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Stinson Pearce Ltd v Reddy Construction Company Ltd [2015] FJHC 209; Civil Action 433.2004 (24 March 2015)

In the High Court Fiji at Suva
Civil Jurisdiction


Civil Action No. 433 of 2004


Between:


Stinson Pearce Limited
Plaintiff


And:


Reddy Construction Company Limited
Defendant


Appearances: Mr H.K.Nagin for the plaintiff
Mr Shelvin Singh for the defendant


Dates of hearing: 11th to 13th March,2014


Judgment


  1. The plaintiff was a tenant of the defendant's property, CT 4896 situated at the corner of Renwick Road and Thomson Street, in Suva city. The plaintiff alleges that the defendant had periodically increased the rental without prior approval of the Prices and Incomes Board(PIB). It is also alleged that the defendant unilaterally increased the plaintiff's share of city rates. The plaintiff claims a return of the rent and city rates it paid, in excess to the defendant. The defendant disputes the claim and counterclaims for arrears of rent, cost of reinstating and repairing the premises and rental abatement given to its incoming tenant.
  2. The amended statement of claim
  1. The plaintiff, in its amended statement of claim recites that it had tenanted the ground and basement floors of the defendant's building together with partitions, fixtures and attachments by Tenancy Agreements of 21st February,1983, and 15 July,1988.The tenancy was thereafter, extended periodically until September, 2004.
  2. The rental from the commencement of the tenancy in 1983 to 1999 remained at $4,564.00 per month. It was agreed that the plaintiff would pay 50% of the Suva City Council rates.
  1. The rental was increased by the defendant as follows:
  1. The plaintiff on numerous occasions "verbally" objected to the increases. The defendant threatened the plaintiff with an eviction action. In light of the nature of the plaintiff's business, it was forced to pay the defendant.
  2. Since 1999,the plaintiff was of the understanding and belief that the defendant had obtained "the necessary.(PIB) approval" for the rental increases, as required under the Counter-Inflation Act. The defendant did not provide the plaintiff with the approval, despite its inquiry.
  3. On 19 October,2004,the plaintiffs lodged a complaint with the PIB. The defendant was charged in the Magistrates' Court for failure to give twelve weeks notice to the PIB, of three counts of increases of rent contrary to the Counter-Inflation Act.
  4. In 1999, the plaintiff carried out substantial renovations to the premises for the sum of $150,810. The defendant contributed $50,000.
  5. The defendant unilaterally increased the plaintiff's share of city rates from 50% to 67% from January,2000.
  6. The plaintiff verbally objected to the increases.The plaintiff was threatened with an eviction action. In view of the nature of the plaintiff's business, it was forced to pay.
  7. The plaintiff claims a sum of $ 91,262.44 comprising of $81,101.42 as rentals and $ 10161.02 as city rates, paid in excess to the defendant together with interest at a commercial rate of 13.5%. Alternatively, the plaintiff states that the defendant has been unjustly enriched.
  1. The amended statement of defence
  1. The defendant, in its amended statement of defence states the rent and city rates were increased in accordance with the "mandatory reassessment of rental" set out in the tenancy agreement, commercial negotiations at arms length between the parties and by mutual agreement taking into consideration that rental was not increased for 16 years, due to the plaintiff's inability to pay.
  2. The defendant "freely and/or voluntarily and/or with informed consent" entered into the tenancy agreements and variations of the agreements.
  1. The defendant was discharged without conviction in the Magistrates' Court.
  1. The tenancy agreement and/or the dealings and/or relationship between the parties excluded the operation of the Counter-Inflation Act. To allow the plaintiff to be refunded rentals would be to unjustly enrich itself, contrary to public policy and/or repugnant in law.The plaintiff is not entitled to an award of any interest.
  2. The plaintiff substantially damaged the premises while in occupation and/or while vacating the premises, and failed to reinstate the premises to its original state and condition, as it was legally obliged to do. The defendant had to repair and/or reinstate the premises at its own cost.
  3. The defendant counter-claims for a sum of $103,811.84 comprising arrears of rent of $5062.50 for the period 1st July, 2004,to 30thSeptember,2004,damages for repairs carried out, rental abatement of $22,500.00 giving to its incoming tenant and costs of $3336.19 incurred in engaging solicitors in the injunction proceedings.
  1. The reply to defence

The plaintiff, in its reply to defence and counterclaim joins issue with the defence. The plaintiff denies the averments in he counter-claim and states that:


(i) It delivered possession of the premises in good and tenantable repair.
(ii) The plaintiff with the defendant's prior consent attended to numerous alterations, installations, and decorations to the premises to suit its business requirements, as a duty free shop. At the conclusion of the tenancy, the plaintiff removed all the alterations and reinstated the premises to its original state and condition at its own cost, in terms of clause 5(g) of the Tenancy Agreements.
  1. The reply to defence

The defendant denies the allegations in the plaintiff's reply to defence and counterclaim and maintains its counter-claim.


