American Stores Ltd v Hoesin-singh et Al
| Jurisdiction | Trinidad & Tobago |
| Judge | Rajkumar, J. |
| Judgment Date | 12 December 2013 |
| Neutral Citation | TT 2013 HC 258 |
| Docket Number | CV 32281 of 2011 |
| Court | High Court (Trinidad and Tobago) |
| Date | 12 December 2013 |
High Court
Rajkumar, J.
CV 32281 of 2011
Ms. Annabelle Sooklal instructed by Mr. Jason Nathu for the claimant and defendants to the Counterclaim
Mr. Justin Phelps instructed by Ms. Helen Alves for the defendants
Damages - Defendants caused wrongful and/ or illegal and/or excessive distress at the business place of the claimants — Defendants seeking recovery of rent arrears, fees and costs — Whether rents were due and payable under the terms of the lease between the claimant and the defendant — Whether rent was actually in arrears — Whether the purported distress was illegal by reason of the fact that: the defendants distrained against privileged goods — Whether the purported distress was excessive — Whether the claimant was entitled to damages for illegal or excessive distress — Whether the claimant owed the first defendant rent and/or sums for use and occupation for the subject premises — Whether the conduct the claimant's constituted oppression so as to entitle the defendants to relief pursuant to Section 242 of the Companies Act — Nominal damages awarded against the defendants in respect of excessive and unlawful distress.
The claimant, American Stores Limited (the company) claims for damages suffered as a consequence of the defendants' alleged wrongful and/or illegal and /or excessive distress at premises leased by the claimant from the First defendant situate at Eastern Main Road, Mount Hope (the premises).
On August 23rd, 2011, a bailiff, the Fifth defendant, acting on the instructions of the Second, Third and Fourth defendants as agents for the First defendant under a Power of Attorney, entered onto the premises of The claimant and locked the main gates excluding all the management and staff of the claimant. A Notice served on the claimant by the Fifth defendant purports to seek to recover arrears of rent of $2, 056, 000.00, fees and costs.
This Court granted an injunction 4 days later which allowed the company to continue in operation.
The defendants Counterclaim for alleged arrears of rent. The defendants also Counterclaimed that the business of the claimant was being operated in a manner oppressive to the First, Second and Fourth defendants, and seek reliefs arising out of alleged oppressive conduct by certain directors of the company in relation to
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a. the termination of employment of Sheldon Singh,
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b. the termination of employment of Sharma Singh,
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c. the transfer of funds from the company to the estate of SS Hosein (the Estate), and
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d. alleged exclusion of the first defendant and her family from the management of the company.
(For ease of reference the first names of the numerous parties, most of whom share the same last name, will be used).
They seek reinstatement of Sheldon and Sharma, the appointment of an independent board of directors, and an account of the monies of the company (sic).
The claimant is a largely family owned company established by S. S. Hosein deceased (the founder) and his wife,
Nadia Hosein, Robin Hosein and Sandra Hosein-Singh (the first named defendant), are their children. The second, third, and fourth defendants, Sheldon, Kyle and Sharma are the children of Sandra.
Sandra suffered a stroke in 2010 and no longer participates in the activities of the claimant company, save via a general Power of Attorney granted to her children, - the Second Third and Fourth defendants.
The fifth defendant is a bailiff. The claimants have discontinued their action against him.
The defendants to the Counterclaim are Nadia Hosein, Robin Hosein, Amir Maybodi (the managing director of the claimant company), and Yacoob Ali, the chairman of the board of the company.
The following issues arise:
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a. What was the rent due and payable under the terms of the lease between the claimant and the First defendant.
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b. Whether the rent was actually in arrears on August 23rd, 2011.
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c. Whether the purported distress was illegal by reason of the fact that
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i. the defendants distrained against privileged goods; and/or
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ii. the right to distrain had been suspended; and/or
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iii. the defendants were distraining for increased rent over and above that reserved in the original demise; and/or
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iv. a valid tender of the rent was made at the time of the levy and rejected by the defendants.
(As it turns out, it is not necessary to consider issue i. above).
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d. Whether the purported distress was excessive.
