Court upholds ruling against government postal scheme
The Court of Appeal has upheld a ruling that the Government acted unlawfully when it teamed up with an American company to create an overseas online shopping and shipping platform.
The Government announced the creation of MyBermudaPost in 2020 as a public-private partnership, which it was later revealed was with US courier Access USA Shipping LLC.
Mailboxes Unlimited, a Bermuda courier business, argued that the Government was subsidising a foreign company to the disadvantage of island firms and had gone against its own procurement code.
While counsel for the Government argued that the procurement code had no legal effect because it had not been properly gazetted, the Court of Appeal found in a ruling handed down yesterday that the code was still enforceable.
In the judgment, written by Justice of Appeal Sir Anthony Smellie, the court said that while publication was required for the order to have binding legal effect “generally”, the code still carried weight because it had been issued and implemented by the Department of Project Management and Procurement.
“There has been and could be no suggestion that the responsible public officers were uninformed about its existence or were not obliged to comply with it,” Sir Anthony wrote.
“In any event, it is well established that ministers have a duty to comply with policies which they have adopted.
“These policies create and embody public law duties even when not set out in statute.”
The court also shot down a call to overturn the case on the basis that Mailboxes Unlimited did not have sufficient interest to bring the matter forward, finding that Mailboxes Unlimited was well placed to have tendered a bid if there had been an open procurement process, and its interests are affected by newcomers entering the market.
Wayne Furbert, then the Minister of the Cabinet Office, announced that the government-run Bermuda Post Office partnered with the US courier Access USA Shipping LLC to import goods purchased online by island consumers.
The service agreement was reportedly valued at $24,000.
In discussing the scheme three years ago, Mr Furbert criticised island retailers for failing to meet customer demand, insisting that the Government had stepped in to provide the public with a much needed service.
Responding to questions in 2021 about why Bermudian companies were not asked to provide the same service that was offered by MyUS, the service from Access USA Shipping, he said: “Why not go somewhere else?”
However, the contract was subsequently challenged by Mailboxes Unlimited, which filed for a judicial review.
In August 2023, Chief Justice Larry Mussenden, then a puisne judge, found that the Government’s contract with the foreign courier was “unlawful” because it had failed to abide by its own procurement code.
He also asked the Government to provide details of its contract with Access USA to establish how it could be terminated.
The Government launched an appeal, arguing that Mr Justice Mussenden was wrong to determine Mailboxes had sufficient interest to bring the case and that the procurement code did not have legal effect.
The Government also argued that the judge was wrong to conclude that there had been a procurement in the first place “in circumstances where there was no evidence to justify that finding and when, on the basis of the case argued by Mailboxes, no such procurement existed”.
The Court of Appeal, however, upheld Mr Justice Mussenden’s ruling.
Sir Anthony wrote: “Given the state of the evidence in this case and the abiding position taken by the appellants not to disclose the documents relating to their dealings with Access USA, the judge was entitled to assume that a procurement had either taken place or its process was already set in train.
“Whatever concerns about confidentiality the appellants might properly have had about disclosing those documents, they are not allowed to ‘run with the hares and hunt with the hounds’ on this issue.
“They cannot argue that the court may not reasonably infer from the available evidence the existence of a procurement while at the same time choosing not to disclose any evidence they might have to the contrary.”
While he said the court could not determine what the $24,000 payment to Access USA was for, it was reasonable for Mr Justice Mussenden to infer the payment was in respect of a service agreement and therefore subject to the code as a low-value procurement.
Sir Christopher Clarke, the President of the Court of Appeal, added that he found it unfortunate that the Government had been “so unrevealing” as to the nature of its agreement with Access USA, its terms and how the $24,000 value of the agreement was calculated.
“It does not seem to me that the appellants have set out ‘fully and fairly’ what exactly they have done,” he wrote.
“In the absence of such information I entertain considerable doubt as to whether that extremely modest figure is a correct assessment of total value, which is ‘the value of goods or services to be procured during the term of a contract’.”
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