Russell Holdings Ltd v L&W Enterprises Inc. and Another

• Jurisdiction: Jamaica
• Judge: Phillips JA,F Williams JA,Edwards JA
• Judgment Date: 01 July 2016
• Neutral Citation: JM 2016 CA 68
• Docket Number: APPLICATION NOS 206/2015 & 61/2016 CIVIL APPEAL NO 118/2015
• Court: Court of Appeal (Jamaica)
• Date: 01 July 2016

Between:

Russell Holdings Limited

Appellant

and

L&W Enterprises Inc

1st Respondent

Ads Global Limited

2nd Respondent

[2016] JMCA Civ 39

Before:

The Hon Miss Justice Phillips JA

The Hon Mr Justice F Williams JA

The Hon Miss Justice Edwards JA (AG)

APPLICATION NOS 206/2015 & 61/2016

CIVIL APPEAL NO 118/2015

JAMAICA

IN THE COURT OF APPEAL

SUPREME COURT

Allan Wood QC , Miguel Williams and Joshua Sherman instructed by Livingston Alexander and Levy for the appellant

Kent Gammon instructed by Kent Gammon and Co for the respondents

Phillips JA

1 I have read the draft judgment of my learned sister Edwards JA (Ag). I agree with her reasoning and conclusion and I have nothing further to add.

F Williams JA

2 I too have read in draft the judgment of my sister Edwards JA (Ag) and agree with her reasoning and conclusion. I have nothing to add

Edwards JA (AG)

3 This is an appeal filed by Russell Holdings Limited (the appellant) challenging the decision of Morrison J to strike out its application to set aside a default judgment regularly obtained against it by L&W Enterprises Inc and ADS Global Limited (the respondents). Default judgment had been entered in favour of the respondents by P Williams J (as she then was) on 1 February 2013. The appellant had applied to set aside the judgment and the respondent applied to strike out that application. Morrison J heard both applications, granted the respondents' application and consequently ordered costs against the appellant.

4 The matter came to this court by way of a notice of application for leave to appeal out of time, a notice of application for permission to adduce fresh evidence and an application to treat the application for leave to appeal as the hearing of the appeal. Notice and grounds of appeal were also filed on 1 December 2015 and supported by the affidavit of Khadine Colman, the appellant's former attorney-at-law, which was also filed on 1 December 2015. We heard the notice of application for permission to appeal as a preliminary matter and directed that an application be made in the Supreme Court by virtue of rule 1.8(2) of the Court of Appeal Rules (CAR). On 4 April 2016 the parties appeared before Morrison J in the Supreme Court where, on hearing an application made by the appellant, he granted leave to appeal.

5 The appellant having obtained leave in the Supreme Court, we allowed the notice and grounds of appeal filed on 1 December 2015 to stand as properly filed and heard arguments on the substantive appeal along with the notice of application for permission to adduce fresh evidence. Having heard extensive arguments from both parties we reserved our decision and on 15 April 2016 we permitted the fresh evidence to be adduced, allowed the appeal and set aside the orders of Morrison J. We also ordered that the default judgment be set aside with costs to the appellant both here and in the court below and gave the appellant permission to file a defence within 14 days of the date of this order. We promised to put our reasons in writing and this is in fulfillment of that promise. The orders granted are as follows:

1

Application no 206/2015 for leave to appeal directed to be heard in the Supreme Court. 2. Leave having been granted by Morrison J, on the 4 April 2016, the notice and grounds of appeal filed on 1 December 2015 is allowed to stand as properly filed. 3. On application no 61/2016 the following affidavit evidence be adduced as fresh evidence in the appeal I. Affidavit of Keith Russell sworn to on 14 March 2016. II. Affidavit of Joshua Sherman sworn to on 16 March 2016. III. 2 nd Affidavit of Joshua Sherman sworn to on 1 April 2016. IV. Witness statement of John Spencer dated 13 November 2013 and admitted into evidence on 21 January 2016 during the hearing of the claimant's assessment of damages. V. Affidavit of John Spencer in response to affidavit of Keith Russell sworn to on 30 March 2016. VI. Affidavit of John Spencer in response to the second affidavit of Joshua Sherman sworn to on 4 April 2016. VII. Affidavit of John Spencer in response to the second affidavit of Joshua Sherman sworn to on 6 April 2016. 4. The appeal is allowed. 5. Orders 1, 2, and 3 granted by Morrison J on 30 September 2014, on the notice of application for court orders filed 22 August 2014, are hereby set aside. 6. Judgment in default of acknowledgment of service of the claim form and defence with loss of revenue to be assessed, granted to the respondents against the appellant on 1 February 2013, by P Williams J, is hereby set aside. 7. The appellant is permitted to file and serve its defence within 14 days of the date of this order. 1 8. Costs of this appeal and in the court below to the appellant to be agreed or taxed.

