Judge: Port Authority's ex-CEO fired unfairly in Cabo Star leasing fiasco

The former acting CEO of the Inter-Island Transport Company of the Port Authority will receive compensation arising out of his dismissal in 2018 over issues relating to the procurement of the MV Cabo Star.

On Wednesday, Justice Ricky Rahim ordered the Port Authority to compensate Leon Grant for breach of contract in the sum of $434,625, together with interest of 3.5 per cent per annum, from May 24, 2018-October 18, and his legal costs.

Grant’s substantive post at the time of his dismissal was executive manager, Scarborough and Government Shipping Services. He was also chairman of the authority’s tenders evaluation committee.

The Port Authority claimed it had lost trust and confidence in his ability to discharge his duties because of his alleged failure to disclose e-mails he received from representatives of Baja Ferries on the procurement of the MV Cabo Star.

The e-mails allegedly included the Cabo Star’s particulars and certificates and a request to meet on an offer to charter the vessel.

In his ruling, Rahim said Grant’s dismissal was “without sufficient cause.” He said while it was clear Grant failed to forward e-mails from the Cabo Star’s owners to the port’s secretary, those e-mails did not set out pricing details.

It was Rahim’s findings on the evidence that Grant received the first e-mail from Bridgemans Services Group – the vessel’s broker – on the Cabo Star offer for passenger services, which he sent forward to the port’s secretary, but not follow-up e-mails from Baja Ferries.

“So that it was not the case that the claimant had failed to disclose proposed terms of the charter party.”

Rahim also said, “ It must also be noted that he had, in fact, forwarded the main e-mail that informed the PATT that the owners were interested in dealing directly with PATT.

“This was the pivotal e-mail. The substance of the e-mails must be considered as the allegation of loss of trust and confidence cannot exist in isolation but must carry with it some real consequence of the action of the claimant that would have led to such a loss of trust and confidence.”

Rahim said the authority operated on the basis that dealing directly with the vessel’s owner would have put it at a comparative advantage, as opposed to a broker. However, Rahim said this was “pure speculation” in the absence of proof.

“It may be equally reasonable that an owner may offer the same terms as the broker, thereby profiting from the fee (if any, as there is also no such evidence) that would ordinarily be paid to the broker.

“Certainly, no evidence in that regard has been led before this court to justify the application of such a commercial principle and the burden to do so fell on the defendant.

“The defendant has, therefore, failed to discharge that burden. So that the reason for the alleged loss and confidence appeared to be of no foundation whatsoever and the court so finds.”

Rahim also said from the evidence, it appeared that Grant “made a genuine error” by not detecting the follow-up e-mails, and there was no motive on his part to withhold them.

“It is not, of course, to say that only in the case where the actions of the employee are considered and deliberate can there be a loss of trust and confidence but in the circumstances of this case, this factor when considered with the factors above clearly demonstrated that the claimant’s conduct was not of such a grave and weighty character as to amount to a breach of the confidential relationship between employer and employee and the court so finds.

“The defendant therefore breached the implied term.”

Judge points to PATT board's 'failings' in Cabo Star procurement

Although Grant’s lawyers submitted that the authority needed a “scapegoat” for its handling of the procurement process, so he was made to “take the fall,” the judge declined to comment on the assertion.

However, he said, “...It is, to say the least, passing strange that the report into the procurement process (most of which is not relevant to this case and so has not been set out in large measure) identified several failings of the board which appeared to be of far more adverse consequence to the procurement procedure than the actions for which the claimant was summarily dismissed.”

The judge declined to award punitive damages, saying in his findings that there was no "reprehensible conduct on the part of the defendant to the disadvantage of the claimant, that its actions were not outrageous, high-handed or egregious but were, in fact, misguided and not properly considered."

Grant was suspended on August 15, 2017, pending investigations and also appeared before a joint select committee of Parliament, which also investigated the procurement of vessels for the domestic sea bridge months later in September.

An allegation then surfaced that Baja Ferries e-mailed him directly expressing interest in leasing the Cabo Star for the sea bridge. It had been mentioned by the Prime Minister at the JSC. Grant wrote to the JSC asking for a copy of the alleged e-mails since he was not aware of it.

He also wrote to the authority’s chairman for the e-mails so he could check and clear his name. The e-mail was mentioned in the Christian Mouttet report. Mouttet, a businessman, was appointed by the Cabinet as the sole investigator into the procurement of the Cabo Star and Ocean Flower 2 by Cabinet on August 15, 2017.

Grant said he was at a loss as to why the owner of a vessel would make an offer to him. He was told of an investigation by the Integrity Commission regarding contracts to Bridgemans Services – the broker for Cabo Star – for the provision of ferry services.

On May 24, 2018, Grant was told by the deputy chairman he was fired.

In his lawsuit, Grant maintained there was never a formal charge put to him to answer, and he was unsure of what he was alleged to have done.

In his ruling, Rahim analysed the three sources of information the authority used to make its determination to fire Grant. These included three sets of e-mail exchanges, a December 18, 2017, PriceWaterhouseCoopers report – titled Project Ferry report – and a meeting between the authority’s board and Grant on March 9, 2018.

Grant was represented by Senior Counsel John Jeremie and Timothy Affonso while Vanessa Gopaul represented the authority.