NASSAU, BAHAMAS — The Court of Appeal of The Bahamas has rejected an appeal by the now-defunct Sky Bahamas Airlines, upholding a lower court ruling in favor of AOG Maintenance Company in their long-running dispute over a lease agreement and unpaid rent.
Former Sky Bahamas CEO Captain Randy Butler, commenting on the decision, told Eyewitness News: “I appealed the case because I know what the facts are, and I was present, so I still disagree with the ruling.”
Sky Bahamas had appealed the June 9, 2023, judgment of Justice Diane Stuart. Central to the issue was an Annual General Meeting (AGM) held on December 17, 2018, during which it was resolved that Sky Bahamas and AOG Maintenance would enter into a formal lease agreement for the hangar, starting January 1, 2019, for a three-year term. Although a formal lease was prepared, it was never signed, leading to eviction and legal action. Sky Bahamas then filed a claim for breach of contract and unlawful detention of assets, arguing it was the true sub-tenant of the property, not AOG Maintenance.
However, Justice Stuart ruled that the oral lease was valid and binding, finding that Sky Bahamas had failed to pay the rent due from January 1, 2019, to the trial date. AOG Maintenance, which purported to own the hangar, had leased it to Sky Bahamas for $26,000 per month.
The judge rejected Sky Bahamas’ counterclaim for breach of contract and unlawful detention of assets, upholding AOG Maintenance’s position as the rightful sub-tenant. The court ordered Sky Bahamas to pay special damages of $219,928.76, as claimed by AOG, with interest at a rate of 1.5 percent from the start of the legal action to the date of judgment.
The Court of Appeal affirmed the trial judge’s ruling, noting that Captain Butler’s claim that Sky had no obligation to pay rent because he never agreed to the lease was contrary to the testimony of AOG’s two witnesses, both present at the relevant AGM. The appellate court also upheld the rejection of Sky Bahamas’ claim for compensation for alleged excessive distraint, citing a lack of evidence. Sky Bahamas’ attorneys had contended that AOG sold aircraft parts, allegedly belonging to Sky Bahamas, valued at $930,000, despite the rent owed being around $219,000. However, the Court of Appeal found no evidence to support the excessive distraint claim or the $930,000 sum, emphasizing that, with the equitable lease deemed valid, AOG had the legal right to seize assets for unpaid rent.
