Court: Government’s policy on importation of foreign-used vehicles not oppressive

The content originally appeared on: Trinidad and Tobago Newsday

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A foreign-used car dealer has lost a challenge against the refusal by the Trade and Industry Minister to extend the validity of import licences to bring in two vehicles which arrived in Trinidad late because of shipping delays caused by the covid19 pandemic.

In a written decision last week, Justice Ricky Rahim dismissed RBN Auto Dealers Ltd‘s judicial review claim and ordered it to pay the ministry’s costs.

In its claim for declarations and compensation, the dealer claimed the minister applied an “overly rigid policy” for foreign-used imports over three years old.

In October 2021, the company received licences to import three vehicles expected to arrive in Trinidad by November but only got here on January 8.

Two days before the shipment arrived, the company wrote to the ministry seeking an extension of the licence beyond its December 31, 2021, expiry date as two of the three vehicles were manufactured in 2018 outside the ministry’s policy for the importation of such vehicles three years from the date of manufacture.

In its lawsuit, RBN provided evidence received from freedom of information requests that other foreign-used car dealers received extensions to their licences.

In response, the ministry said when the national budget for 2021 was presented in Parliament on October 5, 2020, dealers were given notice of the government’s intention to reduce the permissible age of importation for certain classes of vehicles from four years to three years and of a reduction in the quota.

“The new measures were widely reported in the media and were designed to curb foreign exchange leakage,” the judge pointed out.

He said from the ministry’s evidence, the dealer was told the import licence could only be used for one of the vehicles imported as it was made in 2020 but not the other two manufactured in 2018.

The ministry explained that revalidating the licences would “not only contravene the Government’s revised policy” on the age limit for the importation of cars but would also “undermine the Government’s fiscal and economic strategy to curb foreign exchange leakages.”

In his ruling, Rahim said it was “abundantly clear” from the evidence that the ministry did exercise discretion in relation to revalidating the licence since it was extended for a day for one of the three cars.

“There is therefore no basis for a finding of unlawfulness or illegality as a consequence of fetter of discretion.”

Rahim was asked to determine if the age-limit policy was appropriate and necessary since it was RBN’s argument that the date of arrival should be used to determine the age of the imported vehicle and not the date of manufacture.

On this, Rahim said, “In the court’s view, the restriction on entry by way of date of arrival is appropriate and necessary.

“…The cut-off date ensures that vehicles no older than three years are imported. It is a matter of logic that the importation of older vehicles would make a wider range of vehicles more affordable to a wider range of people thereby increasing the demand for foreign exchange to purchase same.”

On the reasonableness of the policy and the refusal to revalidate the licence, Rahim said “by no stretch of logic” could it be considered to be irrational or done in bad faith.

“It is pellucid that the decision was taken pursuant to an adjustment in government policy in relation to regulating the influx of used vehicles as a tool in reducing the demand for scarce foreign currency. The court’s understanding of the objective of the adjustment in the policy bears repeating.

“When older vehicles are brought into Trinidad and Tobago, their prices are less than newer ones. This means that the demand for them will be higher. Foreign currency is required for the purchase of such vehicles.”

He said to ensure that the policy works, there must be a cut-off date for the importation of vehicles.

“There is therefore a clearly articulated economic or fiscal premise upon which the policy change has been made. The exercise of discretion must therefore be viewed against the backdrop of that economic or fiscal premise to determine whether it defied logic or reason. Suffice to say that the refusal in this case to extend the validity of the licence for vehicles that landed one week after the expiration of the licence does not appear to be a decision that defies logic or reason but more so appears to be in keeping with the general ethos of the measure.”