• Kellys Freeport wins 6 year Supreme Ct. Judicial Review trial!
  • Judgment for punitive, exemplary and aggravated damages against Customs for breach of Hawksbill Creek Agreement
  • Court declares Customs bully tactics against GBPA Licensee Illegal!
  • Customs actions “were arbitrary, unreasonable and contrary to law.”
  • Issues Permanent Injunction against Customs for all Licensees of GBPA

History of Action

In a 6 year judicial review odyssey by Kelly’s Freeport to hold Customs accountable for illegally trying to force it to accept a breach of the Hawksbill Creek Agreement, the rights of licensees of the GB Port Authority in Freeport have been once again vindicated by the Supreme Court.

This makes over a dozen cases over the years in which the courts have repeatedly upheld the HCA and rights of licensees from central government abuse and interference with business in Freeport.

In a case that has been fraught with delays, roadblocks and obstructionism by the government, the Supreme Court has delivered judgment in Kellys’ favor.

The case began in August 2010 when customs seized over 10 containers being imported by Kellys for the busy Christmas season and refused to clear them until Kelly’s buckled to their unlawful demands for production of over-the-counter bonded sales reports and payment of customs duties for previous imports.

The Supreme Court in Freeport, initially granted permission to Kelly’s to challenge customs actions in October 2010 by Judicial Review.

What should have been a quick administrative law decision which would have clarified and declared what were the rights of Customs, GBPA, and Licensees under the HCA in relation to the sale of bonded over the counter goods in Freeport and the necessity or not for monthly reports to Customs turned into a 6 year saga.

In October 2010, then Supreme Court judge Hartman Longley (now Chief Justice), issued an injunction against Customs from preventing licensees importation of goods pending a ruling in the JR.

As has been the habit of the government in all judicial reviews, they immediately struck back with procedural and technical applications to strike out Kelly’s claim which was unfortunately initially successful.

However, in 2013 Kelly’s succeeded in an appeal to the court of appeal which reversed the dismissal and sent the case back to the Supreme Court for trial.

After a series of trial hearings in which Customs obstinately and obstructively defended their illegal actions, Supreme Court Judge Estelle Gray Evans on December 1, 2016, delivered a 31 page ruling in favor of Kellys.

Comments by Smith QC

Smith said “This ruling has made legal history.

This is the first time that punitive and aggravated damages have been awarded in a judicial review case in the Bahamas on behalf of a licensee of the Port Authority in Freeport.

For decades, despite the fact that licensees have won case after case in the courts against customs, they have continued to behave like highway robbers, extorting illegal taxes from licenseesin Freeport.

The Hawksbill Creek Agreement has been vindicated again and the rights of licensees upheld.

The power of this case is that it takes the rights of licensees to a new level.

Not only has the court issued a declaration upholding their rights under the HCA, but it has gone one gigantic step further by ordering customs to pay punitive damages for its high-handed and illegal conduct.

It is also the 1st time that a permanent injunction for all licensees has been made against Customs to prevent it from continuing to behave in a high handed manner in future.

This is a judicial message to the government that there will be punishing financial consequences in damages against the government for illegal and abusive behavior by customs towards licensees in Freeport.

This Judgment also affects all importers throughout the entire Bahamas.

What it means is that customs is not a law onto itself.

It cannot create extra judicial means of enforcement to collect customs duties or punish importers by preventing them from importing their goods simply because customers may have an issue with Customs in relation to some past conduct or some concocted administrative procedure it has foisted on the public.

This judgment upholds due process against Customs on behalf of all importers in the Bahamas.

Customs can no longer hijack shipments, prevent clearance and hold a person’s goods hostage until it meets a bully boy demand.

It is illegal for Customs to hold importers ransom; Might is no longer Right!

It’s no longer business as usual.

The Court was obviously expressing it’s impatience, intolerance and frustration at the many years of customs abuse of HCA licensing rights.

The Judgment

The judgment began with the important words;

“This is ANOTHER..” case challenging Customs in Freeport. (par1)

In her Ruling, Judge Evans found (para 42) that;

That Customs “….has failed to show that, as a licensee of the GBPA, the production of a bonded sales report was a condition of (Kellys), as a licensee of the GBPA, being permitted to sell bonded goods to other licensees of the GBPA..

The judge did however find (par 62) that the Customs regulation that required bonded sales reports was a valid regulation, but as this had been repealed by Parliament it was therefore not an issue.

At para 77 she decided that the delays by Customs in clearing Kellys’ 10 containers, was “…in fact, an attempt by (Customs) to enforce (Kellys) compliance with the demand for reports of bonded sales…”

At par 78, Judge Evans continued that although Customs was “entitled to take legitimate measures…to protect public revenue… (Customs) is also a creature of statute and as such..…cannot take administrative action which is not in compliance with the law.”

“As noted in the Unexso case, (Customs) cannot create new ways of enforcement, by administrative fiat or otherwise”.

At para 82, the Judge continued;

“It is clear, that (Customs) “took matters into his own hand” and engaged in “self-help remedies” in an attempt to enforce (Kellys’) compliance with Regulation 24…and I accept the submission of counsel for (Kellys) that (Customs) “enforcement actions” were arbitrary, unreasonable and contrary to law.”

The judge found at par 83 and 84 that Customs had “unlawfully detained” Kellys’ goods and their actions were “unreasonable and unlawful”.

At para 100 onwards the court awarded “General Damages” to Kellys.

In addition, the Court at para 104 found that the actions taken by Customs were “….arbitrary…and calculated to disrupt (Kellys) business in an attempt to force (Kellys) to comply..”

Consequently, in addition the court awarded “aggravated and exemplary damages” to Kellys, and ordered an enquiry to be conducted to decide the amount Kellys should receive.

The Judge also importantly for the future of Freeport Licensee rights, imposed a permanent injunction;

“…restraining (Customs) to detain goods, or refuse to process imported goods for entry in the usual way, or refusing to accept returns for duty paid sales or otherwise taking enforcement action against GBPA licensees on the basis of no-receipt of duty exempt bonded sales reports or on any other basis not sanctioned by law.”

The Court also ordered Customs to pay 80% of Kellys’ costs.

Kelly’s was represented by Frederick Smith QC and Dawson Malone of Callenders and Co and Customs was represented by Mr. Gary Francis of the Attorney General’s Chambers

For further information on this Release, please contact Frederick Smith at 242 727 5191

Frederick Smith QC

Attorney for Kellys Freeport

Source: Barefoot Marketing