The Issue Explained: How legal action is impacting port referendum

Last week the Grand Court ordered a delay in the planned people-initiated referendum on the $200 million cruise and cargo development pending the outcome of legal action. Here we examine some of the key implications of the court verdict and what it means for the poll.

What was the court action about?

Shirley Roulstone, a member of the campaign group CPR Cayman, and the National Trust brought separate applications for leave to appeal for judicial review of the government’s decision to hold the referendum on the cruise and cargo project on 19 Dec. They also sought to have the poll delayed until all relevant information, including an update to the environmental impact assessment, are available. Essentially, they are asking the Grand Court to review the mechanisms government has put in place for the referendum to ensure it is a free and fair vote.

Didn’t they want a referendum?

CPR Cayman was the lead group in the push for a referendum on the project. They are not contesting the referendum itself, they are challenging the legality of the way government has set up the vote. They suggest, in so many words, that government is manipulating the referendum in favour of a ‘yes’ vote for the port.
The judge in the case, Justice Tim Owen QC, summarised the argument being presented by Roulstone’s lawyers, stating, “What is being said is that faced with a spanner in the works, government is rigging the referendum process and stacking the odds against those opposing the development.”

So what did the judge decide about that?

The judge has not made any determination on this issue at this stage. He simply decided, in the face of opposition from government, that the applicant’s case should proceed to trial. The threshold in such hearings is not high. Roulstone’s lawyers simply had to prove that they had an arguable case. The judge acknowledged that government’s lawyers had “advanced strong arguments in opposition to the substance of the case” but he said these were not the “knock-out blows” necessary for the case to be dismissed without trial. A trial date was pencilled in for the week beginning 20 Jan. 2020, subject to Court availability.

Why is the referendum being postponed?

The judge ordered that the vote be delayed at least until the trial had been heard and his judgment has been delivered. That is not likely to happen until first quarter of 2020.

So when is the earliest a referendum could be held?

That’s an open question. No matter what the outcome of the judicial review proceeding, the re-scheduling of the referendum date will remain at the discretion of the government. If Roulstone’s claim is unsuccessful, it could be scheduled as early as 30 days after judgment is handed down, perhaps as early as the end of February. However, if certain aspects of the claim are successful and the question has to be reformulated or campaign financing provisions put in place, it will take government more time to implement those requirements, before re-secheduling the referendum.

Nadia Hardie (front right) of the National Trust, with the Trust’s legal team last week.

There would also be some logistics to organise for the Elections Office and potentially new arrangements for postal votes. In that context, it would seem that the beginning of March is the earliest the referendum could be held. It is also theoretically possible that an earlier trial date could be scheduled or that the parties could come to an out-of-court agreement and the vote could be scheduled sooner.

What is the latest date the referendum could be held?

There is officially no time limit, though government’s lawyers pointed out the constitutional requirement for Cabinet to proceed ‘within a reasonable time period’.

There are the practical and commercial considerations of a $200 million development deal that is on pause pending the outcome of the vote. The judge appeared to acknowledge this, noting that his ruling deferring the referendum applies only until his judgment in the trial is delivered.

If the decision is appealed by either party, he would have to make a fresh ruling on whether to delay the vote further.

Much also depends on what the court decides. If government’s position is upheld or there are only minor tweaks made to the government’s current approach to the referendum, it would be a relatively simple matter to arrange the referendum quickly. However, if the judge rules, for example, that a full update to the environmental impact assessment is required before the people can go to the polls, the referendum could be some time away, perhaps six months or more.

What else will the court consider?

The main points raised by Roulstone’s lawyers centred around the fairness of the phrasing of the question, the lack of an updated EIA on the new design and the lack of campaign-financing regulations. The National Trust, which has now linked its case with Roulstone’s because of the similarity of the environmental arguments, has also contended that independent information and reports should be carried out on the likely success of coral relocation before the referendum is held. So the length of the delay really depends on how much, if any, of those arguments the court accepts.

How long is Verdant Isle prepared to wait?

Government has previously raised concerns that the deal, which it believes is an extremely favourable commercial arrangement for the Cayman Islands, could fall through if there are significant further delays to the project. However, there are still early works, including geotechnical studies, that need to take place before a contract can be finalised, and government’s lawyers did not contest the assertion that a couple of months delay would be unlikely to impact the timeline of the project.
There may be questions for Verdant Isle over how much money it is prepared to continue to invest and how long it is prepared to wait, but there has been no indication from the consortium, at this stage, that they will walk away from the table.

What happens to the newly registered voters who would not have been able to take part on 19 Dec.?

The 220 people who registered to vote before the quarterly deadline for updating the electoral roll on 1 Oct., do not officially become eligible to vote until 1 Jan. They would have not been able to take part in the referendum had it been held on 19 Dec. As there is now no chance that the referendum will take place prior to 1 Jan. 2020, it is expected that they will now be able to vote.

Can I still register to vote?

The next deadline to register to vote is 2 Jan. Those who register by this date will be included in the Register of Electors and will be eligible to vote from 1 April 2020 onwards. There is a good chance that the Referendum will take place in the second quarter of 2020, which means anyone who registers to vote prior to 2 January 2020, should be able to vote in the referendum.

What about people who have already voted via postal ballot?

This may be something that the court is asked to determine. In the interim those votes will be held securely by the Elections Office and if the question or other material elements of the referendum do not change, it is possible that they will be counted in the referendum with all the other votes.
If the question changes then those votes will have to be destroyed and new postal voting arrangements issued.

Broadhurst LLC lawyer Kate McClymont fields questions from reporters outside court last week.

Why is this all so complex?

Part of the problem is that the only legislation that anyone has to work with is the short, somewhat vague section of the constitution, that creates the right to trigger a people-initiated referendum. In the absence of further legislation, government has argued that, legally speaking, it has no obligation beyond that found in the wording of the constitution – that is to respond to public demand demonstrated via a petition of 25 percent of the electorate; make a law for a referendum and for Cabinet to set the question and the date.
Roulstone’s lawyers argue the Government’s obligations go much further.

They say there is an implied obligation for the referendum to be held in a manner that is fair and effective. They argue that this means clear and fair campaign finance rules must be applied and the public should have full access to all relevant information. They claim this will ensure the outcome is not skewed by what they claim is excessive and inaccurate publicly funded campaigning.

Another complicating factor is that this is the first people-initiated-referendum ever to be held in the Cayman Islands or the Overseas Territories. There is no local precedent and few directly comparable international precedents.
“This case plainly involves issues of great constitutional importance for the Cayman Islands – questions which have never been considered before because this is the first time that Section 70 of the Constitution, which provides for a people-initiated referendum has been triggered,” Judge Owen said in his ruling last week.

Will the threshold for a binding result change?

More than 50 % plus one of the registered electors (not of those who turnout on the day) must vote no to the project for the result to be binding on government. Equally if 50 % plus one vote yes, that outcome would be binding on government. This threshold is set in the Constitution and is not contested in the court action.

Will Dec. 19 still be a holiday?

Yes, government has confirmed that this will still be a public holiday.

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