By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bank of The Bahamas is "categorically denying" that it participated in a "malicious conspiracy" against a former Cabinet minister who it alleges had defaulted on some $30.5m owed to it.

The BISX-listed institution, via a statement issued by its attorney, Gail Lockhart-Charles, said it stood by its "comprehensive defence" to the allegations against it by Leslie Miller and his companies despite a Supreme Court justice finding it had "acted in bad faith" and worked together with the Government over the latter's breaches of five leases at the MP's Summerwinds Plaza.

But, reiterating that no damages award had been made against Bank of The Bahamas, Mrs Lockhart-Charles described the judgment delivered by Justice Cheryl Grant-Thompson as a "draft" verdict that only found against the Government for "an abuse of the court process" by providing "no reasonable defence".

"There has been no application for judgment against the bank nor has there been any trial or adjudication of the claims made by Mr Miller and his companies against the bank," Mrs Lockhart-Charles said on behalf of her client.

"The bank takes very seriously the reports in the media that the bank acted in 'bad faith' or 'hand in hand' with the Government. The claims made by Mr Miller against the bank are pending trial and the defence filed by the bank categorically denies these claims."

Although Bank of The Bahamas is 82 percent majority owned by the Government, through the Treasury and National Insurance Board, with the majority of its Board of Directors appointed by it, Mrs Lockhart-Charles said it was "an entity that is independent" of the Government.

She added: "The bank’s decision to refuse to lend Mr Miller and his companies any more money was a decision that was made in the best interests of the bank and its customers. The Bank’s defence asserts that the bank gave notice to Mr Miller and his companies that they were in serious default of their loan repayment obligations and the bank demanded repayment of the entirety of the balance owed under the loan facilities.

"The Bank categorically denies Mr Miller’s allegation that the bank’s demand for repayment of the loans, and refusal to extend further credit to Mr Miller and his companies, was part of a malicious conspiracy scheme to harm Mr Miller."

Mrs Lockhart-Charles continued: "As is set out in the bank’s defence and will be proved at trial, the size of the debts and the state of persistent default left the bank with no reasonable alternative but to cease providing advances to Mr Miller and his companies.

"The Bank in its defence asserts that the amount of the debt owed by Mr Miller and his companies to the bank was in excess of $30.5m. The bank maintains that there was nothing improper whatsoever in the circumstances about its refusal to extend further credit to Mr Miller and his companies.

"The Bank maintains that Mr Miller’s allegation that the bank acted maliciously and in breach of contract by refusing to extend further sums to Mr Miller and his companies is completely without merit."

Justice Grant-Thompson, in her judgment, noted that the PLP-controlled House of Assembly passed a resolution in 2014 permitting Mr Miller and his companies to enter into rental contracts to lease space to government agencies.

Two leases were entered into for the Summerwinds complex in May and June 2013, but "significant renovations and structural work" were required to make the property ready for the Government agencies.

Financing for the upgrades was obtained from Bank of The Bahamas via a $2.5m "upstamping" of the mortgage it held on Summerwinds, and $185,000 was received by Mr Miller and his companies. However, nothing further was received, and the former MP alleged the bank breached the contract to finance the renovations.

The 2013 leases were replaced by fresh ones agreed between Mr Miller and the former Christie administration in 2016. However, the ex-Cabinet minister argued that the Government now "set them up to fail" by only providing a partial $344,802 advance on a $4.787m rental payment to finance the renovations.

Justice Grant-Thompson said the Government was well aware that Mr Miller and his companies could "ill afford" to finance the renovations themselves. And Bank of The Bahamas, which was government majority-owned and controlled, knew that the lease agreements were "the principal security" for the loan sums that had been advanced.

"It was submitted to me that proof of this is shown in that when the Government sought to rescind the arrangements and provide what I view as technical reasons to end the contractual arrangement, the bank correspondingly sought to liquidate the loan arrangement," Justice Grant-Thompson wrote.

"Both of these parties, the Government and the bank, appeared - if I were to adopt a Bahamian phrase - 'to go hand in hand with each other'." She added that the two sides knew Mr Miller would be placed in "the unenviable position of being unable to fulfill his obligations" if the upgrade funds and rental payments were not made, bringing the contract to an end.

"In my view they did not act in good faith in deliberately withholding the agreed rental advances and, having failed to do so, should not benefit from the consequential breach of contract," Justice Grant-Thompson ruled. "This is one government, and I do not accept that 'the right hand did not know what the left hand was doing'. In my view they were all acting together."