National Housing Trust v Marksman Ltd

• Jurisdiction: Jamaica
• Judge: Batts, J
• Judgment Date: 23 September 2022
• Year: 2022
• Court: Supreme Court (Jamaica)
• Docket Number: CLAIM NO. 4 OF 2018

Between

National Housing Trust

Claimant

and

Marksman Limited

1 ^st Defendant

Robert Epstein

2 ^nd Defendant

[2022] JMRC 1

CLAIM NO. 4 OF 2018

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN THE REVENUE COURT

National Housing Trust Act — National Housing Trust (Contributions) Regulations, 1979 — Whether an employer-employee relationship exists between security guards and the 1 ^st Defendant — Whether 1 ^st Defendant liable to Claimant for employer's contributions — Whether the 2 ^nd Defendant is a responsible officer within the meaning of the Act — Whether remedies barred due to laches, estoppel, waiver and/or acquiescence — Whether declaratory relief may be granted without retroactive effect.

W. John Vassell, K.C, Trudy-Ann Dixon-Frith and Samantha Grant instructed by Dunncox for the Claimant

Walter H. Scott, K.C, Weiden O. Daley and Deniece A. Beaumont Walters instructed by Hart Muirhead Fatta for the 1 ^st Defendant

Dr. Lloyd Barnett and Gillian Burgess instructed by Gillian Burgess for the 2 ^nd Defendant

IN OPEN COURT

COR: Batts, J

INTRODUCTION AND BACKGROUND

1 This claim, for unpaid employer's contributions, is brought pursuant to the National Housing Trust Act (hereinafter called “the Act”). Under the Act an employer is obliged to deduct its employee's contribution, from that employee's salary, and pay it over to the National Housing Trust, see section 12(1) of the Act. An employer is also obliged to pay to the National Housing Trust an employer's contribution (hereinafter called the “employer's contribution”) in respect of each person employed by him, see section 11 of the Act and the schedule to regulation 2 of the National Housing Trust (Contributions) Regulations, 1979. This claim is brought by the National Housing Trust (hereinafter called the NHT) which seeks to recover, from the Defendants, unpaid employer's contributions for the years 2000 to 2016. The Defendants deny liability.

2 The NHT is a statutory body and body corporate established by the Act. Its functions are to add to and improve the existing supply of housing in Jamaica primarily by granting loans to contributors for the purchase of land or houses or, for the construction, maintenance, repair or, improvement of houses. The NHT is responsible for the collection of National Housing Trust contributions payable under the Act. The 1 ^st Defendant (hereinafter called Marksman) is a limited liability company duly incorporated under the laws of Jamaica that provides various security services to third parties. It does so subject to the terms of a licence or licenses issued pursuant to the Private Security Regulation Authority Act. The 2 ^nd Defendant, Robert Epstein, is a former Managing Director of Marksman and was its managing director for the period November 30, 2004 to April 1, 2018.

3 As a consequence of outstanding employer's contributions, allegedly owed by Marksman, the NHT served upon Marksman a certificate (Form No C6) dated November 30, 2017, pursuant to section 14(2) of the Act. This certificate is at page 171 of the Amended Core Bundle of Documents. The NHT by letter dated December 12, 2017 demanded from Marksman payment, of the alleged outstanding employer's contributions along with a penalty, for the financial years 2000–2016. The NHT thereafter commenced an action, in the Corporate Area Parish Court Civil Division, against the Defendants. The matter before the Parish Court was adjourned sine die and the NHT commenced this claim in the Revenue Court. The NHT claims, from Marksman, outstanding employer's contributions payable under the Act in the sum of $477,980,257.77 for Financial Years 2000–2016. The NHT also claims interest and surcharge at prescribed rates. In respect of the 2 ^nd Defendant the claim is that he is jointly and severally liable with Marksman by virtue of subsections (3) and (5) of section 37A of the Act.

4 The outstanding employer's contributions are particularised at paragraph 10 of the Particulars of Claim filed on the 21 ^st May 2018, see page 11 of the Amended Core Bundle of Documents, as follows:

PARTICULARS

The NHT seeks the following declarations, reliefs and remedies:

Financial Year	Unpaid Employer's Contribution (J$)
2000	3,936,372.84
2001	5,606,438.79
2002	11,846,881.04
2003	12,928,174.37
2004	13,837,370.67
2005	17,729,456.17
2006	19,634,901.00
2007	26,205,451.39
2008	32,513,603.42
2009	37,359,302.55
2010	36,784,751.61
2011	36,314,557.64
2012	37,714,499.46
2013	39,967,951.02
2014	44,222,754.79
2015	49,227,486.75
2016	52,150,304.26
TOTAL	477,980,257.77

• a) A Declaration that the 1 ^st Defendant is an employer and contributor within the definition, meaning and designation of the provisions of the National Housing Trust Act.

