The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former Grand Bahama Port Authority (GBPA) chairman’s bid to be removed as a defendant in an $82,300 claim brought by three ex-employees of his insolvent BISX-listed company has been rejected by the Supreme Court.

Justice Petra Hanna-Adderley, in a May 13, 2022, ruling found that Hannes Babak should not be struck out as the “validity” of claims he had “guaranteed” that the trio would be paid their due severance needed to be determined at a full trial.

Daniel Mitchell, Nathaniel Hield and Washington Carey launched their action against the former GBPA chair, and his now-defunct Freeport Concrete Company and The Home Centre entities, on June 9, 2017, in a bid to enforce an Industrial Tribunal ruling from earlier that year that they and other former workers were owed redundancy pay following their terminations.

Mr Mitchell is claiming $55,100, with Mr Hield and Mr Carey asserting they are due $15,100 and $12,100, respectively. The trio subsequently obtained approval on February 7, 2019, to alter their claim by adding Mr Babak, Freeport Concrete’s chairman, and who enticed Bahamians to invest in the now-failed company via an initial public offering (IPO), as a defendant.

They justified this on the basis that, after informing the trio of their terminations on June 21, 2010, Mr Babak allegedly said “they would not be immediately paid their severance pay” by Freeport Concrete. Instead, he promised this would happen “upon completion of the sale of the assets” of Freeport Concrete and told the trio “he will see to it” they were paid what was due.

The three alleged that Freeport Concrete/the Home Centre’s assets were being sold up until 2018, but Mr Babak refused to ensure they received their severance pay “in breach of the undertaking and/or guarantee he had given”.

Mr Babak and his attorneys, Davis & Company, responded by trying to have him struck out as a defendant on the basis that he had been “improperly and unnecessarily made a party to the action”. They also argued that the move by the employees was statute-barred and that the ex-GBPA chairman had “no nexus” to Freeport Concrete and The Home Centre.

Legal documents filed on Mr Babak’s behalf by attorney Andrew Edwards, who is now Public Hospitals Authority (PHA) chairman following the September 2021 election, alleged that Mr Babak was “not a proper party to the proceedings” as he was not a party to the three workers’ employment contracts.

Mr Edwards added that Freeport Concrete and The Home Centre were “in involuntary liquidation”, and there were several creditors and liabilities that still have to be satisfied. He added that there was nothing to justify “piercing the corporate veil” and adding Mr Babak as a party to the proceedings as there were no allegations of fraud and wrongdoing.

And Mr Edwards also argued that the action was statute barred under the Limitation Act, as it had been filed outside the time prescribed in law for doing so. Mr Babak also denied giving a personal undertaking to pay the due severance.

James Thompson, attorney for the former workers, argued that Mr Babak was acting as an agent for Freeport Concrete. And Justice Hanna-Adderley found that the issue of the oral guarantee needed to be determined by a full trial before the Supreme Court, ruling that the claim was not statue barred because, although the undertaking was given seven years ago, it only became “enforceable” when Mr Babak allegedly refused to pay.

“I find that these are factual issues that have yet to be determined, and the only way in which the validity of the same can be determined is by a trial,” she ruled. “I find that it is necessary for [Mr Babak] to remain a party to this action in order for the court to effectually and completely adjudicate upon and settle all the questions involved in this matter.”