THE REPUBLIC OF TRINIDAD AND TOBAGO IN THE HIGH COURT...

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THE REPUBLIC OF TRINIDAD AND TOBAGO

IN THE HIGH COURT OF JUSTICE

Claim No. CV 2011-03281

Between

THE AMERICAN STORES LIMITED

Claimant

And

SANDRA HOSEIN-SINGH

SHELDON SINGH

KYLE SINGH

SHANNA SINGH

CARLOS CALIX

Defendants

AND

NADIA HOSEIN

ROBIN HOSEIN

AMIR MAYBODI

YACOOB ALI

Defendants to the Counterclaim

BEFORE THE HONOURABLE MR. JUSTICE PETER A. RAJKUMAR

APPEARANCES

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

ORAL JUDGMENT AND REASONS FOR DECISION

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TABLE OF CONTENTS

PAGE

BACKGROUND 3

THE CLAIM

3

THE PARTIES 4

ISSUES 4

FINDINGS AND CONCLUSION

5

CHRONOLOGY 5

RENT 6

NATURE OF TENANCY

6

USE AND OCCUPATION

6

OPPRESSION 7

REINSTATEMENT OF THE 4TH DEFENDANT

7

REINSTATEMENT OF THE 2ND DEFENDANT

8

THE APPOINTMENT OF AN INDEPENDENT BOARD OF DIRECTORS

8

ACCOUNT

8

CONCLUSIONS 10

ORDERS

11

ANALYSIS AND REASONING

13

RENT 13

WHETHER THE INCREASED RENT DEMANDED FOR THE PREMISES WAS EVER AGREED

13

MEETING OF JUNE 17TH 13

ALLEGED SERVICE DEPARTMENT ARREARS

18

FURTHER ANALYSIS OF DOCUMENTARY EVIDENCE

21

LETTER DATED 3rd DECEMBER

22

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DRAFT MINUTES – WHETHER ACKNOWLEDGEMENT OR AGREEMENT TO PAY

24

17TH JUNE 2011 25

23RD JUNE 2011 26

18TH JULY 2013 27

22ND JULY

27

DISTRESS

29

LEVYING FOR RENT INCREASES BEYOND THAT RESERVED IN ORIGINAL DEMISE

30

WHETHER RIGHT TO DISTRAIN WAS SUSPENDED

30

REFUSAL OF TENDER

31

WHETHER PURPORTED DISTRESS EXCESSIVE

32

WHETHER THE CLAIMANT IS ENTITLED TO DAMAGES FOR ILLEGAL OR EXCESSIVE DISTRESS

AND IF SO IN WHAT AMOUNT

32

DAMAGES

33

THE COUNTER CLAIM

34

THE DISMISSAL OF SHELDON

35

THE DISMISSAL OF SHANNA

35

OPPRESSION 38

THE OPPRESSION REMEDY

42

LAW 42

INTERPRETATION OF SECTION 242

47

FAIRNESS – FACTORS AND CONSIDERATIONS IN DECIDING WHAT IS UNFAIR

48

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THE REASONABLE EXPECTATIONS STANDARD

48

TRANSFER of $4MILLION

55

ORDERS

58

RENT 58

OPPRESSION 58

ORAL JUDGEMENT

BACKGROUND

The claim

1. 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).

2. On August 23, 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.

3. This Court granted an injunction 4 days later which allowed the company to

continue in operation.

4. 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

a. the termination of employment of Sheldon Singh,

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b the termination of employment of Shanna Singh,

c. the transfer of funds from the company to the estate of SS Hosein (the Estate), and

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).

5. They seek reinstatement of Sheldon and Shanna, the appointment of an

independent board of directors, and an account of the monies of the company (sic).

The Parties

6. The Claimant is a largely family owned company established by S. S. Hosein -

deceased (the founder) and his wife.

7. Nadia Hosein, Robin Hosein and Sandra Hosein-Singh (the first named

defendant), are their children. The second, third, and fourth defendants, Sheldon, Kyle

and Shanna are the children of Sandra.

8. 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.

9. The fifth Defendant is a bailiff. The Claimants have discontinued their action

against him.

10. 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.

ISSUES

11. The following issues arise:

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 23, 2011.

c. Whether the purported distress was illegal by reason of the fact that

i.the Defendants distrained against privileged goods; and/or

ii.the right to distrain had been suspended; and/or

iii. the Defendants were distraining for increased rent over and above that reserved

in the original demise; and/or

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).

d. Whether the purported distress was excessive.

e. Whether the Claimant is entitled to damages for illegal or excessive distress and if

so in what amount.

f. Whether the Claimant owes the First Defendant rent and/or sums for use and

occupation for the subject premises.

