Implementation Ltd v Social Development Commission
| Jurisdiction | Jamaica |
| Judgment Date | 10 January 2013 |
| Neutral Citation | [2013] JMSC Civ 05 |
| Date | 10 January 2013 |
| Docket Number | CLAIM NO. C.L. 2002/I-12 |
| Court | Supreme Court (Jamaica) |
[2013] JMSC Civ.05
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
CLAIM NO. C.L. 2002/I-12
The Claimant is a company registered under the Companies Act 1967 and provides real estate consulting services and undertakes project and construction management. It is a lessee under a Lease made in 1994, between itself and the Commissioner of Lands (COL), for premises at Stonehole and Cumberland Pen, in the parish of St. Catherine, containing over eighty-four acres. The Lease is for a term of 25 years with an option to renew for another 25 years (Head Lease). The Claimant had, along with Jamworld Ltd., developed a part of the leased premises into an entertainment complex known as Jamworld Entertainment Centre (the Centre) in accordance with the terms of the Head Lease.
The Defendant is incorporated pursuant to the Jamaica Social Welfare Commission Act, 1958, with powers to purchase, hold and dispose of land, and to sue and be sued in its corporate name. A name change was effected by a legislative amendment in 1995, which provided at section 4, that the Commissionshall be known as the Social Development Commission (SDC). The Commission consists of a chairman and not less than two nor more than nine other members appointed by the Minister who is empowered, after consulting with the chairman to give directions of a general character as to the policy to be followed in the exercise and performance of SDC's functions.
Following negotiations and an exchange of written correspondence between the parties, SDC entered into possession of the Centre, on or about the 1 st October 1998. Monthly invoices for a rental sum of $140,000 were sent to SDC, who vacated the premises on or about the 30 th November 2001.
Consequent on SDC's departure from the Centre, the Claimant filed an action on the 1 st March 2002, alleging that the Defendant in breach of contract, has failed and or neglected to pay rent and utilities, particularly electricity bills. Judgment in default of defence was entered on the 15 th April 2003 for $6,750,555.96 and interest. On the 23 rd March 2004, the Defendant had its application to set aside the default judgment granted along with leave to file its Defence. The affidavit in support of its application stated that the Defendant had vacated the Centre after giving the requisite notice and further that the sums owing for rental and electricity were $3,440,000.00 and $208,405.96, respectively.
Approximately seven months later, the Claimant filed an application for Summary Judgment, alleging at paragraph 4 of the affidavit of Jeremy Brown, in support of the application, that the Claimant's representative, Jamworld Ltd., by letter dated 14 th May 1998, to the Defendant, had confirmed the Claimant's willingness to enter into a long-term lease with the Defendant for the Centre and proposed the terms and conditions to be contained in the lease, inter alia;
‘The initial lease term of ten years with an option to renew for a further period of five years. We will also grant a right of first refusal to lease the premises on the expiration of the fifteen year term if the option to renew after 10 years is exercised’.
On the 1 st February 2005, with the consent of the Defendant, Mr. Justice Reid entered judgment for the Claimant in the sum of $3,648,406.00. The balance of the claim, including interest, was adjourned for determination on the 18 th February 2005, on which date, Mr. Justice Reid further adjourned the matter to the 18 th July 2005, allowing three hours for the determination of the outstanding matters.
On the 14 th July 2005, the Defendant filed an Amended Defence and Counterclaim, admitting paragraphs 1 and 2 of the Amended Statement of Claim and admitted owing the sums of $3,440,000.00 for rental and the sum of $208,405.96 for utilities. The counterclaim was for the sum of $17,409,882.07, alleging unjust enrichment of the Claimant from certain improvements the Defendant had carried out on the Centre. The Claimant's answer to the counter-claim was that the purported improvements were not carried out with the permission of the Claimant, and had adversely affected the property. On the 22 nd February 2007, Rattray J, granted permission for Mr. Errol Spence, Quantity Surveyor, to be called as an expert witness.
It was the Claimant's contention that there was a fixed term lease agreement between the Claimant and the Defendant under the lease agreement. There was no provision permitting the Defendant to terminate the lease agreement by giving one month's notice or by giving any notice. Accordingly, the Defendant breached the lease agreement by abandoning the premises on the 30 th November 2001. The Claimant submits that all the essential terms of the lease had been agreed, as evidenced by the correspondence between the parties. The fact that these terms were not formalized in a document is not necessary, because the normal rules governing the formation of contracts apply to tenancy agreements.
