The Tribune

• Airline’s financier ‘elated’ at Supreme Court verdict

• Now readies to move for ‘assessment of damages’

• Appeal likely as deputy registrar slams ‘delay tactics’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Sky Bahamas’ former financier was yesterday said to be “elated” that the Supreme Court has upheld the default judgment he obtained against its principal over an alleged $28m “bogus loans conspiracy”.

Michael Scott QC, the attorney for Fred Kaiser, told Tribune Business he will now seek judicial direction for “an assessment of damages” to be awarded to his client after the Supreme Court’s deputy registrar scolded Captain Randy Butler for employing “delaying tactics” in battling the claims against him and the airline.

Carol Misiewicz, in yesterday’s ruling, refused to set aside the default judgment entered against Captain Butler, Sky Bahamas and Aviation Oversight Group on January 25, 2021, after finding they twice waited until “the 11th hour” to seek Mr Kaiser’s permission for extra time in which to file their defence to his allegations.

Ruling that they were “in clear contravention” of the Supreme Court’s rules, Ms Misiewicz also dismissed assertions contained in a letter from Captain Butler’s attorney that COVID-19 and his client’s location in Andros were disrupting their ability to craft and file a defence on time.

Mr Scott, when contacted after Tribune Business obtained a copy of the verdict, said of the outcome: “My client is elated, and he’s grateful for the excellent and succinct judgment of the registrar. He hopes at last that justice will be served.

“Subject to their [Captain Butler’s] right of appeal, the next steps will be to get directions to proceed to an assessment of damages” against Mr Kaiser and his two companies, Alpha Aviation and Advanced Aviation. It is at this stage that the former Sky Bahamas financier will place all evidence, including accounting and other technical issues, before the court in a bid to be awarded due compensation.

Michael Horton, the attorney for Captain Butler and Sky Bahamas, indicated to this newspaper there will likely be an appeal but did not confirm this as he has yet to discuss the deputy registrar’s verdict with his client.

“I’ve got to take Mr Butler’s instructions on that. The matter is still afoot,” he said. “We’re not finished with the registrar yet. There are opportunities for taking the matter further. It’ll be developing, I’m sure.”

Captain Butler could not be reached for comment before press time last night, despite Tribune Business making multiple calls and sending text messages to him.

Ms Misiewicz, noting that Mr Kaiser had served legal proceedings on Captain Butler and Sky Bahamas on November 19, 2020, said the duo had 28 days - until December 17 last year - to file a defence to the claims against them.

Mr Horton filed “appearances” for them and Aviation Oversight Group with the Supreme Court on December 4, 2020, but did not communicate with Mr Scott until the December 17 deadline day when he asked that his clients be given until end-January 2021 to file their defence.

Mr Scott gave Captain Butler and his attorney “a considerable extension” until January 22, 2021, together with “the explicit warning that no further extensions would be agreed”. However, the former Sky Bahamas principal and his attorney again waited until that deadline was upon them before requesting “further and better particulars” of Mr Kaiser’s allegations via five pages of questions.

Mr Scott entered the judgment in default of defence against Captain Butler and Sky Bahamas some three days later, sparking their efforts to overturn it. Mr Horton, during the hearing before Ms Misiewicz, argued that the default judgment “was premature and therefore irregular” because the call for more details on the case against his client had not been addressed.

However, the Supreme Court’s deputy registrar ruled that this assertion “does not avail them” because Captain Butler and his attorney had failed to comply with Supreme Court rules governing how “further and better particulars” must be sought.

Turning to Captain Butler’s argument that he was unable to instruct Mr Horton on his defence because he had caught COVID-19 and was quarantined on Andros, Ms Misiewicz added: “I do not see how he or the other defendants were able to instruct their attorney on the extensive questions contained in the ‘further and better particulars’ summons but not be able to give instructions on any kind of defence.

“Furthermore, it is notable that nowhere in the Butler affidavit is there set out the barest outline of a defence or any grounds of a defence. I was concerned by the serious allegations in the statement of claim. However, the Butler affidavit does not even condescend to contradict or challenge the allegations of fraud, conspiracy or breach of fiduciary duty.

“In point of fact, the submissions by Mr Horton do not address or assert any form or shade or character of a possible defence. He says that the lack of particulars ‘unfairly prejudices’ the defendants but does not show how they are prejudiced.”

Finding that “there have been multiple delays” caused by Captain Butler and his attorney failing to file a defence within the time allowed by the Supreme Court’s rules, Ms Misiewicz said: “Having obtained, at the 11th hour, an extension of time to file, they again delayed until the last day of the agreed extension to act.

“But this time it was not to file a defence as they should have under the agreement. Rather, it was to take a fresh step of filing a summons for further and better particulars. This latter step, being in clear contravention of the rules, could only be seen as a further delaying tactic and not, in all of the circumstances, to be a bona fide step in uncovering some ambiguity or unclear facts arising on the pleadings.”

The claims by Mr Kaiser that he was defrauded of $28m via sham loans triggered the resignation of former deputy prime minister and minister of finance, K Peter Turnquest, even though he was not named as a defendant in the original writ.

Mr Turnquest, who like Captain Butler is vehemently denying the allegations in that document, was described as “a director and manager” of both Mr Kaiser’s companies, as well as “owning and/or controlling and/or managing” Sky Bahamas. The former deputy prime minister, however, is not named in yesterday’s default judgment ruling nor the earlier filing.

Mr Kaiser, whose main business interest, Alpha Technologies, agreed in 2004 to pay some $36m to the Internal Revenue Service (IRS) after pleading guilty to tax fraud, is alleging that Captain Butler and Mr Turnquest engineered a decade-long conspiracy that lasted until 2017 “to enrich themselves” by defrauding his companies while concealing their activities.

The statement of claim, which has been seen by Tribune Business, alleges that the duo “dishonestly caused” Alpha Aviation and Advanced Aviation to “pay away” $20.68m and $5.917m, respectively, to Sky Bahamas via “some kind of bogus loans”.

No particulars were given to describe how the scheme worked, although Mr Kaiser’s companies alleged that Mr Turnquest and Captain Butler then used “some 39 fraudulent invoices and/or book entries, and for no adequate consideration”, to drain away some $3.8m paid by Alpha Aviation to Aviation Oversight Group via 39 separate cheque payments between February 2008 and July 2016.

A further $3.026m was also alleged to have been siphoned off by the duo “as at December 31, 2017, to AOG Maintenance Ltd, a company that owned Sky Bahamas’ maintenance hangar at Lynden Pindling International Airport.

Mr Kaiser and his companies, making it clear that they have come for the monies they believe are due and owing, are seeking a Supreme Court Order that an accounting be done to determine what is outstanding and that this money subsequently be paid to them.