SPORTT vs BOARD DIRECTORS COURT MATTERReckless and incompetent – Attorney Kangaloo
Derek Achong
derek.achong@guardian.co.tt
“Reckless and incompetent” – these were the words used by Senior Counsel Colin Kangaloo to describe the actions of the former board members and executive officers of the Sports Company of T&T Limited (SporTT) in entering a failed $34 million contract related to the controversial Life Sport programme.
Kangaloo, who leads the legal team for the state company, made the comments while opening his client’s case against the group for breach of their fiduciary duty before Justice Ricky Rahim yesterday.
He said, “It can’t be that they acted reasonably and honestly. They acted recklessly, bordering on incompetence.”
Kangaloo claimed that correspondence from the Ministry of Sport in December 2012, which advised that eBeam Interact Limited had been chosen by sole select tender to administer the numeracy and literacy, and the interactive technology components of the occupational skills training aspect of the program, was “riddled with apparent errors.”.
Kangaloo said, “They all sat around and did nothing with the exception of board member Matthew Quamina.”
However, he claimed that Quamina’s intervention was not enough to absolve him of responsibility for the contract.
“The two questions he asked were not enough and could not excuse him from his statutory duties,” he said.
He further claimed that none of the directors saw the contract when it was eventually signed in July 2013 and eBeam was paid half of the value.
“Remarkably nobody asked questions about the contract like the deliverables or how they could be exposed,” Kangaloo said.
Kangaloo rejected the group’s claim that they only paid eBeam the balance on the contract after seeking legal advice in December 2013.
“They can’t be protected as if they exercised proper due diligence; they would have never entered into the contract in the first place,” Kangaloo said.
“We say they are negligent,” he added.
He also contended that the group members could not claim that they were acting on the instructions of the ministry as they entered into the contract on the company’s behalf.
“The commercial reality is that is not so,” he said.
During the hearing, attorney Jagdeo Singh, who is representing several members of the group, interrogated current SporTT corporate secretary Arlene George.
George admitted that before the case was filed under her tenure, she did not interview officials of the ministry who were assigned to the programme.
“I relied on the related documents,” she said.
Asked whether she checked if the ministry or the programme’s secretariat had additional documents related to the contract, George said no.
“I had no basis to believe SporTT did not have accurate records,” she said.
George admitted that the company did not pay for the contract with its annual subvention but rather through a $400 million loan facility that was eventually repaid.
Referring to the State Enterprise Performance Manual, Singh pointed out that the Ministry of Finance and Sport Ministry would have approved the contract.
George also accepted that under the company’s bye-laws it was required to take directions from both ministries in the public interest.
She also admitted that there was no evidence that the members of the group had a conflict of interest in the contract or benefitted financially from it.
The defendants in the case are former chief executive officer John Mollenthiel, Sebastian Paddington, Chela Lamsee-Ebanks, Reynold Bala, Norris Blanc, Nisa Dass, Anyl Gopeesingh, Sabrenah Khayyam, Cheemattee Martin, Quamina, Annan Ramnanansingh, Kent Samlal, Harnarine Seeram Singh, and Milton Siboo.
On August 22, High Court Judge Eleanor Donaldson-Honeywell rejected SporTT’s breach of contract case against eBeam but ordered it to pay $30 million in restitution as she ruled that it was unjustly enriched for services it did not provide.
While SporTT was seeking the entire value of the contract, Justice Donaldson-Honeywell deducted $4 million, which represented the nominal services inclusive of the procurement of equipment provided by eBeam.
“It would be legally unjust for the defendant to retain the benefit of $34 million when only the minimum value, unrelated to any substantial delivery of the bargained-for services, was received by the claimant under the contract,” Justice Donaldson-Honeywell said.
“The minimal services provided by the defendant did not meaningfully meet the benefit that was intended by the parties to be delivered to the claimant,” she added.
eBeam still has the option to appeal the outcome.
John Lee and Stephanie Moe are appearing alongside Kangaloo for SporTT.
The group’s lawyers include Fyard Hosein, SC, Anthony Vieira, SC, Rishi Dass, SC, Shiv Sharma, Karina Singh, Keston Lewis, Roger Kawalsingh, Ravi Mungalsingh, Tara Bhariosingh, Anil Maraj, Nicole de Verteuil-Milne, Adrian Ramoutar, Sushma Gopeesingh, Kamini Persaud-Maraj, Neil Bisnath, Lydia Mendonca, Richard Jagai, Andrea Bhagwandeen, and Dharmendra Punwassee.
The trial continues today.
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