Court orders UHY Dawgen to pay US$31,000 in rent dispute

Prominent accounting firm UHY Dawgen and its managing director, Dawkins Brown, have been ordered by the Supreme Court to pay US$31,499.21 in unpaid rent to the operators of New Pineapple Shopping Centre Ja Limited in Ocho Rios, St Ann.

In a judgment delivered last month by Justice Stephane Jackson-Haisley, the court found that although the shopping centre had asserted that a five-year, fixed-term lease was agreed upon in 2012, no executed lease existed, and the parties had instead operated under a month-to-month oral tenancy.

The dispute stemmed from a tenancy arrangement involving premises located at Lot 13A-16C, New Pineapple Shopping Centre, in St Ann. The claimant, New Pineapple, alleged that Brown and UHY Dawgen Limited had failed to pay rent and maintenance fees, in accordance with the terms of a five-year lease agreement allegedly executed in February 2012.

The defendants, Brown and his accounting firm, filed a counterclaim, contending that the shopping centre had breached the covenant of quiet enjoyment. They argued that the upstairs portion of the leased premises became uninhabitable due to defective floor tiles. This, they claimed, forced them to abandon the upstairs area and operate from a smaller space, substantially interfering with their ability to carry on business comfortably.

Despite several complaints, they alleged, the shopping centre failed to repair the tiles – constituting a breach of the implied covenant to maintain the property. As a result, they sought damages for loss of use and enjoyment of the premises.

However, the court found that the defendants did not provide sufficient evidence to show that they had formally notified the shopping centre about the defective tiles or that the claimant had refused to address the issue. Jackson-Haisley ruled that there was no substantial interference with the defendants’ possession and dismissed the counterclaim.

“I find that there was no substantial interference with the defendants’ possession of the premises, and the issue of defective tiling was not adequately brought to the claimant’s attention,” the judge stated.

FINAL JUDGMENT

After deducting the cost of tile repairs, which the court ruled were the claimant’s responsibility, the final judgment was US$31,499.21 in unpaid rent and maintenance, with costs awarded to the claimant.

New Pineapple stated that the parties had entered into a formal lease agreement in February 2012 for a five-year term, with rental payments in US dollars increasing annually. The lease also required maintenance payments and repairs by the tenants.

Sandra McFarquhar Gonzalez, company secretary and manager of New Pineapple, testified that Brown personally guaranteed the lease, and that rent started at US$20,320 plus GCT per month in year one, increasing annually. She said the defendants failed to pay rent punctually and had defaulted for several months since the lease’s commencement.

Gonzalez stated that the defendants had paid US$60,080.61 up to August 31, 2015, but owed US$47,699.83 in rent and US$750 for repairs and upkeep.

The defendants, represented by Roderick Gordon and Kereene Smith of Gordon/McGrath, denied executing any written lease and insisted the arrangement was an oral month-to-month tenancy in Jamaican dollars, at J$195,000 per month. Brown claimed he paid rent and a security deposit without objection, suggesting the claimant accepted the oral terms.

He also argued that the tenancy ended in August 2015, that all due sums were paid, and that the premises were vacated on September 1, 2015. They maintained that they were not required to pay maintenance, and were not bound by the terms of draft lease documents.

However, the judge found Brown’s statement inconsistent with a letter he sent to New Pineapple on August 3, 2015, in which he acknowledged an outstanding balance of J$3,102,089.40 and proposed to settle it via monthly payments of US$1,760.80 over 15 months.

“Based on my finding that the defendants are not bound by the written lease agreement, there would be no requirement on the part of the defendants to effect these repairs,” the judge said. “I am of the view that the cost for such repairs should be the responsibility of the claimant and not the defendants, as there is no evidence that the defect in tiles was caused by the defendants’ misuse of the property.”

The judge deducted six months’ rent and the US$750 already paid from the total claimed, leaving an outstanding amount of US$31,499.21.

New Pineapple was represented by attorneys Rykel Chong and Marsha Chambers, instructed by Nigel Jones & Co, Attorneys-at-law.

tanesha.mundle@gleanerjm.com