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.

FINDINGS AND CONCLUSION

12. Chronology

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]

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.

In September 2007 the total rent was increased to $44,000.00 retroactive to July

2007.

March 28th

2010 - Sandra Hosein incapacitated.

Letter dated November 15, 2010 – demand for increase in rent for retail section to

$220,000 per month with effect from March 2011.

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 3, 2010 - demands arrears of rent for service area from

October 2007 at a rate of $22,680.00 per month. [$884, 520.00]

August - Letter from Kyle - letter purports to be dated July 17 2011. (However it

refers to and acknowledges a letter on July 29th

.)

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.

Rent

Nature of tenancy

13. 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.

14. 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.

15. In fact the evidence is:-

i. that this increase was resisted,

ii. that this increase was to be the subject of further negotiation and discussion,

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

iv. that the rent demand was unaffordable, and therefore could not possibly have been

agreed as claimed.

Use and occupation

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16. 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.

17. 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.

18. 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.

19. 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.

20. 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.

Oppression

21. The Defendants have counterclaimed seeking relief under section 242 of the

Companies Act.

Reinstatement of the Fourth Defendant

22. Termination of the fourth defendant’s position as managing director of the

company was not unreasonable in circumstances where:-

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.

23. 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.

Reinstatement of the Second Defendant,

24. He has not participated in this action. In any event no such relief can be granted

when in the face of serious allegations regarding his behaviour, even though after his

termination, he has chosen not to respond. A court will not in those circumstances be

justified in granting the relief claimed – his reinstatement.

The appointment of an independent Board of Directors

25. The Fourth defendant appears to have conceded that there are no issues with the

Board currently in place. This is not surprising as she was instrumental in having its

members appointed, including representatives of Islamic organizations, and her own

father. The current board reflects the shareholding in the Company. She herself remains

on the board representing her mother’s interest. The board has not been demonstrated to

lack independence. In fact its actions in refusing to succumb to the pressure of the

excessive demands for alleged rent and alleged arrears demonstrate its independence.

Even if there are family issues arising from the composition of the board, there are also

apparently independent non family members on the current board. There is no need

demonstrated for this court to interfere with the composition of the Board as currently

constituted.

Account

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26. I find that the transfer of four million dollars ($4,000,000) from the accounts of

American Stores Limited by Robin and Nadia, the trustees of the estate, has not been

sufficiently substantiated. Accordingly the court cannot simply accept that there was a

previous decision of the board that sums, of which the sum of four million dollars

($4,000,000) was one installment, were to be paid to the estate in settlement of an alleged

debt by the Company.

27. The opportunity to satisfy the court by reference to documentation, either from

the accounts of the estate, or the accounts of American Stores itself, was not utilised.

That sum of four million ($4,000,000) needs to be repaid to the company, and the

current directors need to be given an opportunity to decide afresh whether that sum

is part of a debt and whether it needs to be repaid to the estate.

28. In addition that sum needs to be traced and recovered. Accordingly, Nadia and

Robin, as trustees of the estate, and also as defendants in this action, are to provide a

schedule within seven (7) days setting out:-

i. all persons who received distributions from the estate out of the four million

($4,000,000) allegedly paid to and received by the estate,

ii. the dates paid,

iii. how paid, and the amounts of such payments

iv. copies of any documentation evidencing such payment and receipt by the payees.

All persons who received a distribution from the estate out of the sum of four million

($4,000,000) allegedly paid to the estate out of the company’s assets are to repay the

sums received. Those persons should be all recorded in the schedule as ordered above.

All persons who are parties to this action will be ordered to repay to the company within

7 days all sums received by them from the estate out of the four million ($4,000,000) that

the estate allegedly received from the company funds.

29. If they have received the entirety of the four million ($4,000,000) and they all

return the sums received by them then the company would have received repayment of

the full amount.

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30. The current directors of the company should consider afresh whether they are

satisfied that the sum of four million ($4,000,000) constitutes part of a debt due and

owing by the company to the estate and whether the company should pay it, and if so

how or when.

31. If all of the four million ($4,000,000) received by the estate was not distributed to

beneficiaries, then the difference must be paid by the estate within 7 days. If it is not paid,

then Nadia and Robin are to repay that undistributed difference personally within 7 days,

subject to their right to recover any such payment from the Estate.

