Archive for April 18th, 2010

Following the latest disagreement between Miller and Dan Duguay over when the updated version of the State of Government Financial Accountability should be released to the public, Miller said the Standing Orders needed to be changed to make it clear so there can be no misunderstandings regarding when these reports can be in the public domain.

He explained that at present there was no constitutional authority for any auditor general to release the reports from the office into the public domain as that was the role of parliament. He said the auditor general was independent and free to choose the investigations carried out by the office, but once the auditor and his or her team completed those reports they became the property of the Legislative Assembly.

Miller said he had made suggestions some time ago to change Standing Orders to remove the current ambiguity and said he had again spelled out the changes that were needed in the PAC annual report.

“I am disappointed that government has not yet had a meeting to put the proper changes in place,” he said. “Had that been done none of the controversy would have arisen.”

Miller said the latest report from the AG was very important and it needed to be a public document and he had no intentions of trying to prevent that from happening. However, he noted the procedure had to be followed, which meant he needed to ensure all members had seen the report before it was declared a public document, and he was doing everything he could to expedite that process under the current agreement made between the former PAC chair and the current AG.

“My performance as chair of PAC has demonstrated my commitment to getting these documents into the public domain but it must follow a legal process,” he added. Miller noted that in the wake of the news that there would be a new AG coming in July it was even more important that the current uncertainty about the reports was removed.

At present, under the written agreements made between Duguay and the former chair of PAC, Osborne Bodden, the AG reports would be brought to the Legislative Assembly for the members, and two days after they received them the report would be public. However, the question about how the members confirm receipt if the House was not in session was never clarified, Miller has claimed. He said he had to be certain that all members actually had the report, which was why while the House was not sitting as was the case now, he was having to contact members to ask them to collect the report.

Miller said that circulating the document by email was not sufficient since one could not be sure the members had seen the email and therefore opened the report, and he said he wanted members to sign to say they had it so there could be no question of any claiming they had no knowledge of the content.

Duguay took his latest report regarding the state of government finances to the LA on Wednesday and in the past he would have circulated the report on Friday. However, the report has not yet been released and the contents remain a mystery. CNS will continue to call the PAC chair until he gives his OK for this latest key auditor’s report to be disclosed.

Whatever the continued dispute regarding the insurance settlement and the fact that the government has goodwill towards the developer, he said,  it is six years since Hurricane Ivan and the situation with that particular site is having a serious impact on the area in general and other property owners.

“It is hurting Cayman to have this situation,” added Bush. “I want to see the problem addressed and I have given the owner time and nothing has happened. We are going to put in place a daily fine of $25,000 for derelict properties in hotel zones.”

He said he hoped to bring the necessary legislation to the Legislative Assembly sometime during May, which would not only force the owner to take action regarding the Hyatt but serve as a warning to others in the future not to allow properties to seriously deteriorate.

Aware of the continuing dispute, Bush said he had been asked to intervene, but he said the government was not in a position to interfere with the court’s decisions and whatever the owner’s battle with the insurance firms, the premier said he had to consider the impact on Cayman.

Recently, the general manager of the Grand Cayman Beach Suites (the new name of the property since the Hyatt removed its branding as a result of the problems with the part of the hotel to the north of Seven Mile Beach) said that most of the insurance issues were settled but there remained an outstanding issue with one insurer.

Powers has been outspoken in the press about the situation recently on behalf of Embassy and Asif Bhatia, the owner of the hotel, and has accused Houston Casualty Company (HCC), one of the many insurers involved, of failing to honour its commitment.

Appleby, the insurer’s law firm, has denied the accusations, however, on behalf of HCC (see Letter to Cayman News Service and Cayman Net News) and noted that the hotel cannot use this part of dispute as an excuse not to develop as they are such a small part of the picture. Furthermore, Appleby said, the public statements made on behalf of Bhatia and Embassy by Powers have been false and misleading.

“Contrary to the impression being given to the media, the role of HCC in respect of the insurance dispute is and always has been minor,” Appleby said. “The US$50m of insurance on the Hyatt was (subject to a deductible of US$200,000) arranged in various layers in various markets, including the London insurance market. HCC’s London branch wrote a small percentage (7.8%) of part of a US$15m excess layer. HCC’s maximum share of the total sum insured of US$50m was therefore less than US$1.2m.”

HCC claim to have a number of legitimate reasons to decline Embassy’s claim, which is the subject of legal proceedings in the Grand Court. The lawyers also asked why, when so much of the claim is settled, those insurance proceeds are not being used to reinstate or repair the hotel.

Appleby also revealed that, aside from the insurance policy dispute that remains pending, there is a further contractual dispute, which is subject to arbitration proceedings in London.

“A final Award has recently been issued in those proceedings, which provides a clear picture of the course of the unresolved policy dispute between Embassy and HCC and casts light on why HCC has not been able to settle the dispute with Embassy. HCC would like to release the final arbitration Award so that the people of Cayman can benefit from this full picture,” Appleby said, adding that Embassy are refusing to disclose this award despite going on record saying they want to provide the people of Cayman a proper context in the interest and openness and transparency. “HCC invites Mr Bhatia and Embassy to consent to the Award being published to the people of Cayman,” Appleby’ said on 1 April.

In response, Powers said on behalf of Bhatia that he welcomed the fact that Houston Casualty Company had chosen to engage with Embassy in a more public forum. However, Powers did not reveal the details of the award or any timeline for the planned re-development of the site, as asked by CNS and of major concern to the people of Cayman.

Accusing HCC of being the ones making false, misleading and misrepresentative statements, not Embassy, Powers said Houston Casualty Company had influenced the other Insurers and was a parent company of some of those involved and therefore not such a small player as claimed. “The fact that Houston Casualty Company has no legitimate reason to continue to wrongfully withhold insurance policy proceeds which are rightfully due to Embassy is clearly evident from the fact that all the other 15 insurers have now already paid the agreed policy proceeds,” Powers said, adding HCC had not paid a “single cent despite its clear obligation.”

The general manger said more was at stake than the reinstatement of the hotel, given Cayman’s vulnerability to hurricanes.