The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

BANK of The Bahamas will soon know the fate of its “two highest risk litigation matters” that both involve former Cabinet ministers, its chairman has revealed to shareholders.

Wayne Aranha, writing in the BISX-listed institution’s just-released annual report, said it continued to vigorously contest the separate claims mounted by Leslie Miller and Damian Gomez QC that collectively involve sums worth more than $36m.

The Court of Appeal will rule on January 8, 2021, on the bid by companies 50 percent owned by the family trust of Mr Gomez, former minister of state for legal affairs under the last Christie government, to overturn a prior verdict that set aside the $6m-plus default judgment they had previously obtained against Bank of The Bahamas.

“On October 21, 2019, the judgment in default of defence entered against the bank, and in favour of the Kaydee plaintiffs, in excess of $6m, was set aside by the deputy registrar,” Mr Aranha wrote. “The plaintiffs subsequently appealed the decision, which appeal was heard on September 4 and 29, 2020. The appeal ruling is scheduled to be handed down on January 8, 2021.”

Companies that are jointly owned 50/50 by the family trusts of Mr Gomez and David Jennette had initially obtained a default judgment against Bank of The Bahamas on March 31, 2016, after it failed to appear in response to the action they filed over a mortgage loan dispute.

The four disputed loans, which were secured on real estate controlled by the trusts’ companies, totalled some $7.659m. That first default ruling was set aside prior to then-acting Supreme Court justice, Andrew Forbes, ordering that the dispute proceed to trial in traditional fashion before the Supreme Court.

While the companies owned by the family trusts filed their case in accordance with the judge’s orders, Bank of The Bahamas failed to submit its defence, leading to another default ruling. That was granted three years ago in October 2017, and the family trusts of Messrs Gomez and Jennette subsequently obtained a multi-million damages award Bank of The Bahamas on March 7, 2019, before moving to enforce it.

However, despite being branded “careless and negligent” in its approach to the case, Bank of The Bahamas and its attorneys, Callenders & Co, persuaded Stephana Saunders, the Supreme Court’s deputy registrar, to find there was sufficient “merit” in its defence to set aside the second default judgment.

“The most important issue is whether the defence has a meritorious claim and, in my determination, it does. I conclude that the nature of the claim should be fully ventilated at trial when all of the evidence would be heard and perused, orally and in written documents,” the deputy registrar found.

“At this juncture, the court has only one side of the story, and that is the plaintiff’s side. Setting the judgment in default of defence aside will allow the entire claim to be examined and justly adjudicated. It would permit the defendant and the plaintiff’s claims to be properly reviewed and assessed by the court.”

As for the case involving Mr Miller, the Bank of The Bahamas chairman said all parties had made submissions to the Supreme Court on November 20, 2020, over an earlier draft ruling that was leaked publicly. He added that Justice Cheryl Grant-Thompson had pledged not to “perfect” her verdict before hearing from all sides.

“In September 2020, the judge having carriage of the Miller case issued a draft ruling on the application made by the plaintiffs [the former minister and his companies] for judgment against the attorney general and the treasurer of the Commonwealth of The Bahamas, awarding judgement to the plaintiffs for a sum in excess of $9.8m,” Mr Aranha wrote

“The draft ruling, which was only intended to be circulated to the parties’ counsels for review before being finalised, entered the public domain and, thereafter, was printed in several of the local dailies. The bank took exception to certain comments and assertions in the draft ruling and, through its attorneys, pointed out the inaccuracies and misstatements to the court and to the media.

“The court has scheduled further hearings for November 20, 2020, to consider submissions from all parties on the matters that the bank has taken exception to, and the court has indicated that the ruling will not be perfected before the parties have been heard on the matter.” Details of what happened at the November 20 hearing were not revealed, and could not be obtained despite this newspaper’s efforts.

Bank of The Bahamas had previously “categorically denied” Mr Miller’s claims that it participated in a “malicious conspiracy” against the former Cabinet minister, who it alleges had defaulted on some $30.5m owed to it.

The BISX-listed institution, via a statement issued by its attorney, Gail Lockhart-Charles, said it stood by its “comprehensive defence” to the allegations despite the draft verdict finding it had “acted in bad faith” and worked together with the government over the latter’s breaches of five leases at the MP’s Summerwinds Plaza.

Reiterating that no damages award had been made against Bank of The Bahamas, Mrs Lockhart-Charles described the judgment as only finding against the government for “an abuse of the court process” by providing “no reasonable defence”.

She said: “The bank’s decision to refuse to lend Mr Miller and his companies any more money was a decision that was made in the best interests of the bank and its customers. The bank’s defence asserts that the bank gave notice to Mr Miller and his companies that they were in serious default of their loan repayment obligations, and the bank demanded repayment of the entirety of the balance owed under the loan facilities.........

“As is set out in the bank’s defence and will be proved at trial, the size of the debts and the state of persistent default left the bank with no reasonable alternative but to cease providing advances to Mr Miller and his companies.

“The bank in its defence asserts that the amount of the debt owed by Mr Miller and his companies to the bank was in excess of $30.5m. The bank maintains that there was nothing improper whatsoever in the circumstances about its refusal to extend further credit to Mr Miller and his companies.”