote hearing.

He held there was compelling evidence of collusion from what was pleaded by the EMBD in its 1,556- plus-page statement of case.

Aboud said the contractors “ought to fully understand” the allegations to allow them to plead their defences.

“I cannot see how they cannot,” he said.

“Someone has to explain at the appropriate time how these unusual patterns, oddities and inconsistencies can exist other than by means of collusion by contractors.”

Aboud is presiding over the EMBD’s lawsuit against former housing minister Dr Roodal Moonilal, as well as a consolidated case in which three companies have sued the state-owned EMBD over unpaid contracts for the upgrade and rehabilitation of certain Caroni access roads and two contracts for rehabilitation works.

In an EMBD counter suit, the state entity is seeking repayment of sums paid to the contractors, which were identified as TN Ramnauth and Co; Kallco Ltd; Mootilal Ramhit and Sons; and Fides Ltd.

The EMBD’s claim against Moonilal also includes former EMBD chief executive Gary Parmassar; former divisional manager at EMBD Madhoo Balroop; Andrew Walker; and companies Fides Ltd; Namalco Construction; and LCB Contractors.

Moonilal and the others were accused of engaging in an elaborate scheme of bid-rigging, bribery and collusion which led to hundreds of millions of dollars being disbursed to five contractors just before the 2015 general election.

They are accused of participating in the cartel arrangement by colluding between themselves to ensure that specific companies, by a wrongful and unlawful agreement, were awarded specific contracts at inflated amounts and received payments that were not due.

The complex fraud scheme was described as a “cartel arrangement” in an unlawful scheme conspiracy.

In their applications, they argued that the EMBD could not simply allege collusion and it would be wrong for the court to rule that collusive bidding vitiated the contracts as a matter of public policy.

They argued that the companies would have to have known about the alleged breaches of fiduciary duty for the contracts to be voided for public policy.

Aboud acknowledged that the unlawful conspiracy tort (a wrongful act that amounts to a civil wrong) was still in its developmental stages jurisprudentially, and pointed out that this stage he was ruling on inferential evidence, since defences have not been filed in the matter.

“Conspiracy is not a tort with many smoking guns, with fingerprints. It is an uncommon tort and all of these will converge at trial for the court to assess the sufficiency of the pleadings,” he said.

He also examined the pleadings of the EMBD, which included text messages between people identified as key players in the “cartel arrangement.”

He said in matters where alleged fraud is to be drawn by inference the issue of “particulars” becomes ticklish and considerable latitude should be given to allow the process to take place.

Aboud said he was prepared to give the EMBD “some latitude” and pointed out that since the matter had not yet reached the case management stage, there was sufficient time for the state agency to amend its claim against the defendants and include further evidence.

“I am ruling on inferential evidence, not evidence to be led at trial,” he said, as he pointed out that defences had not yet been filed in the EMBD claims, so it would be premature for him to rule on their application to set aside the claim.

He said some of the contractors “may know some of the wrong and some may know of all” and therefore, answers must be given.

He also said the best forum for the “clash of expert opinions” on several aspects of the claim as it related to pricing, bills of quantities, pre-tender estimates and other issues, was “best for trial not at this stage.”

Aboud also held that the EMBD claim of bribery and fraud against the former minister and the EMBD’s executives, Parmassar and Ramnauth “certainly has something to answer for.

“Mr Parmassar, I think, will have a lot to a lot to answer for at trial. I think the case against Mr Parmassar is the strongest among all of the cases,” he said.

The parties have seven days to appeal, but August 21 has been set for a hearing to deal with the applications for the extension of time to file defences.

Appearing for four of the contractors – TN Ramnauth, Kallco, Motilal Ramhit and Fides – were Senior Counsel Ramesh Lawrence Maharaj, Jagdeo Singh, Kiel Taklalsingh and Jamie Maharaj.

Senior Counsel Anand Ramlogan, and attorneys Alvin Pariagsingh and Ganesh Saroop represented Moonilal. Attorney Dexter Bailey represented Parmassar, while Lynette Maharaj represented LCB Contractors. Attorney Jayanti Lutchmedial represented surveyor Andrew Walker and Roger Kawalsingh and Javid Mohammed represented NAMALCO.

The EMBD was represented by Queen’s Counsel David Phillips, Jason Mootoo, Savitri Sookraj-Beharry and Tamara Toolsie.