Judge avoids ruling on who should collect rentMovieTowne tenants in limbo

Senior Reporter

derek.achong@guardian.co.tt

Tenants at MovieTowne Port-of-Spain will have to seek legal advice on who they should pay their rent to at the end of the week, as their landlord continues its legal action over a move to repossess the entertainment and shopping complex.

Last Friday, the Port-of-Spain Infrastructure Company Limited (POSINCO), which manages land held by the Port Authority of T&T (PATT), sought to take control of the complex over $10,904,121.23 in rental arrears allegedly owed by Trinbago Commercial Development Company Ltd (TCDC), owners of MovieTowne.

Less than 24 hours later, however, TCDC obtained an injunction blocking POSINCO from issuing communications to its tenants, who were previously told by the authority that they had to make new arrangements with it over their continued occupation of the venue.

When the case came up for hearing before Justice Eleanor Donaldson-Honeywell, yesterday, she refused to decide who should collect rent while the litigation continues.

TCDC lawyer Deborah Peake, SC, requested that the tenants continue paying rent to her client, as she noted its ability to keep the facility operational would be affected by a lack of income.

“The claimant is being placed in an inevitable position of not being able to pay its liabilities, including utilities, security, and maintenance fees,” she said.

Attorney Christlyn Moore, who represented one tenant, questioned whether paying rent to the court would be a better option.

“If we continue to pay rent to the claimant (TCDC), would the defendant (POSINCO) pursue us later?” Moore asked.

Justice Donaldson-Honeywell was initially minded to allow the TCDC to continue to collect the rent but decided against the order after POSINCO lawyer Justin Phelps, SC, pointed out that she did not have evidence from all the tenants who stood to be affected.

Peake challenged the position.

“The claimant can’t speak for them because they are our tenants and we must protect their interests. They (the tenants) are unsure what to do and it may be unlikely to pay their rent until this is determined,” Peake said.

She noted that TCDC was willing to repay the rent it receives if it loses its case with POSINCO.

Despite the concerns raised by Peake, Justice Donaldson-Honeywell still refused to grant the order and left it open to tenants to pay their rent to TCDC, POSINCO, or the court after seeking individual legal advice.

While there was strong disagreement on who should receive the rent, TCDC and POSINCO did agree on some issues in the case.

TCDC agreed that it would pay $3 million to the court, which will be held in escrow until the substantive case over the arrears is determined.

POSINCO also agreed not to interfere with the leases and operations of the tenants and TCDC.

Earlier in the hearing, Peake claimed that POSINCO had stationed guards at her client’s administrative office and the complex’s banquet and conference centre. She said administrative staff took almost 20 minutes to gain access to the office to prepare a cheque.

Justice Donaldson-Honeywell noted that she could not entertain the claims, as they were not formally filed as evidence before her.

The dispute between the parties relates to a lease for the 9.9 acres (4.0236 hectares) of land off the Audrey Jeffers Highway at Invader’s Bay in Port-of-Spain, occupied by the complex.

Before construction began on the complex in 2001, the monthly rent was reportedly $6,500 per month based on a rate of 1.5 cents per square foot. The lease allowed for a rate review every five years. In 2006, the rent was increased to $72,000 per month.

By 2021, the rental rate was set at $283,000 per month based on a rate of 65 cents per square foot.

POSINCO claimed it exercised its right to “re-entry” under the lease after TCDC failed to make any payments over the past three years.

“This re-entry exercise was undertaken as a consequence of breaches of the terms and conditions of the existing Deed of Lease between POSINCO and TCDC,” it said in a press release last week.

In a response, however, TCDC accused the authority and its subsidiary of “high-handed, illegal and bullying” action.

Stating that it attempted to pay $1 million towards the debt last Monday, it said, “TCDC has offered to settle all outstanding rental sums which are not in dispute and attempted to pay such sums by cheque.

“The cheque was returned notwithstanding current discussions to settle all matters, including disputed amounts.”

In its substantive lawsuit, TCDC is challenging the latest rental increase, which was based on a report prepared by registered valuation surveyor GA Farrell & Associates.

In an affidavit, attached to its claim and obtained by Guardian Media, TCDC director Hadyn John Gadsby claimed the increase was invalid and under challenge.

“The claimant’s position is that the rent review carried out by the Farrell Report is irrationally high and is therefore invalid and void, as it could not have been carried out in accordance with the or special assumption agreed by the parties,” Gadsby said.

Stating that the premises should have been valued on the basis that it was a swamp before being developed by TCDC, Gadsby said the company received a report from another surveyor, who estimated the monthly rental value to be $82,980.17 based on a comparison with other similar properties.

“At the time of letting, the premises were covered in bush, vines, subject to severe water retention and the topography varied and was significantly below the level of surrounding port lands to the east,” he said.

“The report fixed the rent at an unlawfully high basis which unjustly enriches the port,” he added.

He claimed the company had already paid $5,327,970.74 in additional rent based on the report and is requesting a rebate if it is successful in its case.

Through the lawsuit, TCDC is also seeking compensation for a loss of profits it sustained as a result of POSINCO’s actions.

The substantive case is expected to be assigned to another High Court Judge, who will set a date for the next hearing.

TCDC was also represented by Ravi Heffes-Doon and Andre Rudder.

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