32. If repayment is not made by beneficiaries who are not party to the instant action,

of the sums received by them out of the four million ($4,000,000) in company funds

distributed to them by the estate, the Estate is to repay their share, subject to the right of

the Estate to recover any such sums from those non party beneficiaries.

33. So, in the case of persons who are not parties to this action who fail to repay (the

sums received by them out of the four million ($4,000,000) in company funds distributed

to them by the estate), the trustees are at liberty to recover from them any such sums

which remain unpaid.

34. It is only if the estate does not pay the difference, between four million

($4,000,000) and the sums paid out to beneficiaries of the estate that the issue of

personal repayment by Nadia and Robin would therefore arise.

35. It is not intended that the amounts paid by the estate, (as a distribution out of the

four million ($4,000,000) paid to it from the company’s funds) to those persons who are

parties to this action, be repaid personally by Nadia or Robin. Robin and Nadia would

not be responsible for personal repayment of any amount that is not refunded to the

Company by persons who are parties to this action, (as on the schedule referred to

above).

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36. It is only if the estate does not make up any difference between four million

($4,000,000) and the sum paid to beneficiaries of the estate, (that is the amount of the

four million ($4,000,000) that remains undistributed if any) that the issue arises of

personal liability by Robin or Nadia for repayment of such undistributed sum.

CONCLUSIONS

37.

1. The rent due and payable under the terms of the lease between the Claimant and the

First Defendant was, at the time of the distress, $44,000 per month for the entire premises

then occupied by the Claimant for both the service and the retail Departments.

2. The rent was actually in arrears on August 23, 2011 for 2 months, to the extent of

$88,000.00

3. The purported distress was excessive by reason of the fact, inter alia, that the

Defendants were distraining for increased rent over and above that reserved in the

original demise, and moreso, in respect of a claim for rent that was never agreed and

never constituted a term, express or implied, of the tenancy,

4. The Claimant is entitled to nominal damages as it has failed to prove adequately its

claim for special damages.

5. The Claimant owed the First Defendant no sums for rent and/or sums for use and

occupation for the subject premises at the time of the distress other than the sum of

$88,000.00 which it acknowledged owing.

6. The conduct of the Directors of the Claimant Company in relation to termination of

Shanna and Sheldon does not constitute oppression so as to entitle the Defendants to

relief pursuant to Section 242 of the Companies Act, 1995.

7. The defendants have sufficient representation on the independent Board which they

participated in establishing, and no basis has been established for the Court’s

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involvement in the affairs of the Company, save for the issue concerning the transfer of

$4 million from the Company’s accounts.

ORDERS

Rent

38. It is ordered that:-

i. Nominal damages in the sum of $20,000.00 are awarded against the defendants to be

paid by the defendants to the claimant in respect of excessive and unlawful distress.

ii. The defendants are to pay the costs of the counterclaim on the basis prescribed by the

civil proceedings rules for a claim in the amount of $ 1,968,000.00. ($2,056,000.00 minus

$88,000.00), the portion of alleged arrears of rent claimed without justification).

iii. The claimant is entitled to its costs of the application for the injunction to be assessed

by this court in default of agreement, and to be paid by the defendants to the claimant.

Oppression

39.

1. Nadia and Robin as defendants in this action, and who are also trustees of the estate of

SS Hosein (the Estate)), are to file a Schedule within 7 days setting out:-

i. all persons who received distributions from the Estate out of the four million

($4,000,000) allegedly paid to and received by the Estate, or entities under its

control,

ii. the dates paid,



2. All persons named on the Schedule who received any sums as a distribution from the

estate of SS Hosein, (out of the four million ($4,000,000) in funds received by that estate

from the Company), are to repay those sums within 14 days hereof.

3. All such sums, received by persons named on the Schedule, who received any such

payments out of the four million ($4,000,000) distribution, are to be paid by certified

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cheque made payable to the American Stores Limited deposited with the Registrar of the

Supreme Court.

4. Any difference between the total amount received by persons on that schedule and four

million ($4,000,000) (“the undistributed amount”), is to be repaid by the trustees of the

Estate, out of the assets of the Estate, to the company within 14 days hereof, by certified

cheque made payable to the American Stores Limited, deposited with the Registrar of the

Supreme Court.

5. In default of repayment of that undistributed sum within 14 days by the Estate, the

undistributed sum is to be repaid to the company personally by Robin and Nadia, by

certified cheque made payable to the American Stores Limited, deposited with the

Registrar of the Supreme Court, within 21 days hereof.

