“We are of the respectful view that the impugned legislation contravenes a citizen’s constitutional right to the enjoyment of property and not to be deprived thereof except by due process of law.
“While it is accepted that a bona fide change in the form of legal tender may serve a legitimate aim and may be necessary to combat the proliferation of counterfeit currency, the oppressive and disproportionate power to render the monetary value of currency, legitimately held by citizens, invalid within a paltry period of 14 days constitutes an impermissible fetter on the citizens right of enjoyment of property.”
The following is excerpted from a pre-action protocol letter sent on 11 December 2019 to Attorney General Faris Al-Rawi on behalf of Vijay Maharaj, the acting secretary-general of the Sanatan Dharma Maha Sabha (SDMS) and the SDMS. The letter argues that the recently announced 31st December deadline to turn in $100 paper notes for new polymer ones before they become invalid infringes on citizens’ rights.
On or around 9 December 2019, Dr Alvin Hilaire at a press conference at the Central Bank of Trinidad and Tobago indicated that all ‘old notes’ of the existing $100 bills would no longer be legal tender as of 31 December 2019. He indicated that all citizens would have ‘till the end of the year to convert their old paper bills to the new plastic polymer notes’.
Since this proclamation by the governor of the central bank, there has been widespread panic/chaos at all banking institutions throughout this country. The inconvenience and pain of demonetisation have been evident. Citizens from far and wide have all queued up in absurd lines at various banking institutions to exchange their ‘old bills’ to ‘new ones’.
There have also been reports of various elderly persons falling ill and fainting away in these lines, waiting to change their ‘old notes’ to ‘new ones’. Unofficial reports have come to our client’s attention that certain businesses/ businessman, in attempting to get to their banks were targeted by criminal elements and have been robbed.
In Trinidad and Tobago, the $100 denomination represents the largest value of all our currency in circulation. It accounts for 90% or $7.65 billion of all notes in circulation. After the $1 denomination note, the $100 note represents the second-largest volume of notes in circulation, at about 34% of all notes currently in active use.
The daunting task of converting the aforementioned magnitude of currency has been further exacerbated by the fact that indigenous cash counting machines and/or Automated Teller Machines are not configured to count/dispense the new polymer notes.
The Bankers Association of T&T (BATT) has also recently stated that existing bank customers can initially access $50,000 of the new $100 polymer bills, and further that those who do not have accounts in banks will be subject to a $10,000 limit and will have to sign a declaration of their source of funds.
A large number of citizens, simply because of their preference to avoid heavy interest charges or administrative banking fees, choose not to bank their monies. Unofficial reports have surfaced that certain banking institutions are charging between $5 to $10 dollars to conduct transactions involving encashing of the existing $100 notes. They prefer to keep their monies in their ‘mattresses’ or in other less conventional means of storage. Further, citizens of the Islamic faith do not believe in monies being kept at banking institutions and stand to be severely prejudiced by the implementation of this law.
Small and medium businesses have reported that sales and services will significantly decrease as persons have already advised of their non-willingness to queue-up before the banks during the Christmas/Old Year’s period to exchange cash. Target customers have indicated that they will spend their remaining physical cash on necessities. Therefore, the usual vibrant economic activity/cash-economy which prevails during this Christmas period will be severely prejudiced.
There has been no evidence that the demonetization undertaken at this time will effectively wipe out black money. Elitist money launderers will more likely forfeit their monies rather than risk detection.
Threats against these types of persons by way of a statement from the ministry of national security merely reciting the provisions of the Proceeds of Crime Act will not persuade them to abandon their ill-gotten wealth or manner of conducting business. On the other hand, if it is government intends to scrutinise the deposits of large amounts of cash flowing into the banks, this exercise is more likely to hassle hard-working individuals rather than weed out launderers etc.
Much of the above is a manifestation of shoddy implementation and the question as a matter of fact being raised is: what is all of this about? As a matter of law, the following issues arise for consideration.
Currency is a long-established financial instrument used to facilitate exchanges of goods and services. In addition to being a medium of exchange, currencies must hold value and be capable of being expressed in common units. Furthermore, a currency can be legal tender, as defined by the regulating authority, or common tender by means of acceptance.
Financial regulation is most effectively performed by the government, traditionally by coining and printing national monetary instruments to be used as common currency. It is the government that generally regulates and police currency, and therefore, they legitimize its value as currency by protecting the public’s interest.
Taking away a citizen’s monies, or the benefit of the use of their monies, in circumstances where they have no right of appeal, and/or outside the ambit of a judicial determination, violates their rights to the enjoyment of their property and the right not to be deprived thereof except by due process of law and the right to a fair hearing guaranteed under the constitution.
The attorney general is the guardian of the public’s welfare and ought to ensure that citizens’ constitutional and/or public law rights are protected. In this regard he is failing in his duty for the following reasons:
We are of the respectful view that the impugned legislation contravenes a citizen’s constitutional right to the enjoyment of property and not to be deprived thereof except by due process of law. While it is accepted that a bona fide change in the form of legal tender may serve a legitimate aim and may be necessary to combat the proliferation of counterfeit currency, the oppressive and disproportionate power to render the monetary value of currency, legitimately held by citizens, invalid within a paltry period of 14 days constitutes an impermissible fetter on the citizens right of enjoyment of property.
We note that the Act does vest the minister with discretion to extend this unreasonable period of time, however, the power vested in the minister is vague, unspecific and arbitrary. In essence, the power to extend in circumstances that the minister deems appropriate is an insufficient procedural protection to the citizen and does not tilt the scales of proportionality in favour of the impugned legislation.
Further, the mere fact that the bank is given the power to redeem notes subsequent to the expiration of a 14-day period in circumstances where the failure to redeem was ‘beyond the control of the true owner of the notes or that there was some other good or sufficient reason for the failure’ is insufficient to protect the property rights of the citizen in the absence of a promulgated and/or published policy by the central bank to particularise the circumstances that notes will continue to be accepted and/or in the absence of specifically stated criteria within the statute.
These provisions, which are being touted as measures to mitigate the harshness of the 14-day period, are unfortunately plagued with arbitrary discretion, which is the antithesis of legality and cannot justify the impugned legislation.
In this regard, we hasten to remind you of the words of Dr Eric Williams when considering what democracy meant:
“Democracy means responsibility of the government to its citizens, the protection of the citizens from the exercise of arbitrary power and the violation of human rights and individual rights”
We are also of the considered view that the legislation infringes on the protection of the law provisions of the constitution. As you are no doubt aware, the right to the equal protection of the law, affords every person protection against irrationality, unreasonableness, fundamental unfairness or the arbitrary exercise of power. These are, in any event, fundamental common law principles governing the exercise of public functions.
We are of the respectful view that the impugned provision is not only irrational, disproportionate and unreasonable but clearly arbitrary in the absence of any sufficient procedural protections.
JUDICIAL REVIEW CLAIM
Given the aforementioned, our client further intends to challenge the decision to cancel the existing one hundred dollar bill as being irrational and/or disproportionate and/or a harsh and oppressive exercise of power.
We are of the view that material considerations were not taken into account in arriving at this decision, particularly the sheer volume of currency, the extreme inconvenience to the citizenry and the incompatibility of existing facilities and technology to process the quantum of conversion required.
To this end and given the urgency of the matter we intend to despatch separate pre-action protocol letters to the minister of finance and central bank governor within the next 48 hours wherein we shall seek appropriate interim undertakings.
Editor’s Note: Click HERE to read a press statement on Trinidad and Tobago’s attempt to transition to the new TT$100 bill by Minister of Communications, Donna Cox.