On 18 November 2016, Mr. Justice Hellman of Bermuda’s Supreme Court handed down his judgment in the case of The Corporation of Hamilton v Mexico Infrastructure Finance LLC  SC (Bda) 94 Com.
The Judge has concluded that (a) the Corporation of Hamilton had no power or capacity to enter into a loan guarantee for $18 million, such that it was ultra vires and unenforceable, and that (b) a previous Consent Order entered into by the Corporation of Hamilton and approved by the Court was also ultra vires, and should be set aside, in the exercise of the Court’s discretion.
The judgment is obviously significant and newsworthy, both with respect to the substantive legal issues which it covers, and also with respect to the political, economic, and procedural background.
Although the case was well-argued by two eminent QCs from London (Michael Beloff and David Pannick), the fact that it had to be argued at all does not reflect very well on the parties to the transaction and the litigation to date.
For the purposes of this Blogpost, I draw readers’ attention to Mr. Justice Hellman’s use of the Latin phrase,”fiat justitia ruat caelum“, at paragraph 60 of his Judgment. This is often translated into English as “Let Justice be Done, Though the Heavens Fall“.
The phrase was apposite on the facts of this particular case, since it appears that both Mexico Infrastructure Finance LLC (directly) and the Government of Bermuda (indirectly) had sought to argue that the consequences of the Judge’s judgment would be disastrous for Bermuda as a reputable international financial centre (a theme also picked up by various media commentators).
The Judge pointed out, in response, that commercial or political arguments are irrelevant to the determination of a purely legal question (i.e. not a question raising issues of contractual interpretation, or the development of the common law in light of public policy considerations).
In any event, the Judge also concluded that Parliament, business entities, and the general public would naturally expect (should they turn their mind to the issue) that ultra vires transactions should not be enforced by the Courts, in the interests of commercial and legal certainty and good governance.
The most celebrated judicial use of the phrase “fiat justitia ruat caelum” was by Lord Mansfield in his judgment reversing the sentence of outlawry passed upon John Wilkes for the publication of The North Briton. Lord Mansfield said this:
“Unless we have been able to find an error which will bear us out, to reverse the outlawry; it must be affirmed. The constitution does not allow reasons of State to influence our judgments: God forbid it should! We must not regard political consequences; how formidable soever they might be: if rebellion was the certain consequence, we are bound to say ‘fiat justitia, ruat caelum’.”
Lord Mansfield was dealing directly with the public clamour that had arisen about the case. He referred to “audacious addresses in print“. He also referred to threats of personal violence. As to those he said: “The last end that can happen to any man, never comes too soon, if he falls in support of the law and liberty of his country: (for, liberty is synonymous to law and government)“, and he concluded by saying: “Once for all, let it be understood, ‘that no endeavours of this kind will influence any man who at present sits here.’ If they had any effect, it would be contrary to their intent: leaning against their impression, might give a bias the other way.”
By his use of this resonant phrase, Mr. Justice Hellman has sent a clear message to the Government of Bermuda (and the media) that the Supreme Court of Bermuda is constitutionally independent, and that it will treat all parties fairly in accordance with the law, whatever the political consequences.
This is a message that appears to be just as important in Bermuda as in England and Wales, given the occasional forgetfulness of Governments and the media in both jurisdictions as to the proper role and function of the Judiciary.
It remains to be seen whether or not the parties will pursue an appeal to the Court of Appeal or the Privy Council.
By way of update and footnote, various websites have recently published the written submissions which have been filed with the UK Supreme Court for the purpose of the Article 50 Brexit appeal. It can be no coincidence that the Written Case for the Lead Claimant, Mrs Gina Miller, which has been signed by Lord David Pannick QC (as the leader of her legal team), cites, at page 8, Lord Mansfield’s famous quotation, in support of the proposition that “those who suggest that the Court should focus on matters other than law are undermining basic principles of our constitution: the independence of the judiciary and the rule of law“.
If, as appears to be the case, Lord Pannick has taken his inspiration from the reference in Mr. Justice Hellman’s judgment, then perhaps a Bermuda Supreme Court judge can claim some credit for the use of the phrase, if it is eventually adopted and repeated by the UK Supreme Court when it gives its judgment.
By way of further update, on 25 November 2016, Mr Justice Hellman handed down his Ruling on costs. Although the Corporation of Hamilton had prevailed, he decided to make ‘no order as to costs’ on the basis that the proceedings had only been necessary as a result of the Corporation of Hamilton’s own conduct. This case therefore disclosed exceptional circumstances sufficient to displace the ordinary costs presumption that ‘loser pays’: “it would be adding insult to injury” to make Mexico Infrastructure Finance LLC pay its costs, in all the circumstances.