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Sunday, 16 June 2013

Defender of the Public Trust

I have decided to award myself the above title.

The case of whether the Public Markets' rents should be subject to GST has now progressed a stage further and the particulars of the claim have been submitted by 'the Treasurer of the States'.

Interestingly it is the submission is based on a decision in the early twentieth century which determined that a workhouse under the trusteeship of the Guardians of the Poor of St Marylebone was a business (South West Suburban Water Co. v. Guardians of the Poor of St. Marylebone, 1904(2) Kings Bench 174) in relation to the 'domestic supply of water'; the case found that the work house should pay for water as if it were a business. What bearing this has on whether or not GST should be charged on the rents in the public markets, I cannot see, but clearly this is the best they have. A further case has been dredged up from 1887 which states that any activity which is carried on a great expense is a business, but surely the law has moved on in the past 126 years. Why can they not find any case which says that the operation of Government is a business? I suspect it is because it is not, and therefore there is not one.

Thus having clearly established that in legal terms my case is the superior, the discussions now turn to the implications of allowing me to win.

Jersey Property Holdings has recently started charging GST on a number of rents; every stall in the markets, in Liberty Wharf and at every cafe and kiosk all around the coast. Which is probably around £500,000 collected in the last six months.

This in itself is a breach of trust; for if the States of Jersey are not personally profiting from this action then they are at least placing themselves in a position of conflict of interest.

Trustees have certain duties. These include the duty to:
  • Carry out the expressed terms of the trust instrument
  • Defend the trust
  • Prudently invest trust assets
  • Be impartial among beneficiaries
  • Account for actions and keep beneficiaries informed
  • Be loyal
  • Not delegate
  • Not profit
  • Not be in a conflict of interest position
  • Administer in the best interest of the beneficiaries
The States of Jersey somehow forget that they are the trustees of the Public Trust in their case. There are also multitudinous errors in Law contained within the various agreements.

So the answer now submitted is as follows:
1.       Definitions of terms used in this Answer
a.       ‘The Lessor’ is the Public of the Island of Jersey, whom is also the Settlor and Beneficiary of the ‘Public Markets Trust’.
b.      ‘The Public Markets Trust’ is that established with the proceeds of seven public lotteries with the intention of constructing Markets for the benefit of the Public of the Island of Jersey.
c.       ‘The Lessee’ is Darius James Pearce
d.      ‘Nigel Pearce’ is Nigel Robert Williams Pearce, the original Lessee
e.       ‘The States of Jersey’ is the Trustee of the Public Markets
f.        ‘The Inspector of Markets’ is the duly authorised representative of the Lessor under Article 11 of the Public Markets (Administration) (Jersey) Regulations 1947, as party to any rental contracts entered into.
g.       ‘The Minister Responsible’ is the Minister of Transport and Technical Services as per Article 1 of the Loi (1885) Touchant L’Administration Des Marches Publicsh.      ‘The Agent’ is any other person who acts with the consent of the Inspector of Markets on behalf of the Public of the Island of Jersey; this may be the Treasury and Resources Department or Jersey Property Holdings Limited or another Agent.
i.         ‘GST’ Refers to any sums payable under the Goods and Services Tax (Jersey) Law 2007.
j.        ‘the GST Law’ refers to  the Goods and Services Tax (Jersey) Law 2007 2.       IDENTITY OF THE PERSONS WHO ARE PARTY TO THE CONTRACT. There has been consistent errors in the identity of the person who acted as ‘Lessee’ initially the contract was with ‘Nigel Pearce Jewellers’ when in fact the correct person was ‘Nigel Pearce, Jeweller’ and the identity of the person who is currently the Lessee is Darius James Pearce. ‘Nigel Pearce Jewellers’ was never a person to the best of my knowledge. ‘Nigel Pearce & Son, Jewellers’ is a trading name of Jersey Online Traders Limited who is not a party to the contract.
3.       The document referred to as ‘A Memorandum of Assignment of Lease’ dated 20th May 2009 which assigns the benefit of the lease from Nigel Pearce to the Lessee is in fact not an Assignment but a Novation as it is a tri-party agreement between The Treasury and Resources Department (acting as Agent on behalf of the Public of the Island of Jersey with the consent of the Inspector of Markets), Nigel Pearce and the Lessor.
4.       In paragraph 5 of the Particulars of Claim the Plaintiff concedes that GST shall only be charged on the supply of goods or services made by a taxable person in the course or furtherance of any business carried on by the person. The Plaintiff makes no representation to demonstrate that ‘The Public of the Island of Jersey’ is a taxable person, nor that they are a registered person under the GST Law.
5.       The Plaintiff in his Particulars of Claim further confuses the parties to the Contract. The Trustee is an employee of the Lessor and any contract which exists between the Trustee and Lessor is not the subject of this matter. Therefore any GST chargeable on the services provided by the Trustee to the Lessor is not a matter which is the business of the Lessee, nor of any relevance to the Court’s deliberations on the matter under consideration.
6.       However, it is apparent that the provision of GST to the services provided by the Trustee as specified under the GST Law as amended Goods and Services Tax (Jersey) Regulations 2007 specifically separates those occasions when the Trustee is acting on behalf of the Public of the Island of Jersey and when the Trustee is acting on its own account, on a commercial basis, and only subjects those commercial activities to the effect of the GST Law. This is the stated intention of the Minister during the debate on the GST Law and Regulations in the States of Jersey. It was never intended that GST should be chargeable on the normal business of government, that being the operation of the Public Trust. For the plaintiff to suggest otherwise is patently absurd. There is no GST levied on Income Tax, Social Security Contributions, or Parish Rates.
7.       The Plaintiff appears before the Royal Court in full dishonour having made no effort to enter into discussion with the Defendant for the previous seven months; this matter appears before the Court through the choice of the Plaintiff when the reasonable course of action would have been to enter into correspondence on the matters contained in the Particulars of Claim and Answer.
8.        Therefore I humbly beseech the Court to dismiss the claim of the Plaintiff and award the Defendant full indemnity costs.
The issues with which the judge must now contend are:

  • Is government a business?
  • Is government a trust?
  • Are 'the Public of the Island of Jersey' a taxable person?
  • If so, should the trustees (the States of Jersey) not pay parish rates on the properties they administer on their behalf?
  • What are the implications for the finance industry of whatever verdict is arrived at?
  • What are the implications for the lease renewals in the Public Markets which come up on December 24th 2013?
It seems that I have found the right question to ask, and I eagerly await the answer to my query. It has been seven months so far but the judgement should be handed down in the next 28 days or so. As the case entirely rests on points of law and their is no dispute as to facts, it can be dealt with by way of summary judgement under Rule 7/8 of the Royal Court Rules 2005.

Eight months, you see the wheels of justice can move move swiftly.