The Privy Council has dismissed an appeal by the Corporation of Hamilton aimed at halting reforms that would bring an end to municipal elections.

While the corporation argued that the Municipalities Reform Act would essentially result in the deprivation of property without compensation, the top appeals court in London found that a change in management or control did not amount to a “taking”.

A written judgment released this morning said: “The corporation has limited powers and rights in relation to the property owned by it; it can use and enjoy its property only to the extent it is empowered to do so by the 1923 Act.

“The corporation continues to own its land and property and it also continues to have day-to-day control over that land and property.

“Regulatory measures which are introduced in the public interest do not amount to the taking of property even if they have an adverse economic effect on the property owners.”

The board also rejected the argument that the Bill would stifle political expression, stating it was “very doubtful” that there was a right to vote in relation to municipal authorities.

The judgment added: “Even if there were such a right, that does not prevent the legislature from abolishing elections or voting rights for municipal bodies that the legislature has created.

“The board rejects the distinction that the corporation sought to draw between the right to vote for a forum that currently exists and the failure to create a forum.”

Zane DeSilva, the Deputy Premier and Minister of Housing and Municipalities, said the decision affirmed that the Government’s plans to modernise the island’s municipalities were lawful.

Mr DeSilva said: “This judgment provides clarity and finality on an issue that has been the subject of legal uncertainty for several years. It allows us to move forward with confidence and a renewed focus on progress and partnership.

“The Government is committed to working in close consultation with the Corporations of Hamilton and St George, recognising their historic importance, community leadership and enduring contributions to Bermuda's heritage and prosperity.

“We will engage constructively with both municipalities to shape the next phase of reform — one that honours their legacy while strengthening governance and service delivery in a manner that is modern, transparent and equitable.”

Mr DeSilva added that the Government was committed to maintaining open dialogue as it considers its next steps to reform the municipalities, stating that the process would be driven by principles of partnership, accountability and public interest.

He said: “Our aim is not merely structural reform, but renewal, ensuring that both the City of Hamilton and the historic Town of St George continue to thrive as vibrant, inclusive and economically resilient communities that serve all Bermudians.”

The civil case was first launched by the corporation after the Municipalities Reform Act 2019 was passed by the House of Assembly.

The amendments gave the minister responsible for the Corporation of Hamilton and Corporation of St George the power to appoint mayors and half the councillors, with the rest of the councillors chosen by a selection committee.

The measures would end municipal elections, transforming both municipalities into unelected quangos.

The legislation was rejected by senators, but the Bill could then be brought back to the House of Assembly and implemented without the approval of the Senate.

The Corporation of Hamilton pressed on with its legal challenge to halt the legislation, arguing that it would be deprived of its property and its right to the protection of law if the Bill and parts of various associated amendment Acts came into effect.

However, it was unsuccessful in the Supreme Court and in the Bermuda Court of Appeal.

The corporation brought the case to the Privy Council, arguing in December 2024 that the legislation was unconstitutional and would infringe upon City Hall’s fundamental rights under the Bermuda Constitution to “property, due process and freedom of expression”.

The Privy Council noted that the relationship between the corporation and the Government had become “turbulent”, but said it had not formed any views about the friction between the parties.

The judgment said: “The board’s task in this appeal is to consider the wording of the Constitution and apply it to the factual position of the corporation as established by evidence which is largely uncontroversial.

“The alleged infringement of the Constitution is said to arise from legislation which will, in effect, transfer control of the corporation from its current elected members to ministers in central government or to new members who have been appointed by such ministers rather than elected to office by the voters of Hamilton.

“The corporation alleges that the existing provisions and proposed amendments to the 1923 Act will thereby expropriate its property without payment of compensation and will interfere with the right of the residents of Hamilton to freedom of expression by removing their current rights to vote for the corporation’s members.”

While the corporation argued that Section 1 of the Bermuda Constitution offered protection from the deprecation of property without compensation, the Privy Council ruled that Section 1 is a preamble and not enforceable.

The board said the corporation had “limited rights and powers” over the properties it owns, stating: “The corporation’s property is not its own to ‘enjoy’ or to do with as it pleases without regard to the municipal or public interest considerations that apply to the exercise of all its powers.

“It can use and enjoy its property only to the extent it is empowered to do so by the 1923 Act.”

The judgment also stated that under the proposed legislation the corporation would retain day-to-day control over its lands and questioned if the corporation had a constitutional right protecting its property.

It added that the interpretation argued for by the corporation could lead to “absurd consequences” if accepted.

The judgment said: “Would the corporation be able to challenge legislation passed by Parliament reorganising local government on the ground that it interfered with the corporation’s right to the protection of its property?

“Would this involve the payment of compensation by one public body to another, for example, by the Government of Bermuda to the corporation? In the event of the outright abolition of the corporation, how and to which body would compensation be payable?

“Must the present arrangements for local government be retained in perpetuity?”