Cayman’s first court case involving private sector pension charges has been adjourned until Monday, 1 August.
The defendants are the company Cayman Flooring and Kitchen Specialists, and the individual Scott Henderson.
Charges allege failure to make contributions to a pension plan for employees and failure to provide required information to the Superintendent of Pensions.
Guilty pleas were entered last year on behalf of the company for the period December 2002 through June 2005. Last week Mr. Henderson personally entered pleas of not guilty for the period February through November 2002.
Magistrate Margaret Ramsay-Hale began hearing evidence last Wednesday (Caymanian Compass, 14 July). Solicitor General Cheryll Richards called ten witnesses before the matter adjourned on Thursday.
All ten said they worked for Cayman Flooring and/or Office Pavilion. Office Pavilion was described as a second company Mr. Henderson was operating. Guilty pleas were entered on behalf of that company for the period July 2002 to July 2004.
As reported previously, one question to be determined was whether Mr. Henderson was the employer at Cayman Flooring. Defence Attorney Clyde has agreed that the defendant was president, but not a director.
Various witnesses referred to Mr. Henderson as ‘being involved in’ Cayman Flooring or ‘taking over’ Cayman Flooring from Mr. Gene Thompson, taking control, or being the new owner or the new boss.
One witness said he met with Mr. Thompson and Mr. Henderson in November or December 2000 and Mr. Thompson said he had sold the company to Mr. Henderson. In cross-examination, he agreed that he never saw any documentation to show that a takeover actually occurred.
Mr. Allen said he was putting the Crown to proof because there was a difference between witnesses’ perceptions and what the legal reality was.
He also indicated a defence of reasonable excuse.
According to the National Pensions Law, an employer who fails without reasonable cause to provide a pension plan or make contributions to a plan for an employee is guilty of an offence.
One witness said when he worked at Cayman Flooring his duties were to prepare the employees payroll and do cash projections for the company.
He said there were arrears in the company paying in pension contributions and ‘everyone’ knew it. He told the court that at a general meeting Mr. Henderson assured staff that pensions would be paid, but he did not give a reason why they had not been.
The witness’ own observation was that the money wasn’t there to pay.
Mr. Allen asked him if the company were solvent. The witness said that, from what he knew, expenditure was greater than income; from a total cash position, the company would not be solvent. But there were other property assets that would be included in a test of solvency.
An accountant for Office Pavilion told the court that in March or April of 2004 Mr. Henderson asked him to go through records for both Office Pavilion and Cayman Flooring and prepare a report on how much was owed to the pension fund.
This witness said he was able to go back as far as 1 February 2002, so he prepared spreadsheets from that date until 1 February 2004.
According to his information, the total pension contribution for Cayman Flooring employees was $101,677.88. For Office Pavilion, the pension amount was $38,889.33.
Asked if the company would have been able to pay, the witness said there was not sufficient cash, but Mr. Henderson would have had net assets exceeding $140,000.
Several witnesses gave evidence that pension contributions had been deducted from their pay. At least two told the court they had lost their pay slips in Hurricane Ivan, which caused so much destruction in Cayman in September 2004.
Ms Richards indicated that the next witnesses would come from the Pensions Office.