The Claimants submitted that the Defendant, in its Further Amended Defence, had made several important admissions, i.e.;
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(1) That the Claimant is Lessee of the premises pursuant to a Head Lease with the Commissioner of Lands.
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(2) That by an agreement for lease made in or about 1998, the Defendant acquired a sublease of the lands on certain terms and conditions, including;
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(a) The sublease was to be for a fixed term of ten years with an option to renew for a further five (5) years.
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(b) Rent was to be $140,000.00 per month.
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(c) The Defendant was to be responsible for all utility payments, including water, electricity, and telephone.
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(d) During the first five-year term, the lease payment for each succeeding anniversary of the lease term would be increased by the per cent difference in the Consumer Price Index (CPI) over and above an increase of 8% per annum for the current year.
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(e) The sub-lease would commence on October 1, 1998.
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(3) That the Defendant entered into possession and paid rent to the Claimant.
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(4) That the Defendant vacated the premises on or about the 30 th November 2001.
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(5) That the Defendant failed to pay utilities and a portion of the rent.
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(6) That the Defendant demolished the VIP stand, vendors stall and placed top soil and irrigation piping on the grounds of the amphitheatre.
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(7) That the Defendant owes $3,648,405 for rent and $208,405.96 for utilities.
It was submitted on behalf of the Claimant that SDC's argument at trial was different from the defence they pleaded and they should not be permitted to raise an argument that did not appear in their Further Amended Defence and wasinconsistent with it. The Defendant had not, prior to trial, disputed the Claimant's contention that the parties had agreed a sublease of a fixed term of ten years with an option to renew for a further five years. However, at trial, Counsel for the Defendant sought to argue that there was no formation of a lease for a fixed term between the parties. It was clear, from March 2002, when the Claimants pleadings were served, that the Claimant was alleging that the parties had entered into a fixed-term lease agreement for a period of ten years, with an option to renew for a further five years. The draft Defence in support of the application to file defence out of time, admitted paragraphs 1, 2 and 3 of the Amended Statement of Claim.
The affidavit of Jermey Brown, CEO in support of the Claimant's application for Summary Judgment, referred to the Head Lease. Mr. Brown, in paragraphs 3 — 6 of his affidavit, traced the history of the negotiations between the parties and asserted that the terms of the lease that were alleged in the Claimant's Statement of Claim, were proposed by the Claimants in a letter dated 14 th May 1998. The Defendant, in its letter dated 27 th August 1998, confirmed its intention to lease the land, effective the 1 st October 1998, and agreed the terms proposed in the Claimant's letter, except a new proposal was submitted for the determination of the rent. The Claimant's proposal on that issue was eventually accepted by SDC in their letter of the 12 th September 1998. These allegations were not traversed.
On the 1 st February 2005, the Court ordered;
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(1) By consent, judgment for the Claimant in the sum of three million, six hundred and forty eight thousand four hundred and five dollars and ninety-six cents.
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(2) The balance of the claim including interest on the 18 th February 2005.
In its Amended Defence filed on the 14 th July 2005, the Defendant admitted the existence of a sub-lease of a fixed term of ten years with an option to renew. As also, the rental sum and the date of commencement of the lease, and the formula for determination of the increase in rental. The parties both filed pre-trial memoranda. The Defendant admitted that he had entered into a sub-lease with the Claimant. 0ne of the Defendant's legal contentions was whether the sub-lease was for a monthly tenancy or a tenancy of a fixed term of ten (10) years. It has however been contended by Counsel for the Claimant, that the Defendant had maintained the stance throughout that the lease was for a fixed term. None of the issues, admissions or contentions raised by the Defendant is inconsistent with its earlier admission that the lease was for a fixed term of ten years with an option to renew. The Defendant had, for the first time, raised the issue of a term other than a fixed term of ten years.
I have traced the matter in some detail to demonstrate that the Claimant is on firm ground to mount a challenge against the Defendant being allowed to raise a defence other than that which they pleaded. A good defence...
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