The Board of Trustees of the Kingston Port Workers Superannuation Fund v ARD 2K Electronics Company Ltd

• Jurisdiction: Jamaica
• Judge: Palmer Hamilton, J.
• Judgment Date: 02 November 2017
• Neutral Citation: [2017] JMSC Civ 169
• Docket Number: CLAIM NO. 2017 HCV00156
• Court: Supreme Court (Jamaica)
• Date: 02 November 2017

[2017] JMSC Civ. 169

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

Palmer Hamilton, J. (Ag.)

CLAIM NO. 2017 HCV00156

Between

The Board of Trustees of the Kingston Port Workers Superannuation Fund

Claimant/Respondent

and

ARD 2K Electronics Company Limited

Defendant/Applicant

Mr. Adrian Cotterell instructed by Myers, Fletchers & Gordon for Claimant/Respondent.

Nigel Jones instructed by Nigel Jones & Co., for the Defendant/Applicant

Cases Mentioned:

Sharma v. Adit et al Claim No. CV 2012-04258 – Tri-Star Engineering Company Ltd v. Alu-Plastics Ltd and others [2014] JMCC Comm. 9 – Chin-Hing v. Wisynco Group Ltd [2013] JMCA Civ 19.

Legislation:

Arbitration Act, Section 5.

Lease Agreement with arbitration clause — Application for stay of proceedings — Whether applicant ready and willing to do all things necessary to the proper conduct of arbitration — Proof required in readiness and willingness-Section 5 of the Arbitration Act

IN CHAMBERS

INTRODUCTION

1 On the 4 ^th and 10 ^th of November 2017, I heard submissions from both counsel on an application for stay of proceedings made by counsel, Mr. Nigel Jones. I granted the application for stay of proceedings. These are the promised reasons for this decision.

2 The Board of Trustees of the Kingston Port Workers Superannuation Fund (hereinafter referred to as The Board) commenced proceedings against ARD 2K Electronics Company Limited (hereinafter referred to as ARD 2K) by way of Amended Fixed Date Claim Form filed May 12, 2017 along with Affidavit in Support filed on the same day. The documents were duly served on ARD 2K and sought the following orders:

1

A declaration that the Instrument of Lease between the Claimant and the Defendant is forfeited. 2. In the alternative, a declaration that the Instrument of Lease has been duly terminated by the Claimant. 3. The Defendant is to deliver possession of the property to the Claimant within fourteen (14) days of the date of the order or at such other time the Court deems fit; 4. The Defendant is to pay over to the Claimant the sum of US$52,953.96 (J$6,831,807.49) for unpaid rent under the lease. 5. The Defendant is to pay to the Claimant/Respondent mesne profits from the date of the filing of the claim until possession is recovered.

3 ARD 2K filed a Notice of Application for Court Orders on the 19 ^th May 2017 and sought the following orders; inter alia:

A Declaration that this Court has no jurisdiction to try the claim; 2. In the alternative, a Declaration that this court will not exercise its jurisdiction to try the Claim; 3. An order that the Fixed Date Claim Form filed herein be struck out. 4. Alternatively, an order that the proceedings be stayed.

1 It is this Notice of Application for Court Orders that is for my consideration.

ARD 2K'S Submissions

4 Counsel for ARD 2K indicated that he was no longer pursuing prayer number 3 that the Fixed Date Claim Form should be struck out and instead focused on the stay of the proceedings. In so doing, he referred to the Lease Agreement, the Arbitration Clause 7 (xv):

“In the case of any dispute or questions whatsoever arising between the parties hereto with respect to the cesser or abatement of rent or other moneys payable as foresaid and to the construction or effect of this instrument or any clause or thing herein contained or the rights, duties, or liabilities of either party under this agreement or otherwise in connection with the foregoing the matter in dispute shall (my emphasis) be settled by reference to a single arbitrator appointed by the President of the Jamaican Bar Association provided that this clause shall not apply or be deemed to apply to any dispute or matter touching or with respect to the rent thereby reserved or other monies payable hereunder save with regards such cesser or abatement of rent or other moneys payable as aforesaid.”

5 ARD 2K contends that cesser of rent would not apply to them but abatement of rent would in light of the concerns expressed in the affidavit of Richard Hamilton, a Director in the company. It was borne out in this affidavit that ARD 2K was unable to load and off-load at times because The Board had customers on the premises which prevented access, use and visibility; the premises were delivered to them as a shell and was not in a condition to be used in a manner prescribed in schedule 9 of the Lease Agreement which stated as follows:

“Permitted Use: For the sale of household furniture and electronics only.”

