The Water and Sewerage Corporation (WSC) has lost its lawsuit against Aqua Design Bahamas – the company which cut off supply of potable water to Central Eleuthera residents last October – after Justice Indra Charles ruled that WSC failed to demonstrate any legal basis that Aqua should have extended the time for payment to the end of the pandemic.
Aqua, which has had a contract for the past decade with the government to supply desalinated water to Central Eleuthera, cut off the water supply to customers last October during the peak of the COVID-19 pandemic after it said its many demands for the payment of arrears were not met.
The judgment handed down last week in the Supreme Court stated that in May 2020, Aqua notified WSC that its arrears were growing at a disturbing rate and that WSC was unresponsive on the issue of providing a concrete schedule of payments to address the arrears. Those arrears amounted to $644,010.12 at the time.
“On Friday, 16 October 2020, a representative of Aqua spoke with the permanent secretary in the prime minister’s office, David Davis, who confirmed that the letter had been received but it had been passed on to the minister and the chairman of WSC without the prime minister having seen it. He said that he would inform the prime minister over the weekend and Aqua would hear from them on Monday. On the morning of 19 October 2020, Aqua also wrote to the permanent secretary, prime minister’s office setting out the full accounting of the balances to Aqua in the amount of $644,010.12,” the judgement states.
“Aqua alleges that its efforts to have dialogues with the proper personnel were fruitless. At the close of business on 19 October 2020, Aqua emailed the General Manager of WSC Elwood Donaldson, notifying him of its intention to terminate the sub-agreement and cease production at Central Eleuthera immediately. That same evening, Aqua cut off the supply of water to the residents of Central Eleuthera during the peak of a deadly COVID-19 pandemic. On that same evening, the executive chairman of WSC made an urgent and direct plea to the Office of the Prime Minister, the minister of finance and the minister of works to provide funding so that Aqua could be paid the arrears. The letter states that WSC does not have the financial capacity to make the payments demanded by Aqua.
“It is alleged that the prime minister directed the treasurer to transfer the sum of $644,010.12 to Aqua by electronic bank transfer.”
The payment was made to Aqua on the day following the company’s decision to terminate its sub-agreement with the government.
The judgement continues, “Aqua continued to be owed for the supply of water. On 26 October 2020, Aqua issued another letter to WSC advising that the sum of $516,440.54 continued to be owed.”
In her ruling, Justice Charles said in her opinion, WSC could have with reasonable diligence cured the arrears, but it appeared that not much was done to address the habitual delinquency by WSC in making timely payments to Aqua.
“The clarion calls from Aqua fell on deaf ears. It was not until the evening of 19 October 2020 after Aqua turned off the water supply that WSC made an urgent and direct plea to the Office of the Prime Minister and the minister of finance to pay the arrears which were due and owing. It appears that communications had become increasingly difficult, if not impossible, between these parties,” she said.
Ferron Bethell, QC and Camille Cleare of Harry B. Sands represented WSC. Luther McDonald and Keri Sherman of Alexiou Knowles represented Aqua.
Pointing to WSC’s arrears that persist with Aqua even up to now, Justice Charles said WSC was the author of its own demise.
“WSC could have cured the default with reasonable diligence. Mr. McDonald argues that WSC cannot be heard to speak of reduced cash flow and that it had to wait on the government for assistance. He correctly maintains that nowhere in the agreement is the liability of WSC to pay made subject to its cash flow or to it receiving help from the government. Even as the parties await the delivery of this judgment, WSC continues to be delinquent, necessitating Aqua to file a notice of motion on 8 April 2021 seeking payment of arrears. On 15 April 2021, the court ordered that WSC shall pay the sum of $454,194.61 on or before 21 April 2021 and the matter was adjourned to the following day for a status report. It was brought to my attention that WSC had settled the arrears,” she said.
“While I am fully cognizant of the financial strains that COVID-19 and prior to that, Hurricane Dorian, have caused to this fragile economy, priority must be given to an essential commodity, such as water, even if consumers are not paying their bills on time. In fact, many of us may be delinquent in paying our bills or loan repayments as they fall due, but we sit down with the lender and enter into some form of settlement discussion. In my judgment, Aqua did not act unreasonably or irrationally when it cut off the supply of water and terminated the sub-agreement. The time given to settle the arrears was reasonable in the circumstances and accords with the terms of the master agreement.”
Cost was awarded to Aqua in the amount $84,218.50, being that it was the successful party in the proceedings and is entitled to reasonable costs. WSC’s costs amounted to $137,046.00.
“Last but not least, it is unfortunate that a once cordial and cooperative relationship between these two parties appears irreconcilable. However, nothing prevents them from going back to the drawing board and to negotiate a new sub-agreement on such terms and conditions which are beneficial to both parties,” Justice Charles said in her final ruling.
“Lastly, by virtue of the act, WSC was established to fulfil the mandate of the government of The Bahamas to provide potable water to its citizens and by extension, the residents of Central Eleuthera. Aqua does not have such an obligation. Aqua is in the business of supplying water. There is no legal basis to prevent Aqua from switching off its supply of water if the arrears are not paid within a reasonable time frame. There is also no legal basis for Aqua to give WSC sufficient time to secure another supplier. Communication is key to a healthy relationship. Communication cannot be a one-way street.”
The post Judge rules in favor of Aqua, says WSC ‘author of its own demise’ appeared first on The Nassau Guardian.
source https://thenassauguardian.com/judge-rules-in-favor-of-aqua-says-wsc-author-of-its-own-demise/
No comments:
Post a Comment