Tikal Ltd (T/A Super Plus Food Stores) v Tewani Ltd
| Jurisdiction | Jamaica |
| Judge | Foster Pusey JA,Harris JA,McDonald-Bishop JA |
| Judgment Date | 30 July 2021 |
| Neutral Citation | [2021] JMCA Civ 38 |
| Docket Number | SUPREME COURT CIVIL APPEAL NO 57/2016 |
| Year | 2021 |
| Court | Court of Appeal (Jamaica) |
IN THE COURT OF APPEAL
THE HON Mrs Justice McDonald-Bishop JA
THE HON Mrs Justice Foster Pusey JA
THE HON Mrs Justice Harris JA
SUPREME COURT CIVIL APPEAL NO 57/2016
Vincent Chen and Makene Brown instructed by Chen Green & Co for the appellant
Jonathan DK Morgan instructed by DunnCox for the respondent
This is an appeal brought by Tikal Limited, trading as Super Plus Food Stores (‘the appellant’), from the decision of Batts J (‘the trial judge’) made in the Commercial Division of the Supreme Court on 6 May 2016. The trial judge found in favour of Tewani Limited (‘the respondent’) on a claim it had brought against the appellant for breach of a lease agreement in respect of the Oasis Shopping Centre, a commercial premises situated at the Spanish Town Commercial Centre in the parish of Saint Catherine (‘the shopping centre’).
The issue for the consideration of this court was whether the trial judge was correct to hold that the appellant was liable to the respondent for breach of the lease agreement, and for damages in the form of rental, maintenance and service charges.
On 19 January 2021, having heard counsel's submissions, this court dismissed the appeal, affirmed the decision of the trial judge, and awarded costs of the appeal to the respondent. We indicated then that we would provide our reasons in writing at a later date. This is in fulfilment of that promise.
The factual background and the procedural history in the court below, in so far as they are relevant to this appeal, will first be outlined. I will begin with the salient undisputed facts.
In 2004, the appellant entered into a 10 year fixed term lease agreement with Plastique Limited, as the landlord, and the appellant, as the tenant, of retail commercial space at the shopping centre for use as a supermarket (‘the leased property’).
On 16 July 2007, the respondent purchased the leased property from Plastique Limited. Notification of the change of ownership was given to the appellant, by the respondent's attorney-at-law, with a directive that the rent should be paid to the respondent. After the sale of the leased property to the respondent, the appellant remained in possession and continued paying rent to the respondent without objection or challenge to the respondent's right to demand rental. After some time, the appellant complained to the respondent that the supermarket was not receiving customers at a level consistent with what is common for a first class commercial complex and as such, it could not afford the high rental that was being charged. It requested a reduction in the rent from the respondent and indicated that it would be forced to vacate the property if the rent was not reduced.
As a result of the appellant's request, the parties entered into dialogue regarding the reduction of the rent. The respondent refused to reduce the rent and the appellant purportedly terminated the lease and vacated the leased property in January, 2009.
The respondent was aggrieved by the appellant prematurely vacating the leased property and, consequently, on 3 May 2013, filed a claim form with particulars of claim, which were subsequently amended on 4 April 2016, seeking the following reliefs:
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“1. Rent due and owing for the period January 2009 to December 2014 in the amount of US$1,638,746.91 plus GCT thereon in the sum of US$270,393.24 pursuant to the terms of the Lease Agreement;
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2. Interest on the arrears of rent in the amount of US$400,224.03 pursuant to clause 4(a) of the Lease Agreement at the rate of 10% per annum from the 1st January 2009 to the 31st December 2014 and continuing to the date of judgment or sooner payment;
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3. Service and maintenance charges in respect of the Rented premises in the amount of J$31,725,834.00 pursuant to clause 3 of the Lease Agreement and interest thereon in the amount of JA$3,172,583.40 pursuant to clause 4(a) of the Lease Agreement at the rate of 10% per annum from the 30th September 2012 to the 31st December 2014 and continuing to the date of judgment or sooner payment;
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4. Costs; and
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5. Such further and/or other relief as this Honourable Court deems just.” (Underlining and bold as in original)
The appellant, in response, filed an amended defence to the claim on 10 December 2015, in which it averred, among other things, that:
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a. The lease should have been registered in accordance with section 94 of the Registration of Titles Act because it relates to registered land. The lease, having not been registered, was, therefore, ineffectual to pass any estate or interest in the land.
