Toa decision being reviewed

In light of the Toa v Crown decision by Chief Justice Weston of the Cook Islands High Court, lawyers retained by Government for the case are now reviewing the decision. They will be proposing options to Government as soon as possible.
The Attorney General respects the decision of Chief Justice Weston and believes that although the agreement has been found to be binding on the Crown, there is room given by clause 6 (b)of the settlement agreement for further negotiations to minimise the exposure of the Government to liability.
There are also passages in His Honour’s judgment that indicate obligations by Toa to maximise its earnings before seeking top up from the Government.
The Attorney General commends the effort of Dr Alex Frame and the Solicitor General Tingika Elikana for putting up strong arguments. However, there was always the concern that if the Court gives a broad interpretation of the word “Guarantee” as found in the MFEM Act then the Court may find against the Crown. As we all know now the Court has found that clause 6 (c) of the settlement agreement is not a guarantee within the meaning of Section 59 of the MFEM Act.
The Government will also look at other steps that it can take to control its exposure to implications from this case in the medium and longer term. It should be pointed out that the Cook Islands MFEM Act was a direct import from the New Zealand law books and the New Zealand legislation was designed to prevent public officials and Ministers of the Crown from freely signing away contracts on behalf of the Government. The Cook Islands MFEM Act was intended to prevent such carefree contractual agreements. It was an Act passed in the Cook Islands during the economic crisis of the 1990’s where the Government committed expenditure without appropriation.
The finger pointing to Cabinet is all but an academic exercise. What the Government is faced with now is a decision by the Court that supports an agreement requiring funds from the Government that were never appropriated. The Attorney General wishes to commend the Prime Minister and the current members of Cabinet for agreeing to test this case in Court.
- Attorney General Media Release

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