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e. Whether the claimant is entitled to damages for illegal or excessive distress and if so in what amount.
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f. Whether the claimant owes the First defendant rent and/or sums for use and occupation for the subject premises.
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g. Whether the conduct of the Directors of the claimant company constitutes oppression so as to entitle the defendants to relief pursuant to Section 242 of the Companies Act, 1995.
Chronology
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• Up to December 2005 the rent was $20, 000.00 for retail section and $7, 000.00 for the service department [Records of the Company]
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• In May 2006 rent increased to $32, 000.00. The amount apportioned for the service department remained at $7, 000.00. The increase was retroactive to January 2006.
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• In September 2007 the total rent was increased to $44, 000.00 retroactive to July 2007.
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• March 28th, 2010 - Sandra Hosein incapacitated.
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• Letter dated November 15th, 2010 — demand for increase in rent for retail section to $220, 000 per month with effect from March 2011.
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• In that letter also there was a claim that the service department was in arrears of rent since October 2007.
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• Letter dated December 3rd, 2010 - demands arrears of rent for service area from October 2007 at a rate of $22, 680.00 per month. [$884, 520.00]
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• August - Letter from Kyle - letter purports to be dated July 17th, 2011. (However it refers to and acknowledges a letter on July 29th.)
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• The claimant submits that that letter was issued on August 17th, 2011. I accept this has to be so as the date it bears is clearly erroneous. That letter demands that the rent in arrears be paid within 14 days, that is on or before August 31st, 2011.
There is no evidence that this tenancy was a yearly tenancy. The rent was payable monthly and was demanded monthly by reference to a period of one month. The evidence suggests that the lease was oral and the tenancy was a monthly one. There is no evidence that the tenancy, whether yearly or monthly, was ever terminated prior to the date of the distress. There is no evidence that the demand for increased rent, whether for the retail department or the service department, was ever agreed.
In the letter from Kyle (wrongly dated July 17th, 2011 but actually August 2011) he acknowledges that he was still awaiting a formal response to the demand for increase in rent.
In fact the evidence is:–
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i. that this increase was resisted,
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ii. that this increase was to be the subject of further negotiation and discussion,
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iii. that it was the subject of further negotiation and discussion, (resulting in the Company occupying a smaller area, and now paying $50, 000.00 per month), and
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iv. that the rent demand was unaffordable, and therefore could not possibly have been agreed as claimed.
The claim for use and occupation is not compatible with the existence of a monthly lease. There is no evidence that the tenancy was ever terminated or that a valid notice to quit had ever been served determining the tenancy. No such notice was served. The tenancy was never terminated. In fact it still subsists, though for a reduced area. The company gave notice of intention to vacate the portion occupied by the Service department. This took effect after the distress.
There is no cogent evidence that the Company was holding over, after any tenancy was terminated, so as to entitle the landlord to claim for use and occupation.
The evidence of the landlord is that the service department attracted an increased rent which the Company had not been paying. There is no suggestion that the landlord ever terminated any tenancy of any portion occupied by the service department.
With respect to the retail department, there is no evidence that, having failed to pay the $220, 800 per month being demanded for that department, that its tenancy had been terminated, so as to permit a claim for use and occupation.
The argument that the tenancy had been brought to an end, and that the occupation of the company in holding over entitled the landlord to claim for use and occupation, is therefore simply not available.
The defendants have Counterclaimed seeking relief under section 242 of the Companies Act.
Termination of the fourth defendant's position as managing director of the company was not unreasonable in circumstances where:–
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a. she circulated an email to the Board demanding payment of sums in respect of vastly increased alleged rents, and arrears, and
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b. then was seen to have participated actively in a distress with a view to having the company, of which she was then a managing director, pay, under circumstances of extreme pressure, the full amount demanded.
Obviously her actions, and conflict of interest, would have left any reasonable, independent, Board with little choice but to terminate her employment as joint managing director.
Her assertion that this was oppressive and her consequent claim for reinstatement must be rejected. Her termination as managing director has not, in the circumstances, been shown to be unjustified or oppressive. She remains a director with a voice on the board.
He has not participated in this action. In any event no such relief can be granted when in...
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