• b) A Declaration that the 1 ^st Defendant is liable to pay employer's contributions pursuant to the provisions of the National Housing Trust Act.

• c) An Order that the Defendants do forthwith pay the sum of $477,980,257.77 for employer's contributions for Financial Years 2000–2016.

• d) Alternatively, damages in the sum of $477,980,257.77.

• e) Interest on such employer's contributions and or damages at the rate of 40% per annum from the collections dates (namely, dates when the employer's contributions were due and payable) to the date of payment pursuant to the National Housing Trust and the National Housing Trust (Rate of Interest and Surcharge) Regulations 1999.

• f) Penalty and or surcharge on such employer's contributions and or damages (along with the said statutory interest accrued thereon) at 10% of the sums due and payable pursuant to the National Housing Trust Act and the National Housing Trust (Rate of Interest and Surcharge) Regulations 1999.

• g) Costs and Attorney's Costs.

• h) Such further and/or other relief as this Honourable Court deems fit.

5 By an Amended Defence filed June 24, 2020, see page 17 of Amended Core Bundle of Documents, the Defendants dispute the claim on the grounds inter alia that:

The Defendants pray that the court not grant the reliefs, sought by the NHT, as the NHT is not entitled to the relief or any relief at all.

• i. Marksman is not an employer of security guards and other personnel whom it engages to perform its security services,

• ii. Security guards that have provided, and who provide security services, do so pursuant to fixed term contracts for services entered into between themselves and Marksman and are all independent contractors;

• iii. There has been waiver, acquiescence, misrepresentation resulting in such unfairness as to cause an estoppel to arise,

• iv. The claim is barred by statutory limitation and/or by laches and,

• v. The 2 ^nd Defendant is not the managing director of Marksman and is not a proper party to the claim.

6 It is a matter of some concern that the security guards, whose employer's contributions are the subject of the claim, are not joined as parties either, in a representative capacity, as interested parties to the claim or, otherwise. Nor was the Attorney General's chambers present to represent the interest of the security guards or the public interest. There was no evidence before the court either, as to the impact a decision of this court may have on the security guards or, of any consequence for the public welfare. There was however evidence from individual security guards, called by both the NHT and the Defendants, as to their understanding, attitude towards and, manner of performing the contracts.

7 I must thank all counsel for their detailed written and oral submissions. Counsel must rest assured that I considered the said submissions as well as the authorities cited. In this judgment I will however only discuss them to the extent necessary to explain my decision. I am also grateful for the bundles of affidavits, documents and, authorities provided and the great care obviously taken to ensure they were properly paginated and labelled. This has certainly made the task of preparing this judgment much less onerous than it otherwise might have been.

THE CLAIMANT'S CASE

8 On the first morning of trial Mr. John Vassell, King's Counsel representing the NHT, indicated that if the court finds that the security guards are employees the NHT is prepared to accept the Defendants' calculated amount of $469,428,317.95, see page 160 of Exhibit 1 (Bundle of Agreed Documents filed on the 15 ^th September 2021), as the amount due and owing for unpaid employer's contribution for the period 2000 to 2016. This amount is the claimed sum less the employer's contribution for guards over 65 years old. The NHT agrees that the 2 ^nd Defendant is liable to only $438,283,045.46 of that amount. These figures, as I understood it, were agreed between the parties, see paragraph 41 and schedules 1 and 2 to the Claimant's Bundle of Closing Submissions filed on the 2 ^nd May 2022. King's Counsel also indicated that the primary claim is not at numbers 1 and 2 but, instead, it is at number 3 of the Claim, see page 1 of the Amended Core Bundle filed 21 ^st May 2018. He submits that item number 3 is a statutory cause of action and is not dependent on the declarations being granted. This is because the Act provides a specific cause of action for unpaid employer's contribution.

9 The NHT's two witnesses were Jennifer Staple-Gowdie and Nyron Baker. Mrs. Staple-Gowdie has been the compliance manager at the NHT since the year 2000. She was assigned as chairperson of an internal committee that examined the operations of security companies across Jamaica. Mrs. Staple-Gowdie, during examination-in-chief, corrected the year she was assigned as the chairperson from 2014 to 2012, see paragraph 24 of the affidavit of Jennifer Staple-Gowdie (page 9 Volume 1 of Bundle of Affidavits). In the same paragraph she said that in or about the year 2015 the NHT observed...