The Water and Sewerage Authority (WASA) has lost in its bid to delay the payment of an over $140 million debt to a security company.
Delivering a decision, earlier this week, Appellate Judge Mark Mohammed dismissed an application by the State-owned utility for a stay of a judgement over the debt, obtained by T&T Security Services Limited.
In his decision, Mohammed ruled that there were no special circumstances to warrant the stay pending the determination of an appeal against the judgement that was delivered in 2019.
In its evidence attached to the claim, WASA claimed that it would be left in financial ruin if the private security company was allowed to collect the judgement debt.
WASA provided its financial records, which it said showed that it was cash strapped and operating with significant losses. Its monthly operating losses for November 2019 was $162.7 million and it had an accumulating loss/deficit of over $3 billion.
WASA said that there was no realistic prospect of it being capable of clearing the debt as it was heavily dependent on its collection of rates and charges, government subventions, and an already exhausted overdraft facility.
It claimed that if it were forced to pay, it would need a bailout from the Government, which it said would only be possible through a loan.
“This would have a nationwide effect, including a decline in the country’s credit rating, which would be a deterrent for much needed foreign investment, and would also impact the country’s ability to borrow money on the global market,” WASA claimed.
In his decision, Justice Mohammed agreed with the company’s lawyer Fyard Hosein, SC, who claimed that WASA had produced insufficient evidence to warrant its claims.
“I am in agreement with counsel for TTSSL that there is a paucity of evidence proffered by WASA to demonstrate that it would face financial ruin should the application for a stay be refused,” Mohammed said.
He also pointed out that WASA had failed to prove its claim that the security company was also insolvent and would be unable to repay the money if it (WASA) was eventually successful in its appeal.
“In any event, even if it had been shown that TTSSL is currently unprofitable and at risk of insolvency, that factor in isolation would not have weighed heavily in the balance since any inability to repay the judgement debt would be due, either wholly, or in significant part, to WASA’s failure to pay the considerable sums due to TTSSL” Mohammed said.
Mohammed suggested that WASA could apply for a stay before a full panel of the Appeal Court after it files its appeal.
In the substantive lawsuit, the security company sued WASA over its failure to pay its obligations under two contracts from 2010 and 2014.
The company claimed it was owed $113 million for its services and $43 million for breach of the contracts, as it suffered losses due to WASA’s failure to pay.
WASA challenged the claim and claimed that the company charged rates and did services that were not agreed upon in the written contracts and subsequent oral agreements.
It also claimed that the oral contracts relied upon by the company were not enforceable as they were not put into writing.
A High Court Judge upheld the company’s claims and ruled that WASA was required to pay the compensation minus $9 million in payments for mobile patrol services, which were legitimately challenged by WASA.
WASA was represented by John Jeremie, SC, Kerwin Garcia, and Analisa Murphy, while Fyard Hosein, SC, Simon De la Bastide, and Theresa Hadad represented the security company.