PORT OF SPAIN, Trinidad, Thursday October 18, 2018 – Belize-based Titan International Securities Inc (Titan) has lost its legal bid to obtain US$4.46 million in losses from the government for a search and seizure operation conducted at its offices in September 2014.
But the Caribbean Court of Justice (CCJ) which dismissed the claim, has ordered the government to pay vindicatory damages of BZ$100,000 (US$49,759) for the way in which the operation was executed.
In September 2014, an indictment was unsealed in the United States charging Titan, its president Kelvin Leach, and 11 others with securities fraud, evasion of taxes, money laundering and conspiracy to commit those offences. The US Department of Justice requested the assistance of the Belize government to have Titan’s offices searched as quickly as possible to prevent the destruction of evidence.
A magistrate acting under the mutual assistance law granted a warrant to local police officers as well as officers of the Financial Intelligence Unit to search for and seize documents which might be used as evidence.
The warrant was read to Leach, who was on the premises when the officers arrived, but it was not given to him. Additionally, he did not receive a list of items seized by the authorities and Titan’s attorney was not allowed to enter the offices during the search.
While the search was being conducted, Titan was informed, via email, by the International Financial Services Commission that its licence had been suspended. The licence has since expired, and it was never renewed.
In December 2014, Titan filed proceedings in the Supreme Court in which it alleged that the mutual assistance law was unconstitutional and that the search was executed in an unreasonable and oppressive manner, claiming that its constitutional rights were breached.
But the judge disagreed with Titan’s contention that the law which granted the power to conduct the search and seizure exercise was unconstitutional. He found that there were limitations and safeguards within the law which sufficiently protected the public from a breach of their constitutional rights.
He did, however, find that the search was executed in an unreasonable and excessive, but not oppressive, manner. As a result, he concluded that Titan was entitled to compensation and awarded them US$4.46 million, representing 20 per cent of its original claim of US$22 million.
However, the government appealed. The Court of Appeal agreed that the search at Titan was carried out in an unreasonable and excessive manner, but held that Titan failed to show a link between the loss claimed and the constitutional breach. In its view, the taking of the property was not the cause of the shutting down of Titan’s business; it was caused by the suspension and non-renewal of the licence and it therefore set aside the trial judge’s award.
The CCJ agreed with the Supreme Court and the Court of Appeal that the law itself was not unconstitutional, but that Titan’s right to privacy had been violated. It concluded that Titan failed to prove the link between the breach of its constitutional right and the closure of its business.
Like the Court of Appeal, the CCJ was of the view that Titan’s loss was caused by the suspension and non-renewal of the licence and said the Court of Appeal
The CCJ did, however, award Titan BZ$100,000 (US$49,759) in vindicatory damages after it considered the high-handed manner in which the search and seizure operation was conducted.