6. If repayment is not made by beneficiaries of the Estate named in the schedule, who are

not party to the instant action, (of the sums received by them out of the four million

($4,000,000) in company funds distributed to them by the estate), within 14 days hereof

it is ordered that that the Estate is to repay to the Company any sums that such persons

have received within 21 days, subject to the right of the trustees of the Estate to recover

from such beneficiary any such sum it has paid on his behalf .

7. All sums representing repayment of any payment received out of the sum of $4

million, paid into court by certified cheque made payable to the American Stores

Limited, are to be paid out, within 14 days after receipt, to the Company, upon the

company providing a receipt for such payment.

8. The issues of interest, if any, and costs of the counterclaim are reserved until the

Schedule has been filed, and there has been compliance with this order.

9. Liberty to apply.

REASONS FOR DECISION

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ANALYSIS AND REASONING

Rent

Whether the increased rent demanded for the premises was ever agreed

Meeting of June 17th

40. The notes from the Meeting of June 17th

do not indicate an agreement to the

specific amount of rent claimed, merely an authorisation that any rent outstanding be

paid. Hence the reason why it was indicated that a printed copy outstanding rent needed

to be examined, and paid. This cannot be construed as an agreement to pay whatever

sum was being claimed, whether or not it had been agreed or contracted, or even

examined.

41. It was submitted that the Minutes of June 23rd

purport to indicate agreement by

Robin Hosein that rent must be paid “the rent owed and the new current market value of

the property should be paid to Sandra Hosein Singh”.

42. These minutes are signed only by Shanna, daughter of Sandra, who is

representing her in the claim on her behalf for the increased rent. They were also

prepared by Shanna, and there is no resolution passed by the Board of the company

indicating that this was the position of the Board, or that a specific amount had been

agreed and authorized to be paid.

43. Further Robin himself testified that what he recalled as his position is that all rent

legitimately due should be paid. In those circumstances one is entitled to treat with

sceptism a self serving draft minute produced by the defendants in support of their claim

for vastly increased rent.

44. In any event it does not support the position that that rent was ever agreed by the

company or its board. Even if the minute reflected accurately the position of Robin, (and

he says that it did not fully reflect his views), it would make no difference. The recording,

in non finalized minutes of a board meeting, of what one director or the other allegedly

said does not reflect in this case what the company actually decided.

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45. This minute does not support any alleged agreement to pay a vastly increased

rent.

46. The minutes reflect discussion. On this issue they do not reflect a decision or

agreement to pay increased rent. In fact if such agreement had been arrived at there

would hardly have been the urgent need to force the issue by the purported distress.

47. That measure, instituted and instigated by persons who sat on the board of

directors of the company, smacked of desperation. It would have hardly been necessary if

the company had agreed to pay the increased rent. That action suggests a last ditch effort

to extract a payment that was otherwise not forthcoming.

48. By letter dated 17th

July 2011 Kyle Singh wrote to the Company’s Board of

Directors as follows:-

“Dear All,

Please be advised that after the initial letter dated November 15th

2010 and several

attempts to contact both Nadia Hosein and Robin Hosein, I Kyle Singh the duly

appointed attorney of Sandra Hosein-Singh is (sic ) still awaiting a formal response to

the increase in rent for the property situated at Eastern Main Road Mt. Hope. Please

keep in mind that neither a response to the letter referred to above nor any notice to

vacate the premises before the initial defined date of increase indicate an agreement to

the rental increase effective 1st March 2011.

In addition, I acknowledge receipt of the letter on July 29th

2011 which states that

American Stores will cease to occupy the building that houses the Warehouse (Used and

Service Department) by 31st August 2011.

I call upon The Board to make all outstanding payment within 14 days of date of this

letter.

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The Breakdown is as follows:

Mt Hope Arrears: August 2010 – February 2011 (7 months @ $44,000.00) =

$308,000.00

New Rent Arrears: March 2011 – August 2011(6 months @ $220,800.00) = $883,200.00

Total = $1,191,200.00 Minus $200,000.00 (repayment for Check #18571) = $991,200.00

One Payment was received on June 22nd

2011 for $284,000.00

A balance of $707,200.00 is still outstanding to date.

Please be guided accordingly.

Best Regards

Kyle Singh”

49. The claimant submits that Kyle’s letter, purportedly issued on July 17th

2011, was

actually issued on August 17th

2011. I accept this has to be so as the date it bears is

clearly erroneous. (It refers to a letter (clearly the one dated July 28th

) received on July

29th

). Also the date it purports to be issued, Wednesday 17th

July, was not a Wednesday,

but a Sunday. However August 17th

was a Wednesday). That letter demands that the rent

in arrears be paid within 14 days, that is, on or before August 31st.

