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NBS fails to prove allegations of misconduct against former CEO in appeal case
By Rehanna Ramsay
Kaieteur News – The Guyana Court of Appeal upheld the decision on Friday which essentially stated that former CEO of the New Building Society (NBS) Maurice Arjoon was not culpable of any serious misconduct that warranted his dismissal.
Former CEO of NBS, Maurice Arjoon.
Arjoon and two of his managers were fired on allegations of fraud in 2006 regarding a $69M withdrawal made from the account of Bibi Shamina Khan, a member of NBS at the time. The men endured negative publicity, as well as a trial in the Magistrate Court before they were cleared of the charges.
The former CEO had filed a lawsuit challenging the grounds by which he was dismissed from his job wrongfully. He also claimed that he was set up because of his refusal to sign off on monies of the society to pump into a controversial government project.
Arjoon eventually won the case at the High Court in 2017 when Justice Brassington Reynolds awarded him $79,282,801 in outstanding payments and benefits. The former CEO had originally sued NBS for $550 million for the wrongful dismissal and for pension and other benefits that he said were lawfully due to him.
In addition to the $79 million judgment, Arjoon was awarded $4.1 million for pay in lieu of notice in accordance with Clause 10 of his contract; $16.1 million for severance benefits; and some $59 million for pension — which subsumes a lump sum pension of $17.4 million and reduced monthly pension payments of $372,498 for the rest of his life.
That decision was being challenged in the Appeal Court by NBS. The society through its lawyer Pauline Chase appealed the decision on claims that Arjoon was liable for summary dismissal with benefits due to “serious misconduct.”
NBS had dismissed Arjoon on the basis of dereliction of duty, negligence, and serious misconduct.
However, in delivering the judgment on Friday, Chancellor of the Judiciary, Justice Yonette Cummings-Edwards, who heard the appeal alongside Justices Rishi Persaud and Franklyn Holder said the Court agreed with the original findings of the High Court.
The Chancellor noted that there were two main issues at the centre of the Appeal, which were whether the allegation of serious misconduct for a summary dismissal could be proven against the former CEO and whether Arjoon was entitled to any benefits including pension as a result of his dismissal.
She emphasised that the burden of providing evidential material to prove the allegations of serious misconduct was on NBS but the society failed to do so.
“NBS failed to show just and probable cause for the claims of a summary dismissal…further NBS gave the Court no proof of the serious misconduct that it was alleging…” Justice Cummings-Edwards said, adding that the society also failed to show Arjoon was negligible in his actions since all the evidence before the court pointed to him following all the rules of the society as it related to the withdrawal from the account of Ms. Khan.
The Court noted that Arjoon sat at the helm of a chain of command and there were other staffers beneath him that had the responsibility of ensuring that, “the checks and balances” were adhered to. For their part, Arjoon’s attorneys, Edward Luckhoo, SC, and Robin Stoby, SC, put forward robust arguments that their client was not culpable of any wrongdoing, and that there was no breach of the Society’s rules by Mr. Arjoon.
The lawyers referred to sections of the case that essentially underscores an admission by the society that its system was susceptible to breaches and needed strengthening. In coming to its conclusion, the Court Appeal also agreed with these points raised by Arjoon’s lawyer and dismissed the appeal by NBS.
As it relates to the damages, the Court of Appeal ruled that Arjoon was entitled to his benefits under The Employment and Severance Pay Act (TESPA). However as it relates to the calculation of his pension, the Appeal Court allowed the appeal in part. According to the court’s calculation, Arjoon was only entitled to recover $18 million in pension. The court also awarded costs to the respondent (Arjoon) in the sum of $800,000.
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