The government has secretly settled the legal dispute with the collection agency – The Royal Gazette


Updated: 7/9/2022 8:10 am

Gina Stableford, owner of OARRS Inc (Photo by Facebook)

The government has secretly settled a lawsuit brought against it by a company that it allowed to collect taxes on its behalf without a license.

Oarrs Inc filed the civil suit against the tax commissioner’s office last July, alleging it owed nearly $2 million for tax collection services it provided under a contract with the government.

The local company said in its lawsuit that the OTC’s “unlawful and unfair conduct” directly led to it exhausting its available funds and having to lay off its three Bermuda employees.

The OTC fought back, alleging in its defense of the lawsuit that the company committed a crime by collecting the tax without a license, causing its contract to be terminated.

However, Oarrs founder and president Gina Stableford insisted in an affidavit that the tax commissioner had told her that no license was required and that termination of the contract was being considered because of the amount of money owed to the company.

Oarrs dropped his lawsuit in May this year. Any settlement amount paid by taxpayers remains under wraps after the government blocked questions this week.

The government has not released how much it paid Oarrs Inc to settle a civil lawsuit seeking nearly $2 million in damages.

All the Supreme Court filings on the case say is that on May 15 the company received permission from Puisne Judge Larry Mussenden to drop its lawsuit.

But any payout would come from the public purse, so taxpayers could expect David Burt, the Prime Minister and Treasury Secretary, to split the amount.

The disclosure could be made in a ministerial declaration or in response to parliamentary questions in the House of Assembly; it was not shared in response to a request from gazette.

Although the Tax Commissioner’s office was represented by a private law firm, Trott & Duncan, it is a public agency and there will be publicly available records detailing the terms of the settlement agreement.

The Public Access to Information Act may not apply to documents if they have been “obtained or produced” by the Attorneys General under Section 4 of the Act.

The Royal Newspaper requested under Pati in April last year all the records of the contract that Oarrs kept with the OTC and all the reports it had submitted to the Government under the contract.

Tax Commissioner Derek Rawlins announced that between September 2020 and April 2021, the company recovered $12,717,099 and that the company was paid “$99,826.61 to date.”

He said his office received monthly census reports, summary data collection reports and monthly performance reports – although OTC claimed in its defense of the lawsuit that Oarrs “did not provide or failed to provide adequate reports” in breach of his contract.

Mr. Rawlins did not provide the actual records and reports requested by the gazette so we appealed his decision to the Treasury Secretary.

She said last October that the records were exempt while civil court proceedings are ongoing, adding: “Once the matter is fully decided, the Department will process the application appropriately.”

That gazette appealed her reply to the Information Commissioner’s Office and has now asked the PS again for the documents.

Former Treasury Secretary Curtis Dickinson also cited the lawsuit as a reason not to answer a question in Parliament in February about how much Oarrs was reclaimed and how much was due.

The company, founded and run by Gina Stableford, alleges in its lawsuit that OTC refused to pay its bills despite collecting $13.5 million in unpaid government property taxes between September 2020 and June 2021.

The Office of the Tax Commissioner, in a defense filed by the law firm of Trott & Duncan in the Supreme Court, claimed that the contract with Oarrs could not be enforced because the firm carried out the collections service without a license and was therefore “a criminal offence”.

The defense said, “The contract was terminated because it became known that the plaintiff was unlicensed … and was performing the contract in a manner that was both prohibited and punishable …”

Ms Stableford countered in an affidavit that calls and emails with the Tax Commissioner in December 2019 and February 2020 stated that “Oarrs would be acting as the Tax Commissioner’s representative and on that basis … Oarrs did not require a licence…”

Tax Commissioner Derek Rawlins (photo from LinkedIn)

She said the tax commissioner reconfirmed in the summer of 2020 that “no license is required” under the Debt Collection Act 2018.

Ms Stableford said Government officials had made public statements “confirming that Oarrs did not require a license… for work done for and on behalf of the Tax Commissioner”.

Government Senators Lindsay Simmons and Ernest Peets both testified before the Upper Chamber last July that Oarrs is not a collection agency.

Her comments contradict the OTC defense filed last September, which claimed Oarrs had “at all material times been a collection agency”.

The court file viewed by the court gazette shows that the civil dispute was settled on May 16 of this year, but does not reveal why or how it was settled.

The Government and Ms Stableford did not respond to questions from the newspaper.

The Walkers law firm, which represented the plaintiff, said yesterday it would not comment.

The Royal Newspaper It was first revealed on April 7, 2021 that Oarrs was reclaiming millions of dollars in unpaid government property taxes without a debt collection license and without bidding on the contract.

At the beginning of the previous year, the Debt Collection Act 2018 came into force, which required a license for people working in the debt collection business.

The government initially did not comment on a possible breach of its own law by a company to which it had awarded a contract.

But on April 26 last year, a spokeswoman admitted: “The Treasury Department is currently reviewing this contract and the matter is being investigated by Consumer Affairs as the collections agency.”

There was no response to a request from the federal government gazette for an update on this investigation in July last year.

Oarrs filed his lawsuit that same month, seeking damages for OTC’s alleged breach of contract.

The contract Oarrs had with the government said she would receive 15 percent of any property tax arrears collected.

The lawsuit states the company received only $99,829 of the more than $2 million owed.

“Despite numerous claims and months of delay, the defendant has refused to pay the plaintiff’s bills,” the complaint reads.

“The basis for the defendant’s refusal to pay is unclear and in any event inexplicable and inexcusable.”

Ms Stableford said in her affidavit that Oarrs was a “small company that has exhausted its available funds to complete the work under the contract without pay and to fund the early stages of this process.

“Oarrs’ financial difficulties are a direct result of the defendant’s refusal to pay amounts owed under the contract.”

In March of this year, the government refused to give that gazette an update on reviewing the contract, investigating the licensing issue or the Oarrs lawsuit saying the latter is “currently in court”.

Ms Stableford is not believed to have been charged with any license-related offenses.

And today the police confirmed that they had not received any criminal charges.


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