50. In fact the instant purported distress took place on August 23rd

- well before the

time limited. It is not in dispute by the claimant that there was then rent owing, but in the

sum of $88,000- 2 months’ rent as contended by the claimant.

51. In fact this letter by Kyle, replete with errors though it is, speaks volumes.

52. In letter from Kyle to bailiff Calix dated August 22nd

2011 he also sets out the

basis of this claim.

(Alleged increased Rent for the retail department)

Arrears of rent - August 2010 to Feb 2011 – $44,000 for 7 months (this is the old rate)

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$220,800 for 6 months - March 2011 to August 2011 - (Alleged new rent)

53. In fact he acknowledges receipt of a cheque for $284,000.00 (June 22nd

2011) and

gives credit for $200,000 - sums reimbursed to Sandra by insurance for medical

expenses, which were paid up front by American Stores, and which were to have been

reimbursed to American Stores.

54. That, in effect, is a payment/ settlement in respect of rent of $484,000.00, which

would represent 11 months’ rent at the rate of $44,000 per month.

55. If one does not accept that the rent for the main premises was ever increased to

$220,800.00, which I do not, then of the 13 months rent claimed from August 2010 to

August 2011, 11 month’s rent had been paid, leaving only 2 months outstanding. This is

the evidence of Nadia on behalf of the company.

56. I accept her evidence that only two months’ rent at $44,000 per month was in

arrears, as I specifically find that there was no separate rent, additional to the sum of

$44,000 which was being paid, for the service department. The rent of $44,000 by that

time included rent for the service department. There is simply no cogent evidence

otherwise.

57. The alleged increased rent – from $44,000 to $220,800.00 is rejected.

58. Shanna’s own evidence is:

i. that she was frantically seeking an “Emergency directors meeting” (Para 47

witness statement) on the day of the purported distress,

ii. that she had to call the chairman of the Board to complain that Nadia was not

issuing a cheque, and

iii. that she had to indicate to him that unless the Board met and a board decision was

made, the place would be “officially locked down”.

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59. This strongly suggests that she was aware that up to that point in time the

directors had never agreed to the claim for increased rent, and was aware that they were

not directing Nadia to issue any cheque based on that alleged increased amount, and at no

point had this increased rent actually been agreed.

60. The suggestion that it had been agreed, and that this was reflected in minutes of

the meetings of the company, and in admissions by the claimant is without substance. Dr.

Hosein made it clear that his position was that legitimate demands for rent should be

met, and that the company should vacate if it could not pay the rent legitimately due.

61. The alleged admission by Nadia in the minutes of the meeting of June 9th

2011 is

simply that rent was owing, not that the increased amount of rent being claimed was

owing. This was never in issue.

62. It is clear that there was never any agreement for the increased rental of

$220,800.00 per month. Further, this represents an increase of 400 per cent, and was

beyond the ability of the company to pay, as Shanna admits she later found out. Clearly

therefore the company could not have agreed to pay this increased rent.

Alleged Service department arrears

63. In letter from Kyle to bailiff Calix dated August 22nd

2011 he also sets out the

basis of the claim for Service department arrears - Oct 07 to Feb 2011 – 40 months at

$22,680.00.

64. This is not credible. Sandra, his mother, was in charge of paying the rent from the

company to herself as the landlord. It is therefore not credible that the arrears if any, for

the service department would be allowed to accumulate for 40 months without any

documentation or request in writing for payment.

65. There is no agreement to this figure for the service department, nor any indication

that this increased figure for the service department was even raised or demanded

contemporaneously with its alleged date of accrual, or at the inception of its accrual.

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66. If the $44,000 being paid for rent was supposed to not include the service

department then it is curious that no claim was ever made to this effect until after Sandra

became incapacitated in March 2010.

67. The landlord was under an obligation to produce its records in support of this

alleged claim for over 2 million dollars, when a substantial part of that claim was based

on its assertion that the rent for the service department and the rent for the retail

department were separate, and that the separate rent for the service department had been

allowed to remain unpaid.

68. It is also curious that there is no record from the landlord, the defendants, of

separate invoices for the service department, of invoices for this increased amount, of any

agreement to pay it on a deferred basis, or of any acknowledgement that the company

was even notified of this alleged increased rent for the service department.