  1. The determination
  1. Increased rental
    1. The plaintiff claims the "excess rental" it paid to the defendant on the ground that increases of rental were made by the defendant,without "prior approval from the PIB as required under the Counter Inflation Act"- paragraph 13 of the amended statement of claim.
    2. PW1(Harbans Kumar, Group Property Manager and Credit Controller of the plaintiff company)testified on this point.He produced the initial tenancy agreement entered into between the parties on 21st February,1983,for a period of 4 years.
    1. Clause 2 of the agreement provides that:
      1. THE yearly rental for the first two years of the tenancy shall be the sum of $ 54,768.00.
      2. THE yearly rental for the remaining two years of the tenancy shall be such sum as is agreed between the parties but failing agreement it shall be such sum as approved by the Prices and Incomes Board...
    1. The initial tenancy agreement was extended for a further term of 5 years by a Variation of Tenancy Agreement of 15th January,1998.Thereafter,the tenancy was renewed periodically by exchange of letters.
    2. The rent remained at $4564 per month($54,768.00 annually)from the commencement of the tenancy in 1983 to 1st November,1999.
    3. PW1 said that he did not expect the rent to remain the same for 16 years. The plaintiff's complaint was that the increases were not legally imposed.
    4. DW1,(G.Naidu, Property Manager of the defendant company) said that during an intermittent period from 1st January,1988, to 31stDecember,1988,the rent was reduced by the Variation of Tenancy Agreement consequent to the plaintiff's request for a rebate, in the aftermath of the 1987 coup.

The first increase in November,1999


  1. It transpired in PW1's cross-examination that the negotiations on the first rental increase and refurbishment of the premises pre-dated PW1's appointment as Property Manager, in November,1999.Messrs Mahendra Motibhai, Group Chief Executive Officer, Bob Patel and Kirit Patel of the plaintiff company had liaised with Mr Reddy of the defendant company on that increase.
  2. DW1 said that the directors of both companies had a meeting at Tanoa International Hotel in Nadi in August,1999, at which the plaintiff suggested that the premises be renovated. The defendant decided to contribute $50,000. After the renovation, the rent and the plaintiff's share of city rates were to be increased, as contained in DW1's letter of 10 August,1999, addressed to the plaintiff.
  3. Mr Singh, counsel for the defendant in the cross-examination of PW1, produced a letter dated 24 August,1999, from Mr Kirit Patel to the defendant, where he agreed to a review of rent every two years. The letter reads:

Thank you for your faxed letter dated 17/8/99 and advise as follows:-


  1. Rent Review: As you left us with no other option we have no choice but to agree to rental review every 2 years.
  2. City Rates: Though you had indicated at the meeting your preferred basis of 2/3rds we finally agreed to continue on the existing basis ie 50% of the assessable rate of building.(emphasis added)
  1. PW1 agreed that Mr Kirit Patel had not said that PIB approval was required, in that letter.

The second increase on 1 January,2003


  1. By letter of 15th October,2002,Babu Singh & Associates, Barristers and Solicitors for the plaintiff had written to Gordon & Co,Barristers and Solicitors for the defendant seeking an extension of tenancy for a further 14 months on the same terms.
  1. On 23rd October,2002, Gordon & Co replied that their "client is prepared to allow your client to continue the said tenancy for a further 14 months from 1st November 2002 to 31st December 2003 on the condition that rental for these 14 months to be increased by 10%."
  2. On 20th November,2002, Gordon & Co wrote to Babu Singh & Associates as follows:

Reference is made .. to your letter dated 7th November 2002 enclosing deed of variation of tenancy agreement.


Our client has instructed us that they had only agreed to extend the said tenancy upto the 31st of December 2003 only.


Your client is now requesting a further extension.


Our client instructs that it is only prepared to further extend the said tenancy upto the 31st of March 2004 on the following conditions:-


..If your client does not agree to the conditions then the tenancy will only be extended till 31st December 2003 plus your client to pay our clients legal costs incurred todate, which we summarily assess at $2,200.00...(emphasis added)


  1. PW1 said the rent was increased to $ 5884.08 plus VAT. He said that the plaintiff wanted a year's tenancy up to December,2003,until its Suva Central building was completed.

The third increase on 1 January,2004


  1. Next,PW1 by his letter of 13th November,2003, sought a further three month tenancy till 31st March,2004,at a rent of $6472 and Vat.
  2. In his letter of 26th November,2003, he agreed to pay an increased rental of $8500, proportionate city rates and reimburse the defendants' legal costs of $ 1500, as follows:

We refer to the following tele-conference: -..


As discussed and agreed we write to reconfirm the following:


  1. Rental for the 6 months period between 1st January 2004 to 30th June 2004 to be $8,500 + Vat per month.
  2. We to pay proportionate city rates for the said period of 6 months,01/01-30/6/04

We will reimburse you your legal costs for the sum of $ 1500 VIP.