6 Additionally, ARD 2K's complaint was that the premises were given to them without electricity and they had to get occupation of the building before being in a position to commence operations. They contend that all these complaints were brought to the attention of The Board. Further, the signing of the Lease Agreement which contained an Arbitration Clause was an indication that both parties would submit to arbitration and such this court should decline to exercise its jurisdiction over the matter. They relied on the cases of Tri-Star Engineering Company Limited v Alu-Plastico Limited, Pamela Josephs and Judith Josephs, [2013] JMCC Comm. 9 and Leighton Chin-Hing v Wisynco Group Limited [2013] JMCA Civ. 19.

The Board's Submissions

7 The Board contends that the rent payable under the Lease Agreement dated September 9, 2014 is US$2,500.00 and rent in arrears is now US$52,953.96 with none paid except for US$2,363.54 on January 20, 2017. This application, they submitted, is a failed attempt to have the debt liquidated and does not fall within the ambit of abatement of rent. If abatement of rent was truly an issue then ARD 2K would not have admitted to owing any money in their email to the Claimant Company which was exhibited to the affidavit of Marcelle Dawkins.

8 Having made such an admission, the issue of abatement was not raised by ARD 2K while trying to settle its arrears. The Claimant therefore contends that the issue of abatement raised by ARD 2K is not a genuine one and the pre-action of the party is what is paramount, not that it is raised after the matter is brought before the court. They also submitted that at the time the proceedings began, ARD 2K was not ready and willing to take all reasonable steps to rely on arbitration or for the conduct of arbitration. Additionally, a demand letter was sent on November 28, 2016 to ARD 2K and after receipt of this letter the Defendant did not indicate that circumstances would dictate abatement of rent. Further, it was argued that the Board of Trustees has a fiduciary duty to the Pensioners and must act in their best interest, and to go the route of arbitration would incur further costs and time because the pensioners' money would go to waste. Therefore the court should decline to grant a stay because Arbitration would incur further time and costs to the pension fund. They relied on the cases of Satyanan Sharma and Chandrica Sharma v Christina Adit and Vashti Mohammed, CV 2012-04258; Leighton Chin-Hing v Wisynco Group Limited [2013] JMCA Civ. 19 and Hart v Windsor, 12 M & W67

Issues

9 The issues that fall for my consideration are:

• i. Whether the Claimant and Defendant are parties to a submission

• ii. Whether ARD 2K was ready and willing to do all things necessary to the proper conduct of the Arbitration, and

• iii. Whether this court has jurisdiction to try this case in light of the Arbitration Clause in the Lease Agreement, or should stay proceedings.

Law and Analysis

Whether Parties to a Submission

10 Section 5 of the Arbitration Act, 1900 states:

“If any party to a submission, or any person claiming through or under him, commences any legal proceedings in the court against any other party to the submission, or any person claiming through or under him; in respect of any matter agreed to be referred, any party to such legal proceedings may at any time after appearance, and before delivering any pleadings or taking any other steps in the proceedings, apply to the court to stay the proceedings, and the court or a judge thereof, is satisfied that there is no sufficient reason why the matter should not be referred in accordance with the submission, and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration may make an order staying the proceedings.” (My emphasis)

11 The first question which must be answered is whether a submission exists in this particular scenario. Section 2 of the Arbitration Act, 1900, in the Interpretation section, attributes the meaning of submission to be “a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not.”

12 Upon close examination of the Lease Agreement, Clause 7 (xv), which has been relied on by both counsel, expressly states that “in the case of any dispute or questions whatsoever arising between the parties… with respect to the cesser or abatement of rent or other moneys payable – shall be settled by reference to a single arbitrator.”

13 It is therefore evident that a submission, within the meaning as utilized in section 5 of the Arbitration Act, exists in this particular context. The parties who signed the Lease Agreement were duly authorized officers of Kingston Port Workers Superannuation Fund (the Claimant/Respondent) and ARD 2K Electronics Limited Jamaica (Defendant/Applicant) with their official seals affixed. I find that the proceedings were brought by a party to the Arbitration Agreement and they were brought by Kingston Port Workers Superannuation Fund. I also find that the applicant is a party to the Arbitration Agreement and the legal proceedings, that applicant being ARD 2K Electronics Company Limited.

Whether the Applicant was Ready and Willing To Do All Things Necessary to the Proper Conduct of the Arbitration

14 In the affidavit...