Bahamas and Cuba to battle on $90k cheque


Tribune Business Editor


A Supreme Court judge has ruled that the Bahamian and Cuban governments must battle to resolve a 24 year-old legal dispute over a $90,000 cheque.

Senior justice Deborah Fraser, in a March 27, 2024, verdict, determined that the Government - through the Treasurer and the Attorney General - should replace the initial corporate plaintiff on the basis that it was struck off the Companies Register and ceased to exist as of August 23, 2019.

The legal justification for her ruling was based on section 273 of the Companies (Amendment) Act 2019, which mandates that assets and property belonging to a dissolved company “vest in the Treasurer for the benefit of The Bahamas”. With Dom’s International Importers now struck off, its claim to the disputed $90,000 sum now passes to the Government as a potential asset should it win the legal battle.

However, standing in the Treasurer’s way is Havanaturs (Bahamas), the Cuban government-owned travel agency, which senior justice Fraser ruled should be “joined” as a party to the action given its competing claim to the near quarter-of-a-century old cheque.

Havanaturs (Bahamas), which has facilitated travel to Cuba for thousands of Bahamians and foreign nationals from its East Bay Street offices, is alleging that a former manager “removed a blank cheque book” without authorisation and used it to obtain $100,000 for himself as “compensation for wrongful dismissal”.

As a result, the travel agency is asserting that the $90,000 belongs to it. The judgment reveals that, at end-August 1999 when the events giving rise to the dispute occurred, Havanturs (Bahamas) was flush with cash having more than $1.91m split between its two bank accounts.

The legal battle was triggered more than 24 years ago on January 7, 2000. This was when Dom’s International Importers initiated an action against the then-CIBC Bahamas (this was before the Barclays deal) accusing it of “breach of contract” for not honouring a manager’s cheque made payable to itself.

The cheque, for $90,000 and dated August 31, 1999, was made payable by the former Havanaturs (Bahamas) manager, Mr Garcia, and endorsed to Dom’s International Importers but CIBC (Bahamas) did not honour it when it was presented for payment on September 3, 1999.

The Canadian-owned bank, in its legal reply, requested that the travel agency replace it as defendant. Floyd Watkins, the late former Delaporte MP and Havanturs (Bahamas) then-attorney, alleged in a November 2000 affidavit that Mr Garcia “claimed $100,000 as compensation for wrongful dismissal against Havanaturs and retained a blank check.

“A year after his dismissal, Nelson Garcia used the blank cheque to purchase the manager’s cheque to compensate himself. Mr Watkins further averred that Havanaturs’ bank account was suspended and ceased to be operational from November 1998 to August 1999,” senior justice Fraser recorded.

However, following a further flurry of legal filings, the cheque dispute “became dormant” for 17 years after 2003. It was revived on July 30, 2020, when Havanaturs (Bahamas) filed its “intention to proceed” even though Dom’s International Importers - not itself - was the named plaintiff in the matter.

Following failed bids to obtain summary judgment, and have the case struck out for want of prosecution, the Cuban government-owned travel agent sought to be “joined” as a plaintiff against CIBC (Bahamas) and replace Dom’s International Importers in this role. It also demanded that the bank pay it $90,000, and argued that the case should be decided solely on the evidence it had presented.

CIBC Bahamas, in its evidence said it had “no interest” in the $90,000. It was allegedly told by Havanturs (Bahamas) in August 1999 not to honour the cheque because it was not authorised by the company, a position that was reiterated by the late Mr Watkins, who “undertook to indemnify CIBC against any claims, losses or damages for which it might suffer as a result of not honouring the said cheque”.

Dom’s International Importers principal was identified as Don Brown, and CIBC pledged that it “does not collude in any manner” with either party and was willing to hand the $90,000 over to the rightful party as determined by the Supreme Court.

Mr Watkins, in evidence filed in November 2000, asserted that “upon his departure, Mr Garcia claimed compensation for wrongful dismissal in the amount of $100,000. Havanaturs repudiated that claim whereupon Mr Garcia without lawful authority removed a blank cheque book of Havanaturs.

“Due to Mr Garcia’s failure/refusal to return the blank cheque, the then-manager for Havanaturs, Jorge Pensado, made a formal complaint to the police..... Mr Watkins was surprised that Mr Garcia was able to purchase the bank draft from CIBC when CIBC was fully aware of the situation involving Mr Garcia’s departure from Havnaturs one year earlier.

“The bank draft number 0176819 made payable actually to ‘Nelson Sarsia’ in the amount of $90,000 was induced to be drawn by Havanaturs as a result of fraudulent misrepresentations made by Mr Garcia.”

However, before deciding whether Havanaturs (Bahamas) should be joined as a party to the action, senior justice Fraser found: “As Dom’s International Importers has been struck off the Register any assets that it may possess are now vested in the Treasurer of The Bahamas.

“This necessarily means that, as Dom’s International Importers’ former directors/representatives have not come forward in relation to this matter, I believe the only appropriate action is for the treasurer of the Commonwealth of The Bahamas (and, of course, the Attorney General) be joined to this action before any further action transpires.

“There is $90,000 in abeyance and it is unclear if the funds belong to Dom’s International Importers or to Havanaturs..... I believe the appropriate step in this matter is to have the Treasurer of The Bahamas joined in the action to make any representations it may wish to make relating to the $90,000, which it may or may not be entitled to in these proceedings,” she continued.

“Based on the evidence before me it may well be that Havanaturs is entitled to the $90,000 and, as such, I shall join it in the action.... As Havanaturs has a vested interest in the matter and would like the matter to be determined, I shall order that it serve this order and all pleadings and applications filed herein on the Treasurer and the Attorney General within 21 days of the date of this hearing.”


Use the comment form below to begin a discussion about this content.

Sign in to comment