NASSAU, BAHAMAS — A Supreme Court judge has ruled that Canadian businessman Fred Kaiser failed to prove fraud allegations against former Sky Bahamas CEO and former Deputy Prime Minister K. Peter Turnquest while determining that the latter breached his statutory fiduciary duty and duty of care and diligence.
Kaiser had accused Messrs Tunrquest and Butler of conspiracy to commit fraud, alleging that their actions resulted in him losing the collateral on a mortgage. Kaiser claimed that between 2005 and 2007 his company Alpha Aviation lent both Mr. Turnquest and Mr Butler $279,000, which was to be repaid at four percent interest over 20 years, secured by a mortgage at Winton Heights Estates subdivision. Later in 2007, Alpha Aviation extended an additional loan of $120,000 to both Mr Turnquest and Capt. Butler, the first and second defendants in the matter respectively, as a further charge against the Winton property, again at four percent interest combined with other terms. At the time, Mr. Turnquest was Alpha Aviation’s director and manager, while Mr. Butler and his wife, listed as the third defendant, were mortgagors of the property.
Mr Kaiser contended that Messrs Turnquest and Butler conspired to defraud Alpha Aviation of the outstanding balance owed under a mortgage agreement and that Turnquest, as manager and director of the company, breached his fiduciary duty by executing a Deed of Release in relation to the said mortgage without first securing payment of the money owing under the mortgage. Kaiser further alleged that in December 2008, the Butlers conspired to deceive Alpha Aviation by selling their ownership of the Winton property to Antoine Smith and Tiffany Smith; however, they failed to disclose the existing mortgage on the property in the conveyance document.
Justice Carla Card-Stubbs found: “In this case, the Plaintiff failed to prove an agreement between the defendants and therefore the conspiracy claim failed. However, having regard to the sole acts of the director in this case, he is liable for breach of fiduciary duty. No damages are recoverable where the breach of duty does not cause a measurable loss.” The judge noted that in procuring the execution of the Deed of Release, and in executing the same himself without ensuring that the loan was paid off at the time of the execution, Mr. Turnquest acted against the company’s best interest and thus she ruled that he failed in his fiduciary duty to the company to act in its best interest.
Justice Stubbs also noted that while Mr Kaiser had lost the security by which he could enforce loan payments, potentially adding difficulty to his ability to recover the sums outstanding under the loan, he had not lost his entitlement to the sums outstanding. She noted that the Deed of Release extinguished the security but not the debt; therefore, there is nothing to prevent him from recovering the full sums outstanding once proven.
Turnquest responding to the ruling stated: “I am pleased The Bahamas Supreme Court has rejected the claims against me by Mr. Fred Kaiser and Alpha Aviation. I have emerged victorious against their baseless allegations of conspiracy. Despite also facing an unjust breach of fiduciary duty claim, the Court’s decision not to impose any financial penalties on me serves as a resounding affirmation of my defense. Whilst disappointed with the Court’s characterization of my testimony concerning the breach of fiduciary duty claim, I maintain and continue to maintain, that I gave truthful testimony under oath. This victory not only vindicates me – but also stands as a testament to the enduring power of truth and integrity in the face of adversity. I remain committed to serving my community with honor, transparency, and unwavering dedication. I am happy to put this matter behind me and look forward to moving on.”
