The Question of Temporary Stewardship of the Corporation of Hamilton

The Question of Temporary Stewardship of the Corporation of Hamilton

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On 22 December 2014, counsel for the Corporation of Hamilton (the “Corporation”) initiated proceedings to challenge the constitutionality of certain amended sections of the Municipalities Act 1923 (the “Act”) (the “Proceedings”).

On 26 January 2015, the Minister of Home Affairs (the “Minister”) exercised his right under section 7B(6) of the Act and provided notice to the Corporation that he intended to assume temporary stewardship of it (the “Stewardship”).

The reason for the Stewardship was due to the maladministration of the Corporation. Simply stated, the members were not able to work cohesively.

This was the second stewardship that the Minister had assumed over the Corporation. Shortly after assuming Stewardship, the Minister applied to have the Proceedings discontinued.

The recent judgment dated 19 March 2015, by Chief Justice, Dr. Ian Kawaley, in the case of The Corporation of Hamilton v The Attorney General, The Minister of Home Affairs and the Ombudsman (2015) SC (Bda) 22 Civ highlighted two critical issues:

(1) Whether counsel for the Corporation had due authority to commence the Proceedings, and
(2) Whether under the Stewardship the Minister could discontinue the proceedings.

For the purposes of this post, I will only be looking at the second issue of Stewardship.

Counsel for the Minister submitted that the Minister was allowed to discontinue the Proceedings because the Stewardship, provided for in the Act, conferred that right. Governance includes the ability to make litigation decisions.

Conversely, Counsel for the Corporation submitted that the Stewardship did not allow for him to unilaterally discontinue the Proceedings because doing so would usurp the power of the Corporation in its entirety.

Ultimately, the Chief Justice concluded that the Stewardship did include, as a matter of law, the right to assume responsibility of the Corporation for the governance functions “including the right to control litigation in relation to the Corporation”; however, each case would turn on its facts and this right was not an automatic right. In this instance the Minister was not able to discontinue the Proceedings because he was a party to them.

The Chief Justice also noted that the correct course of action would be for the Minister to stay the Proceedings until after the imminent Corporation elections are held, as it is unlikely that the present Stewardship period would end before the elections.

This recent decision is one of many that the Corporation has been a party to. What will happen to the Proceedings remains to be seen as it is hoped that once the elections take place in May, a decision on whether to continue or discontinue the Proceedings will be made by the new Board of the Corporation.