Inadequate legal advice, financial difficulties and “confusing" communications from Government are among the reasons the Royal Yacht Hotel is arguing it shouldn't have been fined any more than £20,000 for a “flagrant and persistent” breach of covid rules.
A £350,000 fine was handed down in the Royal Court earlier this year after it emerged the hotel’s Spa Sirène was open to residents and members of the public between June and September 2020, when emergency covid restrictions prevented saunas, steam rooms and jacuzzis from being used.
Represented by Advocate Michael O’Connell, the hotel appealed the fine before Commissioner Julian Clyde-Smith, sitting with Jurats Charles Blampied, Elizabeth Dulake and Paul Nicolle yesterday (Friday 17 September).
The lawyer said the sentence had been imposed following a “material misunderstanding of certain critical facts” resulting in an injustice that must be corrected.
“Something went wrong in the court below and justice requires this court to intervene in order to correct an obviously unjust outcome,” he said.
Pictured: The Royal Yacht Hotel was fined £350,000 in April 2021.
He explained that the spa facilities, located in the hotel’s basement, were not readily accessible and that even before the pandemic, each guest was required to report and sign in rather than “wander freely”.
Furthermore, he said there was no evidence that anyone had become infected with covid as a result of the breach, saying there had been “virtually no risk to the public”.
Advocate O’Connell told the Court that “trying to pick the bones” out of the relevant legislation had not been straightforward. He suggested the Government’s communication had been “unclear”, giving rise to what he described as “ambiguity and understandable confusion”, even for the prosecution whom he said were “confused about which charge to lay”.
He argued the guidance was open to “more than one interpretation” and the island had faced “a steady stream of confusing communication”.
The majority of the lawyer’s argument focused on the advice the Royal Yacht's previous legal representative, Advocate Stephen Chiddicks, gave to CEO and Chairman James Taylor before the sentencing.
Advocate O’Connell said Advocate Chiddicks had “failed miserably to discharge his duties”, arguing he shouldn’t have taken the case on due to what he described as an “astonishing lack of familiarity” with the processes.
Pictured: Advocate O'Connell was very critical of the advice provided by Advocate Stephen Chiddicks.
While he said it didn’t give him “any pleasure” to be so critical, Advocate O’Connell described the lawyer’s advice as “wholly inadequate”, suggesting a competent lawyer would have given different counsel and ensure their client was “properly equipped to put his best case forward at the sentencing hearing”.
Advocate O’Connell argued that Advocate Chiddicks should have provided evidence to the Court to show why the hotel couldn’t afford a £350,000 fine, which he said would drive it “out of business”.
He said the hotel didn’t have any “surplus cash”, as it still had to pay deferred Social Security contributions and GST as well as its lenders.
He then went on to state that the Co-funded Payroll Scheme had caused the hotel to “bleed cash” because it had to keep paying 20% of its employees’ salaries, and more for those whose salary exceeded the scheme’s threshold, £2,000.
He said the hotel’s cash flow sank by £1.5m because it had adopted the “socially responsible position” of staying open so that its staff wouldn’t be out of a job, and should therefore be “applauded” for keeping its workforce employed when it would have been financially prudent to close.
Advocate O'Connell said the hotel hadn’t made any profits through the opening of the facilities, as no additional charges were applied for their use and the lower court was in error when it concluded the contrary.
Pictured: The lawyer said the Royal Yacht had "bled cash" as a result of the co-funded payroll scheme.
He disputed that the Royal Yacht had received nearly £1.9m through the payroll scheme, saying he was not sure how the court at arrived at that figure during sentencing.
He also questioned the prosecution’s rationale when deciding what fine should be imposed, saying “we are in unknown territory without explanation from the Crown or the court”.
He argued there was no justification to depart from the Court’s usual sentencing policies for health and safety breaches, and said the fine should have been no more than £20,000.
“There is no reason to throw the book at someone just because there was covid in the name of the legislation,” he said.
Crown Advocate Matthew Maletroit told the Court their role was not to decide what fine should have been imposed but rather whether the lower court had come to a fine that was within its range.
He explained that, when setting out a sentence, the Crown considers the culpability of the defendant and their finances, as well as the actual and likely harm resulting from the breach, going on to remind Court that covid was a “highly transmissible disease” that had resulted in death and serious ill health in the island.
He noted that, according to Advocate Chiddicks, it was actually his former client's concerns over commercial sensitivity that had meant information about the hotel's financial situation was not provided to the court - a claim supported by email evidence presented to the Court.
The Crown Advocate said the Crown was unable to make any formal analysis of the hotel’s finances as its financial position remained unclear and that information “almost had to be dragged out of the hotel as time goes on”.
Advocate O’Connell firmly rejected that view, saying Mr Taylor had “bore his soul” in a lengthy statement outlining the hotel’s financial difficulties and its fight for survival since 2008, which had led him to take out private loans of “substantial proportion”.
The Court has reserved its judgment which will be handed down at a later date.
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