Could you please now advise your Lawyers Gordon & Co of the settlement reached between us and request them to immediately discontinue all actions in this matter...(emphasis added)


  1. It transpired in PW1's cross-examination that at the stage of the third increase of rent too, the plaintiff did not raise the issue of PIB approval.
  2. I reproduce an extract of his cross-examination on this point:

Q. The question is this: You did not even state in your letter that this new rent of $ 8500 per month will be subject to PIB approval?


  1. I didn't say...

Q. And at the time this particular letter was written,

you were in need of the premises?

  1. Yes...Cause we had nowhere to go.

Q. In your statement you have not mentioned any thing about your letter of 26thNovember 2003..or any of your letters(to the defendant)?

  1. No..PIB dealt with the rents only not extensions. (emphasis added)
  1. In re-examination, he said that he did not think it necessary to mention the requirement of PIB, in his letter of 26th November, 2003.

The fourth increase on 1 July,2004


  1. I now move on to the final increase of rental for the months of July, August and September,2004.
  1. By letter of 3rd March,2004, PW1 sought "an extension of further 3 months from 1st July 2004 at the existing rental and.proportionate city rates" till 30th September, 2004.
  1. DW1 by letter of 7th April,2004, replied:

..Could you please reconfirm that this will be the last extension and you are sure the premises will be vacated no later than 30th September 2004.


The extended period as required shall be subject to rent increase and immediate payment of proportion of city rate. (emphasis added)


  1. On 14th April,2004,PW1 said:

As requested we hereby reconfirm giving vacant possession of the above premises on or before the 30th day of September 2004. The proportionate city rate will be paid immediately upon receipt of the tax invoice from your office. Finally we would very much appreciate if the current rental (reviewed in January 2004) is continued for further three months till 30th September 2004. We now look forward to your continued co-operation in the matter. (emphasis added)


  1. On 15th April, 2004, DW1 informed PW1 that the rental for extended period of three months required will be $10,000.00 per month and issued an ultimatum on any further extension. The letter reads:

We refer to your faxed letter dated 14th April 2004. As requested we are prepared to extend the tenancy period to 30th September and there shall be no further extension allowed.


We would like to bring to your attention that the extension period would have been not allowed if the


tenant taking the premises had not agreed, they were ready to move in from 1st July 2004.


The rental for extended period shall be $10,000.00 plus Vat –per month. (emphasis added)


  1. DW1 said that the defendant had a prospective tenant, Jacks Fiji which wanted to take the premises at the increased rent. The plaintiff did not raise any objection to the increased rental. But it failed to pay the increased rental and continued to occupy the premises paying $ 8500 and VAT.
  2. I note that Kirit Patel of the plaintiff company had, by his letter of 24 August,1999, agreed to a review of rent every two years.
  1. It is evident from the correspondence between the parties that the plaintiff had expressly agreed to a trilogy of increases in rental. The second, third and fourth increases were triggered by extensions of tenancy sought by the plaintiff, and granted by the defendant on the condition that the plaintiff pays the increased rental. Moreover, the plaintiff agreed to reimburse the legal costs incurred by the defendant, in initiating distress proceedings against the plaintiff.
  1. It is now convenient to refer to the Counter Inflation Act.
  2. At the commencement of the case for the defence, Mr Singh stated that he is withdrawing the defences averred in paragraphs 22(a),(e),(f),(g),(h)and(i) of the amended statement of defence on the Counter Inflation Act. He submitted that the Act does apply.
  3. The Counter Inflation Act has been repealed by the Commerce Commission Decree,2010.The Decree provides for continuation of proceedings that relate to a pending cause of action.
  4. I would in the first instance, dispel a source of confusion in the plaintiff's case.
  5. At the forefront of the case for the plaintiff was that the approval of the PIB was necessary for any increase in rent.
  1. PW1 said that the plaintiff was of the belief that the defendant had obtained PIB approval. He could not recollect which director of the plaintiff company had verbally asked the defendant whether approval was obtained, nor at what point of time that query was asked. In cross-examination, Mr Singh asked PW1 why he negotiated with his counterpart in the defendant company, DW1 if he believed that PIB approval was obtained.
  1. DW1, in his evidence, said none of the plaintiff's letters had raised this matter.
  2. Mr Nagin, counsel for the plaintiff in his closing submissions, quite correctly states that any increase in rent requires twelve weeks written notice to be given to the PIB. But he goes on to submit that the increases in the present case were effected without PIB approval and therefore, illegal. He concludes that the excess paid can be recovered by the tenant .
  1. In my view, this is a misreading of the relevant section of the Act. Section 26 of the Counter Inflation Act is unequivocal in its terms. It reads:

A transaction shall not be invalid by reason only that it involves an offence under this Act; but the person paying a price or charge in excess of that fixed and declared under the provisions of this Act shall be entitled to recover the excess of any price or charge so paid by him over such fixed and declared price unless he himself has aided,abetted or procured the commission of the offence.(emphasis added)