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b. Pursuant to section 63 of the Registration of Titles Act, the unregistered lease did not create a term of years and is merely a monthly tenancy.
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c. In the alternative, if the court finds that there was a lease between the respondent and the appellant, the appellant had given the required 30 days' notice in accordance with clause 6(D) of the agreement, which applied if the lessor failed to comply with any obligations under the lease.
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d. The respondent was in breach of certain covenants under the lease agreement, namely, clause 5(B) (the covenant to provide service and maintenance and an accounting of the expenses and service and maintenance charge); clause 5(C) (the covenant to regularly and promptly pay all property taxes); and clause 5(D) (the covenant to insure).
On the same date, the appellant also filed an ancillary claim in which it claimed the sum of US$60,000.00 that was paid to Plastique Limited as a deposit for the occupation of the leased property. The ancillary claim is, however, not relevant to the appeal and so nothing further needs be said of it.
At trial, the respondent adduced evidence that revealed the following information, which was either disputed or not distinctly admitted by the appellant:
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a. The leased property was built to enable the appellant to commence business there.
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b. The lease was assigned to the respondent upon the purchase of the leased property, and so the respondent was entitled to the benefit of the lease.
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c. The appellant had failed to pay the rental, maintenance, and service charges, which resulted in the sums claimed as being due and owing by the appellant.
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d. The appellant had never presented any notice of breach on the part of the respondent, and the respondent had carried out all its obligations under the agreement with respect to the leased property.
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e. The appellant, through its attorney-at-law, had acknowledged that a viable and enforceable lease agreement with no termination clause existed between the parties with respect to the leased property.
In support of its pleadings regarding the matters on appeal, the appellant led evidence establishing the following information, which was either denied or not distinctly admitted by the respondent:
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a. The appellant was induced to enter into the 10 year lease agreement by representations made by Plastique Limited that the shopping centre would have been populated by several businesses, which would complete and enhance the operations of the supermarket at the shopping centre.
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b. The appellant expected that there would have been substantial patronage of the shopping centre, which would make the operation of the supermarket viable.
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c. Within several months of the appellant taking possession, several important tenants at the shopping centre ceased to do business with the result that the customer traffic fell significantly and the shopping centre became virtually empty over time.
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d. The appellant told Plastique Limited that if customer traffic to the supermarket did not improve, then, the appellant would move out of the leased property. The appellant's attorney-at-law, Mrs Jennifer Messado (who, interestingly, also acted as the respondent's attorney-at-law), advised the respondent that if the rent was not reduced, the appellant would have no alternative but to terminate the arrangement as the supermarket was losing money.
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e. Mrs Messado, in her capacity as agent for the appellant, was instructed to give the respondent 30 days' notice and that notice was given. Therefore, the appellant, by giving the requisite notice, would have lawfully terminated the lease and vacated the premises.
On 6 May 2016, after considering the evidence and submissions of the parties, the trial judge made the following orders, as set out in para. [40] of his written judgment recorded as Tewani Limited v Tikal Limited (T/A Super Plus Food Stores) [2016] JMSC CD 8:
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“1. Judgment for the Claimant on the Claim:
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a. Rent for the period January 2009 to December 2013 in the amount of US$1,378,963.10 plus GCT of US$227,528.91.
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b. Interest on arrears of rent in the amount of US$400,224.03 (being 10% per annum) from January 2009 to December 2013).
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c. Service and maintenance charges of J$24,860,062.00.
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d. Interest on service and maintenance charges in the sum of JA$3,172,583.40 (being 10% per annum from January 2009 to December 2013).
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e. Interest will run on the United States dollar portion of this judgment debt at a rate of 3% per annum until payment and on the Jamaican dollar portion at the rate of 6% per annum until payment, (Pursuant to the Judicature (Supreme Court) Rate of Interest on Judgment Debts) Order 2006).
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2. Judgment for the Defendant on the Ancillary Claim in the amount of US$60,000.00 being the deposit paid. Interest will run at 3% per annum from the 1 st January, 2014 until the date of payment or set off.
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3. Two-thirds costs to the Claimant to be agreed or taxed.”
In coming to his decision, the trial judge focused on the following issues, as...
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