By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian mail boat operator’s bid to obtain summary judgment over a $1.881m insurance dispute related to a grounded vessel has been sunk by the Supreme Court.

Justice Simone Fitzcharles, in a June 27, 2025, verdict ruled that a full trial is necessary to determine the validity of insurer concerns over the M/V Legacy’s seaworthiness, and whether its crew were “sufficiently trained and qualified”, when it ran aground on a coral reef near Egg Island, Eleuthera, on February 8, 2023.

And, in rejecting the attempt by Dean’s Shipping to obtain an early victory over its vessel’s grounding, her judgment also noted that the underwriters are alleging that the mailboat operator “incorrectly claimed” the M/V Legacy was Bahamian-flagged and registered on this nation’s shipping registry when it applied for the hull and marine coverage policy.

Carl Bethel KC, the former attorney general, who together with Branville McCartney, the ex-Democratic National Alliance (DNA) leader is representing Dean’s Shipping, accused the five members of the M/V Legacy’s insurance underwriting consortium of creating “red herrings” to “delay, prevaricate and stall” paying the claim under the insurance policy.

However, Justice Fitzcharles, pointed out contradictions in the evidence given by Dean’s Shipping and its majority owner, Ernest Dean. For while they are blaming the M/V Legacy’s grounding on the “negligence” of the captain and chief officer, they also praised the crew for “prudently” adjusting course earlier in the same voyage from New Providence to Abaco when a “sudden tropical squall” blew up.

Dean’s Shipping had moved to obtain summary judgment against the insurance consortium on the basis that they had “no real prospect of successfully defending the claim”. The defendants, Aegis Managing Agency, Liberty Managing Agency, Ascot Underwriting, HCC Underwriting Agency and Amphitheatre Underwriting Agency are all participants in the Lloyd’s of London insurance market.

Lloyds frequently underwrites maritime-related risks in The Bahamas, due to their specialist and high-value nature, and the five defendants countered by arguing that “the seaworthiness or otherwise of the vessel when it was put to sea on the voyage in question” was in doubt.

They are challenging the condition of its navigational equipment; whether a suitable safety management system was in use, including a navigational watch and roster for work and rest; and that the majority of the crew’s training was conducted in Honduras which is not a jurisdiction recognised by The Bahamas for maritime education.

“On February 8, 2023, the M/V Legacy ran aground on a reef near Egg Island, Eleuthera, The Bahamas, miles off the coast of Abaco, The Bahamas,” Justice Fitzcharles wrote. “A claim was made on the hull and machinery insurance policy. However, payment was not forthcoming.”

The M/V Legacy, which carried cargo in the form of containers, shrink-wrapped pallets and ro/ro (roll-on/roll-off) cargo, as well as postal mail and, occasionally, passengers, was eventually freed from the Egg Island coral reef and docked at Arawak Cay.

Freeport-based Bradford Marine valued the repair costs at $1.333m, and Dean’s Shipping is claiming an extra $548,000 as “extraordinary costs, expenditure and economic harm” due to the insurers’ failure t pay the claim. However, the underwriters are challenging this sum, and Justice Fitzcharles said the mailboat operator has provided no evidence to support how the $548,000 was incurred.

Dean’s Shipping, in its evidence, alleged that the M/V Legacy’s grounding occurred at 8am on February 8, 2023, when the chief mate was at the helm. It added that the mailboat was “seaworthy with functional navigational equipment and other redundancies, or back-up equipment”, and it was staffed by a “trained, certified, competent” master, chief mate, chief engineer and crew.

Mr Bethel, in his arguments before the Supreme Court, asserted that the mailboat operator has “always maintained, and the evidence will show, that the grounding of the M/V Legacy was caused by the negligence, if not misconduct, of the captain and chief officer”, identified respectively as Hubert Gale and Tomas Chong Williams.

He also asserted that the M/V Legacy “was at all material times seaworthy” when it departed from Nassau at 8.15pm on February 7, 2023, possessing a Garmin GPS maps chartplotter, magnetic and digital compasses, radar and other “redundancies”. The master and chief officer were also said to have completed the same route to Abaco some 24 times “without mishap or incident”.

Mr Bethel, though, “conceded subtly” that not all the master’s certifications were current at the time of the grounding, although he argued that this was an “administrative matter”. And he dismissed the insurers’ arguments that the master and chief engineer’s certifications were not accepted by the Bahamas Maritime Authority (BMA) as a “red herring”.

The former attorney general argued that the insurers were “well aware that the M/V Legacy was not registered with the Bahamas Maritime Authority and was, instead, licensed with the Port Department under the Boat Registration Act.

And the issue of whether Dean’s Shipping incorrectly claimed the vessel was Bahamian-flagged in its application for the insurance policy was described by Mr Bethel as “an innocent misrepresentation which cannot be relied upon”. He argued that the mailboat operator’s US agent, Brian Rigby, had unknowingly asserted the M/V Legacy was still on the Bahamian registry when it had already been removed.

However, Richard Horton of Alexiou, Knowles & Company, acting for the insurers, said the damage report by Able-Bodied Marine, upon which Dean’s Shipping intends to rely, was only a preliminary assessment of damage to the vessel and does not address the “culpability or negligence” of the master and chief officer.

The insurers, he added, have been able to interview either of the two men, while there is no information on whether the M/V Legacy was seaworthy when it left Nassau on February 7, 2023. “A vast amount of the crew’s qualifications and certifications were obtained in Honduras, a jurisdiction not accepted by the Bahamas Maritime Authority as being the standard for seafarers to sail on Bahamas-flagged vessels,” the Supreme Court judgment recorded.

Justice Fitzcharles, in dismissing Dean’s Shipping’s summary judgment bid, ruled that “the cause(s) and circumstances surrounding the grounding of the M/V Legacy” need to be determined by a full trial as these go to the heart of the dispute over the insurance policy payout.

And she added that the $472,648 payment made by the insurers previously was merely for “the rescue and salvage of the M/V Legacy” from the Egg Island reef and no admission of liability on the consortium’s behalf. The issues surrounding the vessel’s seaworthiness, crew training and the lack of disclosure regarding Bahamian flag status also have to be resolved at trial.

“The question of which regulatory body the vessel was registered with has the potential to be a material term, express or implied, to the hull and machinery marine insurance policy,” Justice Fitzcharles said, adding that this could provide the insurers with a full defence.