  1. The introductory words of the section make it clear that an offending act,(the failure to give twelve weeks notice for a proposed increase in rent) does not render an increase of rent as invalid, as correctly held by Justice Wati in Marimutu & Sons Ltd v Native Land Trust Board,(2013)FJHC 457.
  2. The significant words are "fixed and declared under the provisions of the Act". In my view, the recovery of any excess arises only in the manifestation of a fixed and declared rent.
  3. In the present case, there was no evidence given by the plaintiff that the rent was so fixed and declared. It follows that the quartet of rental increases are valid.
  4. It is pertinent to note that the defendant, in the instant case, was charged for failure to give twelve weeks written notice of a proposed increase to be given to the PIB. The defendant was fined and discharged without conviction.
  5. The facts in Marimutu & Sons Ltd vs Native Land Trust Board, closely parallel that of the case before me. In that case, the defendant was charged with four counts of failing to give twelve weeks written notice to the PIB for the proposed increases in rent. The defendant was convicted and sentenced to a fine of $ 40 on each count. It was held that the section under review does not render increments invalid upon a conviction of a landlord, if they were agreed to by the tenant.
  6. The following two extracts contain the essence of Justice Wati's instructive judgment:

The charging of the defendant and the subsequent conviction does not render the increments invalid because the increments were agreed to...Moreover, the charges were for failure to give 12 weeks' notice for the proposed increase in rent. That offence does not determine the legality or validity of the increase which has to be decided in a civil suit.


Mr S Sharma relies on the part of the s.26 of the Counter-Inflation Act which reads "but the person paying a price or charge in excess of that fixed and declared under the provisions of this Act shall be entitled to recover the excess of any price or charge so paid by him over such fixed and declared price unless he himself has aided, abetted or produced the commission of the offence" to recover the increased rental. I find that that provision applies to prices fixed or determined by the Act. The rental for the subject premises was not fixed by the Act and so the provision relied on Mr Sharma is not any help to him. In this premises the rent was fixed by the agreement. However if I am wrong in my interpretation of that provision of S. 26 of the Counter-Inflation Act, I rely on the provision that the plaintiff itself aided, abetted or produced the commission of the offence by entering into an agreement without having to terminate the tenancy. It cannot complain now.(emphasis mine)


  1. Next, the plaintiff contends that it paid the increases of rentals under duress.
  2. PW1, the principal witness for the plaintiff admitted that none of the plaintiff's communications to the defendant stated that the increases in rental were paid under duress.
  3. PW1 also admitted that the plaintiff sought a trilogy of extensions, since its Suva Central building was not completed.
  1. PW2, (Mr Amish Patel, an employee of the plaintiff company from 2000 to 2006) in examination in chief, confirmed that the vacation of Prouds Triangle coincided with the opening of Prouds Store at Suva Central building.
  1. In re-examination, PW1 said that the defendant did not have an option and could not move out, since it did not have alternative premises in Suva, until September, 2004.
  1. As I point out later in this judgment, the evidence disclosed that the plaintiff was not an impecunious tenant,which was at wit's end to find alternative premises.
  1. I find that the plaintiff was quiescent on the PIB issue, all through the increases of rental from 1999 to 2004. The plaintiff started to remonstrate only when its exit was imminent. On 20th August,2004, the plaintiff wrote to the PIB stating that:

..Over the last couple of years the landlord has increased rental as and when it liked. . since we had no ther alternative we paid the increased rent demanded by it. Lately the landlord again wanted increased rental of $10,000 (from $ 8500)per month+ Vat from 1 July 2004 and when we declined to pay they became difficult with us. When the landlord continuously insisted on the rent of $10,000 we requested them for a PIB approval which..they have not .. provide(d).


On reviewing our records we now find that whilst the landlord increased rents in the past on no occasion whatsoever did it provide us with any PIB approval to justify the increase in rental. (emphasis mine)


  1. PW1 grasped the nettle and made a statement to the PIB, only after it vacated the premises.
aaa. In my view, the conduct of the plaintiff demonstrates that it sought extensions of tenancies and agreed to the quartet of increases of rental, for the reason its flagship store across the road was incomplete.

bbb. In this context, Mr Singh's alternative argument that the plaintiff "aided, abetted or procured the commission of the offence" within the meaning of section 26 of the Counter Inflation Act, is compelling.
  1. Mr Nagin relies on the case of Chand v Sharma,(1979)FJSC 70. In that case brought under the Counter Inflation Act,the excess rent was held to be recoverable on the ground that the plaintiff was not in pari delicto, with the landlord following a case decided by the Courts in England.
ddd. I do not agree with the reasoning in Chand v Sharma. The Learned Judge had not considered the relevant section of the Act under review.

eee. In any event, the plaintiff and the defendant in the present case,were on equal footing, both conglomerates with legal advisers and Property Managers who negotiated on their behalf.

