The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Chief Justice yesterday ruled that the web shop industry had produced no “credible evidence” it would be irreparably harmed without an injunction preventing its shut-down, describing claims of ‘financial Armageddon’ as “rather hollow”.

Explaining why he decided not to grant the sector its cherished injunction, which would prevent the Royal Bahamas Police Force (RBPF) from closing down or otherwise interfering with its operations, Sir Michael Barnett agreed with the Attorney General that the public could “suffer irreparable harm” if the web shops were allowed “to continue and profit from illegal activity”.

The Chief Justice, though, pointed out that the police, and Attorney General’s Office, could only take legal action if there were breaches of the Lotteries and Gaming Act - something that was totally different from a shut-down of the web shop industry.

“The claim by the plaintiffs that they would become bankrupt if an interim injunction is not granted is based upon the premise that the police can shut down their entire business operations whilst the matter is being litigated,” Sir Michael said.

“There is, in my judgment, no basis for this fear. The police can only prosecute for breaches of the Lotteries and Gaming Act. The police cannot shut down the plaintiffs’ operations.”

He added that despite being charged and convicted in 2009 under the Lotteries and Gaming Act, Craig Flowers and his FML Group of Companies had not alleged - and provided no evidence - to show the business had suffered irreparable harm as a result.

That matter is under appeal, and Sir Michael concluded: “In my judgment, the assertion that the plaintiffs will suffer irreparable harm unless an interlocutory injunction is granted is not supported by any credible evidence.”

As for the web shop industry’s claim that it could not be compensated for any damages should the police take action, Sir Michael described these assertions as “self-serving”.

“In light of their own claims, the plaintiffs’ present protestations that they cannot be compensated in damages are rather hollow,” he added.

Sir Michael ruled that the issue of whether the web shop industry’s activities constituted a criminal offence was not one that should be determined in the civil proceedings before him.

“It is not without significance that this action was brought by Writ of Summons, and not by Originating Summons or Originating Notice of Motion, which would have been the proper procedure where a matter involves pure issues of law and no dispute as to the facts,” Sir Michael found.

“This was an action commenced by writ after the threatened proceedings, in which the plaintiffs have been coy as to the actual nature of their business operations.”

As for the web shop industry’s challenge to the Lotteries and Gaming Act on constitutional grounds, Sir Michael described this as a “red herring”.

“In my judgment, there is no constitutional question raised by these proceedings. What is being challenged in these proceedings is the conduct of the plaintiffs in allegedly using their premises for the conduct of promoting a lottery or for gaming without a prerequisite licence,” the Chief Justice said.

“Whether or not certain provisions of the Act violate Article 26 of the Constitution is in my judgment a complete red herring. It does not arise on these proceedings.

“In my judgment, even if this action were to raise issues as the validity of the Lotteries and Gaming Act, it would not be a proper exercise of my judicial discretion to restrain the police for enforcing the law whilst the validity of the challenged law is being tested.

“Laws are presumed to be valid and must be obeyed unless and until they have been adjudicated as being invalid. The police must be allowed to enforce the law unless and until the law has been declared to be invalid.”

As for the web shop industry’s claim that it had a ‘legitimate expectation’, based on talks with the Government, that its activities would be licensed and regulated, Sir Michael agreed this was a “serious issue”.

“If successful, the courts may well grant relief which may require the executive to grant the requisite licences. However, I am far from persuaded that the balance of convenience lies in restraining the police from enforcing the law whilst the claim based upon legitimate expectation is being adjudicated,” Sir Michael ruled.

The web shops involved in the court action were FML, Asue Draw, Island Luck, WhatFall, Chances Internet Services, Percy’s Web Cafe and Paradise Games.