Americana Jamaica Venture v Point Hotels Ltd

• Jurisdiction: Jamaica
• Court: Supreme Court (Jamaica)
• Judge: Smith, J.
• Judgment Date: 11 November 1988
• Docket Number: C.L. A-147 of 1988
• Date: 11 November 1988

Supreme Court

Smith, J.

C.L. A-147 of 1988

Americana Jamaica Venture

and

Point Hotels Ltd.

Appearances

P.J. Patterson, Q.C. and Clark Cousins for the plaintiff.

B. St. Michael Hylton and Garth Patterson for the defendant.

Landlord and tenant - Rent — Non payment of rent — Letter of request — Lease agreement — Clause 3 — Rights available under clause — Purported termination of lease — Agency — Whether demand for more than what is due valid — Finding that demand invalid — Declaration granted.

Smith, J.

1 The plaintiff is the Lessee of a hotel in Ocho Rios by virtue of a lease dated the 31st December 1981. The defendant is the Lessor.

2 The defendant is a wholly owned subsidiary of National Hotels and Properties Limited hereinafter referred to as N.H.P. It is abundantly clear that N.H.P. has at all material times acted as the defendant's agent in respect of the hotel and the lease aforementioned.

3 In letter dated July 22, 1988, and addressed to the plaintiff, N.H.P. stated: “In respect of the three years ended January 31, 1984, 1987 and 1988 there is a total of US$177,000 in unpaid rental”.

4 The amount was made up as follows: Amount due for 1984 — US$62,857; for 1987 — US$153,320; and for 1988 — US$60,825.

5 It seems to be common ground that the rental for 1984 was US$640,000 and for 1987 and 1988, US$700,130 and US$716,768 respectively.

6 The letter continued:

“Clause 3 of the lease requires that all rent due to us be paid free and clear of any deductions. While we are aware that there are certain refurbishment and renovation claims outstanding by you … these claims do not permit you to withhold rent legally due to us …

Accordingly, we are writing to demand payment of the above rent lawfully due to us within thirty (30) days of the date of this letter. The non-payment of this rent is regarded by us as a breach of Clause 3. If you fail to remedy this breach within thirty (30) days of the date of this letter, we will with regret be obliged to exercise the rights available to us under the lease.”

7 Although other breaches were referred to, the only one relevant to these proceedings is the breach of Clause 3 (non payment of rent).

8 On the 10th August, 1988, N.H.P. again wrote the plaintiff and referred to letter of July 22, 1988 and “our meetings on August 8 and 9, 1988”. In this letter N.H.P. conceded that it had overlooked a previous agreement in respect of the amount demanded for 1984 and stated: “We regret this oversight and now withdraw our request for this money.”

9 In respect of this US$53,320 for 1987, N.H.P. admitted that it had not credited the plaintiff with US$31,125 and apologised for the error. The letter went on to state that the plaintiff was liable for US$83,020 in all for arrears and N.H.P. promised that if that money was paid within thirty (30) days of the letter they would consider the outstanding breaches of Clause 3 of the lease cited in their letter of the 22nd July, 1988 to be “fully cured”.

10 However it was further claimed by the plaintiff and this has not been denied by the defendant, that no allowances was made for a payment of J$320,000 (of US$58,182) made in 1987 in arriving at the plaintiff's rental liability. Thus the amount ofUS$83,020 mentioned in the letter of the 10th August, 1988 should have been US$24,838. Another mistake by the defendant.

11 Addressing “Current rent” this letter states: “US$320,000 of minimum rent due and payable by Americana Jamaica Venture on 1st August, 1988 is still unpaid. We proposed and you agreed that Americana Jamaica Venture should pay US$266,108 on this rent to N.H.P. at once.”

12 On the 31st August 1988, the plaintiff wrote N.H.P. stating:

“…Enclosed please find the hotel's cheque in the amount of J$366,563.77. This represents the first of four equal monthly installments to settle our rental liability as of August 1, 1988 as requested by Hugh Dyke's letter to Dr. Steve Laufer dated August 10, 1988.

In respect of the US$83,020.00 which represents unpaid rent for the two years ended January 31, 1988 it is our intention to settle that balance with two payments of US$41,510.00, each on September 15 and September 30, 1988 respectively”.

13 To this letter N.H.P. replied promptly (letter dated 5th September 1988) rejecting the plaintiff's proposal in this way:

“After careful consideration, we are not able to accept your rent payment proposals and we wish to have all outstanding rent for Americana paid to us within 7 days of the date of this letter. Thereafter, we intend to charge you for interest at the prime rate on all outstanding balances…”

14 Albeit the amount tendered was accepted.

15 As a climax to this scenario the attorneys of the defendant, on the 30th September 1988 wrote the plaintiff in this vein:

“On behalf of our clients, Point Hotels Limited, the Landlord, under lease of the above hotel to yourselves, dated 31st day of December 1981, we hereby formally notify you that, you are in breach of the provisions of Clause 9(i) of the said Lease, in that you have failed for a period in excess of thirty (30) days to pay outstanding rental in the amount of $328,351 United States Dollars after lawful demand by the Landlord for payment thereof made on the 10th day of August 1988, and accordingly, under the provisions of the said Clause 9(i), the Landlord will be exercising its right of re-entry and repossession upon the expiration of seven (7) days from the date of this Notice and you are hereby ordered to quit, vacate and deliver the said premises, the subject of the above Lease on or before such date.”

16 Thereupon the plaintiff on the 5th October 1988 filed an originating Summons, seeking as amended:

• (1) A declaration that the Notice given on behalf of the defendant dated 30th September, 1988, purporting to terminate the lease dated the 31st day of December, 1981 is unlawful, invalid and of no legal effect;

• (2) An injunction restraining the defendant, its servants or agents from interfering with the plaintiff's possession or seeking to...