Case details

Mexico Infrastructure Finance LLC (Appellant) v The Corporation of Hamilton (Respondent) (Bermuda)

Case ID: JCPC 2017/0075

Jurisdiction: The Court of Appeal of Bermuda

Case summary

Issue(s)

Whether the Respondent had acted ultra vires in entering into a guarantee in favour of the Appellant pursuant to the Municipalities Act 1923 ("the Act").

Facts

The Respondent is a statutory corporation which owns a car park in the City of Hamilton. In 2012, it entered into an agreement with PLV for the development of a hotel complex on the car park. The Respondent offered to provide a guarantee and security for a loan provided by the Appellant to finance the development. The Respondent sought the Minister’s approval to issue the guarantee, but the Minister informed the Respondent that he was unable to authorise it to proceed given concerns that the Respondent’s statutory powers did not extend to the issuance of the guarantee. On 15 October 2013, the legislature passed the Municipalities Amendment Act 2013 in order to enable to Respondent to issue the guarantee. Following the amendment, and pursuant to the new statutory framework, approval for the guarantee was obtained from the House of Assembly and the Senate. The Respondent then executed the guarantee, and the Appellant provided PLV with the loan. PLV failed to repay the loan on its due date. In January 2015, the Appellant served proceedings under the guarantee against the Respondent in the Supreme Court for the outstanding balance plus interest. On 27 May 2015, Hellman J signed a Consent Order which granted judgment against the Respondent for US$18 million. The Respondent issued a summons to set aside the judgment on the grounds that the guarantee was ultra vires. On 18 November 2016, Hellman J set the judgment aside. The Court of Appeal dismissed the Appellant’s appeal. The Appellant now appeals to the Judicial Committee of the Privy Council.

Parties

Appellant(s)

Mexico Infrastructure Finance LLC

Respondent(s)

The Corporation of Hamilton

Appeal

Justices

Lord Reed, Lord Sumption, Lord Lloyd-Jones, Lord Briggs, Lady Arden

Hearing start date

16 Oct 2018

Hearing finish date

16 Oct 2018

Watch hearing
16 Oct 2018 Morning session