Paymaster loses appeal against Postal Corp over contract termination

PAYMASTER JAMAICA Limited has lost its appeal against the Postal Corporation of Jamaica for terminating its bill payment contract and transferring the business to Bill Express operated by Grace-Kennedy Payment Services.

The Postal Corporation said it terminated the contract because of outstanding commission payments of $3.3 million.

Paymaster’s appeal challenged the refusal of Supreme Court Justice David Batts to allow it to seek a judicial review of the decision to terminate the contact, which began in year 2000.

Telecommunications firm Digicel, which has since acquired Paymaster, says it was reviewing the decision, but had no other comment, when asked if it would appeal further.

In the Court of Appeal decision written by Justice Jennifer Straw, on behalf of the three-member panel, the judge noted that Paymaster is the pioneer of a third-party bills collection system in Jamaica providing bill payments, money and data transfers and other transactions to the public.

In 2000, the parties engaged in a contrac t for the Postal Corporation to act as sub-agent to provide the services Paymaster offered. At that time, Paymaster was the only entity which provided those services.

In September 2011, the parties renewed the contract for three years up to August 2014.

However, on August 16, 2013 the Postal Corporation wrote to Paymaster indicating its decision to terminate the contract within 90 days, as provided by their contractual agreement.

Eight days later, on August 24, then chairman and managing director of Paymaster, Audrey Marks, and other representatives of the company met with Ian Kelly, chairman of the finance committee of the Postal Corporation, along with other officers in an effort to have the board reconsider its decision to terminate the contract.

Marks was informed that the issue which led to the termination notice concerned outstanding commission payments of $3.3 million that was owed to the Postal Corporation.

She committed to resolving the issue by making five equal instalments, and her evidence was that Paymaster submitted the first payment of $663,000 followed by a second payment on September 27, 2013.

However, in October 2013, the Postal Corporation terminated the contract and entered into a contract with Grace-Kennedy Payment Services/Bill Express to take effect on the weekend of November 15-17, 2013 for the provision of the services previously contracted with Paymaster.

However, Paymaster filed an application on November 1, 2013 seeking leave to apply for judicial review of the decision.

It also sought an injunction against the Postal Corporation to restrain it from continuing negotiations with GKPS/Bill Express until the issues have been heard and determined.

Justice Batts heard the applications and dismissed them.

In December 2013, Paymaster filed a notice of appeal against the decision of Justice Batts.

However, the Court of Appeal said it was difficult to conclude that Justice Batts misinterpreted the facts when he found that uncontradicted evidence supported the view that the Postal Corporation declined fur ther arrangements with Paymaster due to the unreconciled payments between April 2007 and March 2013.

Ambassador Marks developed and launched the proprietary bill payment system in Jamaica in 1997. Digicel Group acquired majority control of the company in December 2015.