fff. PW1 said that the plaintiff is part of the Motibhai conglomerate, which had a turnover of a "couple of millions,.outlets in Nadi Airport and every town except Tavua, Rakiraki and Tailevu"employing 1500 people.PW3(Dhinesh Bala, Administration Manager of the plaintiff company) confirmed that the plaintiff had a number of shops.

ggg. Paragraph 11 of the amended statement of claim recites that the defendant was a "substantial landlord in Fiji". PW1, in re-examination said that the Reddy Group like the plaintiff "are also a very big group..(owning)several properties,.hotels".

hhh. The plaintiff alternatively, pleads that the defendant was unjustly enriched.
  1. The plaintiff had the benefit of occupying a property in a prominent location in the commercial hub of Suva city, for twenty one years. As PW1 stated in examination in chief,the rental could not continue to be static for over 16 years.
jjj. In my judgment, the plaintiff's claim for recovery of the increased rentals is unfounded.

B. City Rates


  1. The plaintiff claims a refund of city rates in a sum of $10,161.02.
  2. The plaintiff contends that the defendant unilaterally increased the plaintiff's share of city rates from 50% to 67% from January,2000, and was forced to pay the increased amount due to commercial reasons.
  1. Clause 3(p) of the initial tenancy agreement provides that:

To pay so much city rates levied on the whole of the land..as the area occupied is proportionate to the area of the whole of the said building.


  1. DW1, in his evidence referred to letter dated 24th February,2000, written by him to PW1, on the increase in city rates.
  2. The letter of 24th February,2000, reads:

RE: CITY RATES, PROUDS TRIANGLE, SUVA


We refer to our letter dated 20th January, 2000 and would appreciate if you could remit the additional sum of $2,376.77 being balance of your 2/3rd share of city rate as per calculation shown on the attached sheet.

Kindly note that in our letter dated 17th August, 1999 we had insisted that the old basis cannot continue and that the rate will be 2/3rd of the assessable rate by the city council.


While you had written to us to consider 50% basis, we did not agree to this.


Please note that usually 2/3rds of the city rate is attributable to the ground floor tenants.(emphasis mine)


  1. The plaintiff paid the increased city rates. I reproduce extracts of the cross-examination of PW1 on this point:

Q: Even at that time, your company have the option of moving out of the premises if they were not happy with the city rate increase? They had the option? If you say that the rates are not being agreed to, then you had the option to move out?

A: But we didn't have a place to go.

Q: The question is this. You have the option to move out?

A: It would have been known to Mr Patel.

Q: So you don't know whether to have an option to move out. Is Mr Patel coming to give evidence in Court?

A:I'm not aware.

Q:Now this city rate you say that you did not agree to has been paid right until 2004 when you vacated?

A:It was paid.

Q:You kept on paying?

A:Yes. Under duress.

Q:In 2004, you have the option to move out?

A:To Suva Central. (emphasis mine)


  1. PW1,in cross-examination, agreed that the clause does not stipulate a fixed percentage of the city rates to be borne by the plaintiff. He said that the increase was unjustified as the area occupied did not increase, as contemplated in clause 3(p).
  2. Be that as it may, I find that the plaintiff by its letter of 18th October,2000, had "Agreed" to pay the increased city rates, albeit with the remark that it was not fair.
  3. DW1, in examination in chief said that at no stage had the plaintiff complained that the increase in city rates was unfair or made under duress. The plaintiff did not say it wants to vacate the premises because of the increased rental and city rates.
  4. I would reiterate that the plaintiff company was part of the Motibhai conglomerate. The contention that it was under duress to pay the increase in city rates is unacceptable.
  5. The claim for the return of city rates paid is declined.

C The Counterclaim


Arrears of rent


  1. The first item in the counterclaim is for arrears of rent for the months of July, August and September,2004,in a sum of $5062.50.
  2. The defendant, by its letter of 15th April,2004,(referred to above) granted the plaintiff an ultimate extension of tenancy, provided it pays an increased rent of $ 10000 per month and vat. But the plaintiff continued to pay a rent of $ 8500 and vat per month for the last quarter of its occupancy.
  1. The plaintiff had not objected to this increase.
  1. In my view, the plaintiff, by its conduct had accepted and agreed to this increased rental. The increase is valid.
  2. It follows that the defendant is entitled to recover the arrears of rent in a sum of $5062.50.
  3. The next claim is for damages. The amended statement of defence pleads the following particulars:
  1. Repaired/Fixed/Replaced suspended ceiling
$ 2,790.00
Repaired/Fixed/Replaced lights
$ 1,080.00
Repaired/Fixed/Replaced door handles
$ 380.00
Repaired/Fixed/Replaced rolling grilles
$ 11000.00
Carried out painting and electrical work
$ 1000.00
Purchased materials
$ 663.15
Carried out floor finishing
$ 8000.00
Repaired/Fixed/Replaced self opening doors
$ 30000.00
Repaired/fixed/replaced broken glass
$ 12000.00(not pursued)
  1. Other Costs Incurred
Using own labour and materials
$ 1000.00
Utilisation of own staff, management, transportetc
$5000.00

  1. It was strenuously argued on behalf of the plaintiff that the counterclaim is something of an afterthought, since the defendant had not hitherto complained that the premises was left in a bad condition. PW 2 said that the premises were not inspected by the defendant,at the time the plaintiff vacated in September,2004. He had handed over the key to the defendant's solicitors.

