Gas station owners get $10m for unlawful 2012 shutdown

A driver pumps super gasoline into his vehicle. - File photo

THE High Court has awarded more than $10 million in combined damages, interest, and vindicatory awards to brothers Prakash and Adesh Maharaj after ruling that the Ministry of Energy and Energy Affairs unlawfully suspended their de facto retail marketing licences in 2012, forcing the shutdown of their service stations and denying them access to their properties.

Master Wrenerson Lochan concluded two related assessments of damages that followed a series of court challenges dating back to 2013.

In May 2020, the Privy Council overturned a majority decision of the Court of Appeal, which had set aside an order of Justice Carol Gobin. Gobin found that the Minister of Energy went beyond his powers when he ordered the two gas stations, owned by the brothers, to be shut down. Adesh Maharaj took over the King’s Wharf station from his father, in whose name the licence was assigned.

After his father died, NP told Adesh Maharaj that it was prepared to treat him as the licensed holder until the licence was reassigned to his name. In Prakash Maharaj’s case, he was granted a retail marketing licence in 2001, had been continually issued a renewed licence until 2010, and his annual fee was paid up until 2012, since up until 2010, renewed licences had not been formally issued by the ministry. His station was in Fyzabad. In November and December 2012, the brothers were accused of breach of the petroleum regulations and impropriety, and the stations were shut down by the ministry.

The brothers denied the allegations, saying the closures were sudden, public, and left them unable to access their premises, equipment, or business records.

Justice Gobin found the ministry’s action was “ultra vires, null and void and of no effect.”

The brothers appealed to the Privy Council, which ruled that the ministry acted outside its authority when it suspended the licences, finding that the claimants were entitled to constitutional damages for the loss of the benefit of their licences.

The Privy Council determined that the brothers held valid de facto licences through payment and acceptance of annual fees and that the ministry had no lawful power to suspend them. The shutdowns made it impossible for the brothers to operate their businesses or access their properties, the apex court ruled.

In the damages assessment, Lochan found that the ministry’s actions, including taking possession of the premises, posting security guards, and denying the brothers access, were directly tied to enforcing the unlawful suspensions. He held that all fuel and non-fuel business losses, along with lost inventory and fixed assets left on the premises, flowed directly from the State’s conduct.

Lochan rejected the ministry’s argument that only fuel-related losses were compensable, noting that the suspension and subsequent takeover of the premises halted all business activity. He accepted the brothers’ unrebutted accounts that officials never safeguarded their assets, conducted inventories, or facilitated the retrieval of property.

In his assessment, Lochan accepted the expert reports of chartered accountant Larry Ramoutar, who analysed audited financial statements, tax returns, business records, and economic data. His reports estimated losses in fuel and non-fuel profits, fixed assets, inventory, and float money for both service stations.

Because the State filed no expert evidence and did not challenge Ramoutar’s analysis through cross-examination, Lochan adopted his findings in full.

From the brothers’ evidence, the State’s actions in suspending their licenses, and the manner in which the suspension was carried out, attracted significant publicity, including reports in the media.

Lochan held that they suffered extensive losses both in terms of assets and business reputation as the nature of the allegations for which purpose the suspensions were effected, being the sale of inferior fuel, tremendously impacted their character in the view of the public and irreparably damaged their reputations as businessmen.

He said the State made little to no meaningful attempts to safeguard the respective premises or their contents while in possession, or to ensure the return of stations or their contents when it realised the suspensions of the licenses were unlawful.

For Prakash Maharaj, operator of the Fyzabad station, the court ordered $4,707,362 in compensatory damage; $150,000 in vindicatory damages; $687,403.82 in interest at five per cent per year from December 31, 2022, to December 2, 2025

For Adesh Maharaj, operator of the San Fernando station, Lochan ordered $4,550,532 in compensatory damages; $150,000 in vindicatory damages; $892,028.94 in interest at five per cent per year for the same period.

He also awarded each brother $125,000 for distress and anguish because of the public nature of the shutdowns, severe reputational damage, and the financial hardships suffered. Lochan described the ministry’s handling of the properties as deeply concerning.

Lochan said the awards were necessary to mark the seriousness of the State’s actions and to deter similar conduct in future.

“Citizens reasonably expect that no officer of the state would arbitrarily interfere with their property without embarking upon a process of law, one which is procedurally fair and consistent with natural justice.

“The manner in which the unfortunate events unfolded speaks for itself.”

The brothers were represented by Vijaya Maharaj at the assessment, while Russell Martineau, SC, Rachael Jacob and Vincent Jardine represented the minister.