The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An ex-Central Bank security guard has won $18,529 for wrongful dismissal after he was terminated for allegedly perpetrating an insurance fraud.

Justice Ruth Bowe-Darville, in an October 29, 2021, verdict found that Lorenzo Deveaux “never intended to misrepresent or perpetrate a fraud” on the banking industry regulator when he changed his name on a vehicle insurance certificate so it matched that on his identification documents.

Describing the “mismatch” between legal and street names as “a somewhat common Bahamian malady”, she found his actions did not amount to gross misconduct and merit the summary dismissal that the Central Bank imposed.

The insurance certificate was significant for the Central Bank because it had advanced Mr Deveaux money to acquire a vehicle. These funds were to be secured on the vehicle, and the monetary regulator wanted to be identified as the “loss payee” to whom the proceeds of any insurance claim should be paid.

However, Justice Bowe-Darville noted that it never bothered to register or stamp any mortgage security, and the failure to do so meant that - under the Stamp Act - this became inadmissible as evidence in court.

Mr Deveaux, in filing his claim, alleged that his April 15, 2013, summary dismissal breached the industrial agreement between the Central Bank and Union of Central Bankers because he was not given the chance to respond to the allegations against him as required by the deal’s grievance procedures.

The Central Bank, in setting out the rationale for its action, wrote: “The bank has received information which indicates that in obtaining a loan from the Central Bank for the purchase of a vehicle, you have misrepresented several elements of the transaction to the bank and acted in a manner which is repugnant to the interest of the Central Bank and which, in the bank’s judgment, constitutes a major breach of discipline.

“The bank considers this a very serious matter and is unwilling to tolerate such impropriety on the part of its employees. Therefore, it has taken the decision to terminate your services with immediate effect.”

Providing more detail on the Central Bank’s rationale, Justice Bowe-Darville said: “He was dismissed summarily on the grounds of having submitted a fraudulent insurance document. The plaintiff admitted that he altered the document by changing his name on the same.

“Mr Deveaux was required to show proof of insurance to the Central Bank as loss payee on a vehicle he acquired through funds received from a chattel mortgage furnished to him through his employment. He explained that he corrected the document to reflect his other known name.”

With the Central Bank’s multiple responsibilities placing it “as the guardian of the Bahamian economy”, she added: “The Central Bank contends that due to its responsibility to both the national and wider international community, its employees must be held accountable and to a higher standard of honesty and integrity.

“The bank claimed that Mr Deveaux’s actions were outright fraudulent, exhibited his lack of integrity, and were inherently repugnant to the standard required by the Central Bank of its employees. Further, the bank maintained that it had dismissed the plaintiff after the conduct of an investigation.”

Justice Bowe-Darville, though, found that the provision of employee loans by the Central Bank was “a secondary arrangement.... Mr Deveaux’s actions did not represent the highest level of integrity. However, by no means was a fundamental aspect of his employment contract breached.

“Additionally, his actions could not be viewed as repugnant to the interest and core function of the bank. Mr Deveaux changed the name on the insurance certificate to his own name; a name that in his estimation matched his identification documents. Unfortunately, the mismatch of legal versus everyday names is a somewhat common Bahamian malady.

“Even more testament to the secondary nature of the whole transaction, the bank did not register or stamp the chattel mortgage document upon which they now rely as evidence of the plaintiff’s purported fraudulent actions... In all events, then, this rendered any evidence related to the chattel mortgage inadmissible.”

Noting that Mr Deveaux’s actions “could have been reconciled by a closer inspection of his identification documents”, Justice Bowe-Darville said: “When put in the balance, the court accepts the plaintiff’s explanation of the different names and believes that he never intended to perpetrate a fraud on the bank......

“While his actions might give way to suspicions of dishonesty they did not admit of gross misconduct and therefore warrant summary dismissal.” As a result, she found that both his contract of employment and the industrial agreement between Central Bank and union were breached.  

However, Justice Bowe-Darville declined to award Mr Deveaux the $97,013 in compensation he was claiming under the Employment Act, instead giving him just $18,529.