In my view, that does not preclude the defendant from bringing this claim, in its defence filed on 29 March,2006.


  1. Refurbishment of the premises

It is convenient at this point, to deal with the dispute that has arisen as a result of the renovations carried out to the premises. Sharma Kumar, Architects were hired to carry out the refurbishment. PW1 produced a copy of a summary of the project cost. Both parties accept that this document details the items of renovation and the party who was to bear the cost of specified items.


DW1, in examination in chief said it was orally agreed between the parties at a meeting held at the Tanoa International Hotel, in 1999,that any improvement added by the plaintiff would remain in the premises, after it vacates.


The trio of witnesses for the plaintiff PW1, PW2 and PW3, in cross-examination said that there was no documentation to that effect.


I do not accept DW1's contention for the following reason. DW1 also stated that his letter of 10 August,1999, to the plaintiff captures the matters agreed to at that meeting, as pointed out by Mr Nagin.


The letter of 10 August,1999, reads:


RE:TENANCY-PROUD SHOP, TRIANGLE SUVA


Further to the meeting held between us yesterday at Tanoa International Hotel, we confirm the following agreement:


  1. We will allow Rent abatement for a period of one and half month.
  2. As advised earlier, we will share the full cost of renovation attributable to us as owners as per the costing produced by Sharma Kumar Architect.
  3. Lease will be renewed for four years with option for further renewal for four years with rent reviewed every two years.
  4. Rental for Ground Floor to be at the rate of $35.00 per square feet per annum plus VAT ($70,609.00) for first two years.
  5. New rental to apply as from date of reopening of the renovated shop.
  6. City rates at two third of the assessable rate of the building apportionable to ground floor to be paid by tenant.
  7. All other terms and conditions of current tenancy to remain.(emphasis added)

I note that points 5 and 6 of the letter envisaged an increase of rent, after the renovation. That took care of the defendant's contribution of $ 50,000 towards the refurbishment


I would also note that clause 5(g) of the initial tenancy agreement, as pleaded in the reply to defence, requires the plaintiff to reinstate the premises to its original state and condition.


Clause 5 (g) reads:


The tenant may prior to the commencement of the said term and from time to time during the said term and at its discretion make erect or install alterations fittings and appliances within the said premises for the purposes of its business provided that in the case of


alterations or additions of a structural nature it shall first obtain the consent of the landlord in writing and provided further that such alterations additional decorations improvements fixtures fittings or appliances do not lessen the structural strength of the building of which the said premises form part and provided further that at the expiry of the tenancy the tenant shall (unless agreed otherwise by the landlord in writing) reinstate the said premises to its original state and condition as it was at the commencement of

the tenancy at its own cost and expense. (emphasis mine)


A month prior to the plaintiff's exit, the Chairman of the defendant company, Y.P.Reddy had written to the plaintiff (Attn; Bhupendra Patel) stating that "no fixed building components including existing doors,are to be removed".


PW1's riposte was that the plaintiff will remove all "tenant's fixtures and fittings and plant and make good any damages to the premises resulting...we will comply with all the terms and conditions of the tenancy agreement".


The defendant placed security guards in the premises, to prevent the plaintiff from removing any goods.


The plaintiff had then obtained an ex parte order from the High Court on 29th September,2004, restraining the defendant from removing the "fixtures, fittings..additions installations, improvements and decorations from the premises". The defendant had not moved to set it aside.


  1. Suspended ceiling

The defendant claims $2790 for placing a suspended ceiling. An invoice dated 4th October,2004,has been produced in support.


It is not in dispute that the plaintiffs removed its suspended ceiling, when it vacated the premises. The defendant contends that the plaintiff, in refurbishing the premises, took out the original ceiling and placed a suspended ceiling.


Mr Singh pointed out the customary clause of the initial tenancy agreement provided that "the tenant shall maintain in good and tenantable repair the interior of the walls floors and ceiling of the..premises"-3(c).


PW2 testified that he was told that "Prouds had procured that building (as a)bare shell..a floor which is not finished,..a normal ceiling".


I am satisfied there was a conventional ceiling in place. It is most likely that the plaintiff removed it, when it placed a suspended ceiling. But it does not follow that the defendant is entitled to claim the cost of a suspended ceiling, as a quid pro quo.


In my view, the defendant is entitled to the replacement cost of a conventional ceiling. The defendant has not adduced any evidence, in that regard.


