A judge’s dismissal of a lawsuit by the Motor Insurance Bureau Association which challenged the State for permitting the levying of more than $1 billion in motor insurance premium taxes since 2008 to compensate accident victims of uninsured drivers but has not dispersed those funds, has been upheld by the Court of Appeal.

In a written ruling, Justices of Appeal Prakash Moosai, Charmaine Pemberton and James Aboud upheld the ruling of Justice Ricky Rahim in 2017.

Rahim held the association’s claim, which was also supported by Davindra Maharaj, was misconceived, devoid of a legal foundation and there was no evidence the Minister of Finance or the Board of Inland Revenue acted unreasonably to permit the levying of insurance premium taxes to compensate victims of uninsured drivers.

Maharaj and the bureau argued that the levy was contrary to the legal purpose of the Miscellaneous Taxes Act and that the enrichment of BIR was unjust since the motor insurance premium taxes were collected for purposes which are contrary to the act.

Maharaj also sought to have the $5,456 which was collected from him repaid.

The association sought a declaration that the failure of the ministry to establish a Motor Insurance Bureau for disbursing funds to the victims while it actively allocated funds for the compensation of the said accident victims was unreasonable.

Both parties sought an order for the ministry to pay into court the monies collected since 2008.

In the 2008 budget presentation, the then-minister of finance announced that a fund would be established to compensate accident victims of uninsured drivers. To date, a total of $1,0646,905,472 has been collected from motorists but none has been paid out.

The State has not been able to disburse any money from the fund because of a lack of the requisite legal instruments to authorise payments. As a result, the fund has stood dormant and since 2017, no further sums have been allocated.

Pemberton, who delivered the ruling, said Rahim’s judgment could not be faulted as it was “well-reasoned.”

She also noted the evidence of the former permanent secretary of the Finance Ministry, now Ambassador Vishnu Dhanpaul’s evidence that to establish the fund, separate and apart from the Consolidated Fund, there needed to be legislation for that purpose.

In the absence of any legislative grounding, the funds collected went to the Accident Victims Compensation Fund Suspense Account. Dhanpaul said allocations to the vote titled Accident Victims Compensation Fund were based on an estimated revenue taken from the insurance premium tax, the money transferred to the suspense account was not the same collected by the BIR from payment of the insurance premium tax. The latter has been deposited into the Exchequer Act and automatically forms part of the Consolidated Fund.

Rahim held that the Exchequer and Audit Act provided for funds collected as taxes to be deposited into the Consolidated Fund which is controlled and managed by the minister.

“The money collected as an Insurance Premium