Background

6 The appellant is the owner of commercial property situated at 1 River Bay Road, Montego Bay in the parish of Saint James. The 1st respondent is a company that was incorporated in the state of Nevada in the United States of America in 2009. The 2nd respondent is a company duly incorporated in Jamaica with registered offices at 21–22 Fairview, 11 Office Park, Montego Bay in the parish of Saint James.

7 The appellant and the 1st respondent entered into an agreement for a lease in relation to six units which comprised 5,600 square feet of the property with an option to please for two more units when they became available and ready for occupation. By virtue of this agreement the appellant would lease to the 1 ^st respondent the six units situated at 1 River Bay Road, Montego Bay in the parish of Saint James to commence on 5 January 2010, for a duration of three years with an option to renew for a further two years. Whilst no formal lease agreement had yet been drawn up or executed the parties agreed to certain terms of lease.

8 The terms of the lease which were agreed are as follows:

‘TERMS OF LEASE

FIRST SCHEDULE

ITEM ONE

1. Description of the Said Land

All those parcels of land being LOTS NUMBERED NINETEEN, TWENTY part of the CATHERINE HALL ESTATE at the intersection of RIVER BAY ROAD link road, and Lower Bevin Avenue, Catherine Hall Estate, Montego Bay, in the parish of Saint James, and being the lands comprised in Certificate of the Title registered at Volume 1004 Folios 590, 591.

ITEM TWO

2. Description of Leased Premises

The premises known as THE RUSSELL CENTRE, offices C1, C2, C3 C4, C5, C6=5,600 sq. ft.

D & E1 at the same terms as above, commencing 30 days after landlord advises lessee of the availability and readiness of the premises.

ITEM THREE

1. THE LANDLORD

Russell Holdings Limited, owners of the Commercial Building (THE RUSSELL CENTRE) duly registered at 1 River Bay Road, Montego Bay, St. James.

ITEM FOUR

The Tenant

L&W ENTERPRISES, INC, duly registered at

ITEM FIVE

The RENT

The lease is subject to proof of the approved Free zone status with General Consumption Tax waiver letter. The rent as stated below per annum:

Year 1: US$8.00 per sq. ft.

Year 2: US$9.00 per sq. ft.

Year 3: US$10.00 per sq. ft.

ITEM SIX

Other Terms of Rental

• a.) Offices D & E-1 to be agreed at the same terms as above, commencing 30 days after landlord advises lessee of the availability and readiness of the premises.

• b.) First right of refusal on any vacant offices.

• c.) Signage & additional security will be allowed at Tenant's expense. The landlord must approve the placing of signage which when approved will be given in writing which will not be unreasonably withheld.

• d.) The Tenant must produce drawings for general layout more specifically, electrical wiring and installation along with drawings for partitions to be installed for the lessor's approval which will not be unreasonably withheld.

LANDLORD LEASEHOLD IMPROVEMENTS

Air Conditioning of Offices C4, C5 with a 3 year warranty. Offices D and E1,

• • to be air conditioned,

• • and All floors where not tiled, to be finished with tiles or commercial grade carpeting,

• •and for the wall separating Office D & E1 to be removed, upon activation of Item two, point two.

ITEM FOUR

EFFECTIVE DATE

The lease will start January 5, 2010.

ITEM FIVE

THE TERM OF LEASE

Three (3) Year Lease with an option to renew for additional two years.

ITEM SIX

THE PERMITTED USE

Carrying on the business of Information Technology.

ITEM SEVEN

NOTICE OF TERMINATION OF LEASE Both Lesser and Lessee are obliged to give a minimum of SIX months' [sic] Notice in writing as specified in Clause 12, Page 18.

ITEM EIGHT

OPENING AND CLOSING HOURS

ITEM NINE

SECUIRTY DEPOSIT

One Month's Rent of US$3,734.00

ITEM TEN

Special Notation

• i.) Ron McKay of L&W Enterprises, Inc. and Khadine Colman the lessor's Attorney-at-Law, will confer and finalize the REMAINDER of the Lease Agreement.

• ii.) This Agreement is binding on the parties and is signed pending the completion and signing of the formal Lease Agreement and none of the items contained herein shall be deviated from.

9 This “terms of lease” was signed and sealed by the appellant but was not witnessed and was signed by only one director of the 1 ^st respondent, Ron McKay, but not by the second director of the 1 ^st respondent, John Spencer, and was neither sealed nor witnessed. A later formal lease document was drafted, however, this was never executed. It is important for the purposes of the arguments in this appeal to note that the parties to this first draft lease were the appellant and the 1 ^st respondent. A second lease document was also drafted but this was only signed by the 2 ^nd respondent who in the second draft lease had replaced the 1 ^st respondent as the party to the lease with the appellant.

10 The relationship between the parties broke down and on 7 February 2011 the respondents...