Interestingly, it transpired in the evidence of PW2, that the next tenant, Lord Jewellers had installed a suspended ceiling, as confirmed by DW2((Himmat Lodhia of Lord Jewellers).


I disallow the defendant's claim of $ 2790 for the suspended ceiling.


  1. Replaced lights and door handles

PW3 said that the lights were "basically" on the plaintiff's bulkhead and suspended ceiling. I would agree that the plaintiff was entitled to take out those lights.


The claim for replacing lights is disallowed


I will deal with the claim for door handles under the next sub-paragraph.


  1. Roller grills and the self-opening doors

The defendant claims the cost it incurred of replacing the roller grills in a sum of $11000. A claim of $30,000 is also made for the self- opening doors.


The following matters are not disputed:


It transpired in PW2's evidence that the defendant's incoming tenant,Lord Jewellers had sought to purchase some of the furniture, fittings and doors from the plaintiff. DW2 had told PW2 that the sliding doors and roller grills should not be part of the purchase package, since he was informed by the defendant that those items belonged to the landlord. The sale had not materialized.


Roller grills


Mr Singh put it to PW1 and PW3 that the plaintiff, by its letter of 23rd May,2000,had requested the defendant "to have the damaged glasses and the shutters replaced and also to repair any other doors etc that need repairing which was also damaged", but had not asked that its damaged grills be returned.


That evidence was not controverted. DW1 said that the grills were badly damaged, like scrap and sent to the defendant's workshop in Samabula, as endorsed in the invoice issued by Pioneer Supplies Ltd of 17th August,2000, to the defendant, for a new set of roller grills costing $ 9900.


In my view, the plaintiff's contention that it was entitled to retain the defendant's new roller grills for its damaged grills, is unconvincing.


In my judgment, the defendant is entitled to be reimbursed the cost of its roller grills less 10% depreciation, given that the roller grills were purchased by them in 2000. The defendant shall pay the plaintiff a sum of $ 8181,(being $ 9090 less 10%).


Sliding doors


The defendant claims $ 30,000 for the self-opening doors removed by the plaintiff. It is not in dispute that these doors were ordered and paid for by the plaintiff. It transpired in PW1's examination in chief that there were originally wooden doors in the premises.


I have already dealt with the defendant's claim to the items of refurbishment installed by the plaintiff.


Mr Singh put it to PW2 that cheap residential doors were installed by the plaintiff, when it removed the sliding doors. The witness denied that suggestion. He said that the new tenant was using the same doors installed by the plaintiff, as confirmed by DW2. Neither the defendant nor Lords Jewellers had put sliding doors .


In my view, the plaintiff was entitled to retrieve its sliding doors. It follows the defendant's claim for the cost of door handles cannot be maintained.


  1. Painting and electrical work

The defendant claims $ 1000 under this head. DW1 said that the defendant's maintenance team carried out the painting and electrical work.


Mr Nagin produced several photographs taken of the premises, while painting was in progress.


PW2, in examination in chief said that "We painted a fair bit of walls...I would not comment that it was made flashy as a new building but yes, all remedial work was done". In cross-examination, he admitted that he did not have any photograph taken as at the date the plaintiff made its exist.


DW2 could not recollect the exact state of the walls.


Mr Nagin, submitted that the defendant did not disclose the photographs, albeit it had hired Island Studios to take these photographs. He says that it may be inferred that the defendant did not disclose the photographs,for the reason that the premises was in a good condition when the plaintiff vacated.


On a perusal of the series of photographs produced, I do not accept that the premises was in a good condition. I am not satisfied that the walls were fully painted.


Electrical works


As regards electrical wiring,PW2 said that the plaintiff removed the wirings from the electrical board. He explained that if one removes a tube light, one would not leave the naked wires, but will remove the wires all the way to the switchboard. In my view, a tenant should not leave electrical wiring in that state .


I disallow the claim for purchase of materials in a sum of $ 663.15. The defendant has not produced any evidence in support of that claim.


I am inclined to allow the claim for painting and electrical wiring, in a ballpark sum of $ 750.


  1. Floor finishing

The defendant claims $ 8000 under this head.DW1, in examination in chief said that the claim of $ 8000 is "for cleaning up the floor and taking out the glue".

On a review of the photographs and the letter of 1 October, 2004,written by the incoming tenants, Lord Jewellers as produced by DW2, I would accept that the floor was left littered with glue while some tiles were broken, as admitted by PW2.


DW2 was shown a letter written by him on 1 October,2004, to the defendant, a day after the after the plaintiff's exit. The letter contained a fusillade of complaints. DW2 stated that the premises were not in an admirable condition, the floor was littered with glue from unstuck tiles, the ceiling was stripped of by the previous occupants and the defendant had installed residential grade cheap looking doors which are extremely weak for commercial purposes.


I would reproduce that letter in its entirety.


Dear Mr Naidu


Shop premises at Prouds Triangle


Further to our discussions of today (Satish Parshotam/G Naidu/Himmat Lodhia) we confirm receipt of your letter of today.

On inspection of the premises, we observe the following:-


It appears that as indicated by the previous tenant in our various discussions, we will indeed be out of business for the next six to eight weeks owing to the condition of the premises.


Yes therefore request you to be reasonable, and follow normal set up period trend of renovation and installation of fixtures and fittings.


We will appreciate if you could allow up to a maximum of three months as discussed or whatever is reasonable for both of us. We are looking at a long term relationship and will certainly appreciate a good will gesture from you.


Your kind attention for mutual benefit will be appreciated.(emphasis added)


With kind regards,


Lords Jewellers Limited

[Himmat Lodhia]


cc: Satish Parshotam, Parshotam & Co. Divendra Prasad Esquire,

Attorney, Suva


It transpired in DW1's cross-examination that Lords Jewellers had placed new carpet tiles over the tiles.


I agree with Mr Nagin that the sum claimed of $ 8000 on this claim is excessive, as also stated by DW2. The defendant has not produced any documentary evidence in support of tiles replaced or repaired. I would allow a ballpark sum of $ 200 for stripping the glue and cleaning the tiles.


  1. Other costs incurred

Under this head, the defendant claims a sum of $ 1000, as cost of using its own labour and materials and $5000 for utilization of its own staff and management.


Again, details of how this sum is made up is not provided. This head of damage is, in my view, not recoverable.


As Lord Bridge of Harwich stated in Ruxley Electronics Ltd v Forsythe,(1996) 1AC 344 at pg 353 these heads of damages are not "imponderables which the court can evaluate by plucking figures out of the air".


The defendant claims a rental abatement of two months given to its incoming tenant of a sum of $ 22,500. The monthly rent was $10,000 plus vat.


On this point, I would refer to a letter dated 6th December,2004, from DW2 to Mr Y.P. Reddy of the defendant company. This reads:


We finally managed to start up the store in the triangle after a lot of hitch ups.


Most of the problems for the delays were caused owing to the attitude and final finish up by the former tenants. They kept on harping the fact that they will leave the place in a manner that will be impossible for us to occupy for at least two months. But we were fortunate that we got most of the things under way after six weeks of fixing up the place and doing the fit outs.


The front security grills were installed after almost six weeks, after which we shifted in our stocks. Regarding the front doors the former tenants said they were willing to tear off the doors and actually crash them on the main road rather than give to Mr Reddy. These remarks were uncalled for and we know they were unfair remarks.


We are requesting you to consider the installation of proper sliding doors as were shown to us prior to our tenancy. We were assured at that time by Mr Naidu that the doors cannot be removed by the former tenants. These could be done at a later stage when you are doing cosmetic changes to some other property in Suva. We will appreciate that and it will add value to your property.


More importantly, YP, we wish to inform you that we are now entering the first month of operation in the premises. We will take at least another six months before getting fully fledged in the premises with fuller stocks and setting in properly. We are humbly requesting you to consider certain period of rent abatement in lieu of setting in period. We all know that this is normal, and we are making a humble request to the effect.


You do realize that the previous tenant were paying much lower rental and had a constant nagging relationship with yourself. We felt the bitterness between the two parties, and unfortunately we got wrapped in the final blow by the wrath and attitude of the former occupants. You can say that we were unfortunate in getting in the cross fire....


We request you to do the noble thing and grant us fair and justified rent abatement.


DW1 claimed that two months rental abatement was given to Lord Jewellers. On this point, I prefer the evidence of DW2. He said that a one month rent abatement was given to Lords Jewellers.


In my judgment, the defendant is entitled to the one months rent abatement it gave to Lord Jewellers, in a sum of $10,000 and vat at 12.5 %..


  1. The defendant, in its amended counterclaim claimed the cost of engaging Parshotam & Co, solicitors. At the hearing, Mr Singh stated that he was not pursuing that claim nor the claim for replacing broken glass listed under repairs carried out.
  1. I am satisfied on the evidence that the plaintiff was in breach of the repair covenant, albeit not to the extent claimed by the defendant.
  2. The defendant's counter-claim succeeds as follow:
(a) Arrears of rental $
5062.50
(b) Damages

For painting and electrical works
$ 750.00
Cost of Roller grills
$ 8181.00
For floor finishing
$ 200.00
(c ) Abatement of rent
$ 11250.00

$ 25443.50

  1. The defendant has claimed interest. In my view the defendant is entitled to 3 % interest on the sum of $ 25443.50 from 30th September,2004,(being date of the plaintiff's vacated the premises) to date of hearing( 11th March,2014).
  2. Orders
(a) The plaintiff's claim is declined.
(b) The plaintiff shall pay the defendant a sum of $ 25443.50 together with 3% interest from 30th September,2004, to 11th March,2014.
(c) The plaintiff shall pay the defendant costs summarily assessed in a sum of $5000.

24th March, 2015
A.L.B.Brito-Mutunayagam
Judge

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