69. This is particularly curious as it is clear from the company’s payment records that

the rent for the service department was invoiced for separately, up to the point when the

rent for the whole area occupied was increased to $44,000.00

70. After the rent for the whole premises was increased to $44,000.00 per month,

apart from a period of three months, the rent for the service department was not

separately invoiced.

71. While the records do reflect that there is a period of three months for which an

increased rent was invoiced for the service department in February 2008, this was never

repeated, and for the remainder of the period while Sandra remained in charge of making

rent payments on behalf of the Company to herself as the landlord of the premises, no

further invoice was presented for increased rent for the service department.

72. I find that this aberration is not sufficient to conclude that there was any

agreement on an increased rent for the service department. In fact the failure thereafter by

Sandra to either claim or continue to pay any increased rent for the service department

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suggests and is more compatible on a balance of probabilities, with the situation that the

rent was not actually increased as claimed , or that such an increase was not agreed by the

Company and therefore not persisted with.

73. The alleged arrears of rent for the service department dating from 2007 would

have accrued, if they were incurred at all, during the period when Sandra, the landlord,

was also managing director. Sandra was managing director up to 2010 when she became

incapacitated. She was responsible for ensuring that payment of rent by the company was

made to the landlord, herself.

74. If it had been agreed that the service department would attract a separate rent

from the total that was paid in rent, it defies credibility therefore that that she would have

allowed it to remain unpaid and to accrue over the years to the extent claimed.

75. The obvious inference is that this increased, separate but uninvoiced rent for the

service department:-

i. was never agreed,

ii. that it had not accrued, and

iii. that there was no sum due and owing as claimed as arrears for the service

department.

76. In fact not one resolution or minute of the company was produced to establish that

the increased rents claimed for the service department, (or the retail outlet), had ever been

agreed. The documentation produced to the court and relied upon simply establishes that

it had been agreed that any rent outstanding should be paid, and this meant any rent

legitimately being claimed.

77. The onus of proving its claim for rent was on the defendants / landlord .The

landlord would be expected to have its own records of invoices submitted for payment of

rent, or at the very least, sums received from the company as rent, to support its claim.

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78. The complete absence of tax returns, accounting records, invoices, receipts, or

even contemporaneous letters indicating that the rent for the service department remained

unpaid for years, demonstrate the lack of substance of this claim.

79. This claim for separate rent for the service department must therefore be rejected

and dismissed.

80. In those circumstances the purported distress,

i. was premature, (as Kyle’s letter , which I find was actually issued on August 17th

2011, one week before the purported distress, purported to give the company until

August 31st to pay,)

ii. was also clearly therefore for an amount of rent far in excess of the $88,000 then

actually owed. A cheque was tendered in the amount of over $1 million, half of the

amount claimed. This was rejected. In any event it far exceeded the amount of rent

that I find was actually then owing- $88,000.00.

Further analysis of Documentary evidence

Rent

What was the rent due and payable under the terms of the lease between the

Claimant and the First Defendant

Accounting records

81. The Claimant produced a print out of its electronic records of the rent payments.

No other records of the rent payments were produced. They support the Claimant’s

pleaded case.

82. The first mention of alleged arrears of rent for the Service Department is in the

demand letter issued by the Defendants to the Claimant dated November 15, 2010. This

letter purports to give notice to the Claimant of an increase in the rent for the premises to

$220,800 with effect from March 2011.

Letter dated the 15th

November 2010

“Dear Nadia,

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Re: Increase in Rent for Property located at Eastern Main Rd. Mt. Hope

We, the children of Sandra Hosein-Singh namely Sheldon, Kyle and Shanna act on behalf

of our mother.

Please be advised that there will be an increase in Rent for the property located at

Eastern Main Road. Mt. Hope effective March 1st 2011. American Stores Ltd currently

occupies the entire premises located at Eastern Main Rd. Mt. Hope covering 36,800

square feet in building which include: the Mt. Hope Branch,

Service Dep’t, Used Dep’t and a warehouse but has only been paying rent for the Branch

and the Service Dep’t

At present the rent for the Service Dep’t is in Arrears since October 2007.

The rental market value for the above mentioned property is $6.00 per sq./ft. As a result,

the new rent due is $220, 800.00

Rent is due on the 1st of each month; a grace period of 7 days will be given in which to

pay after which a 1% interest charge will be applied. Please be guided accordingly.

Best Regards.

Sheldon Singh

Kyle Singh

Shanna Singh”

83. By letter dated December 3, 2010 written by the Defendants’ Attorney to the

Claimant demand is made inter alia for rent for the Service Department at the rate of

$22,680 per month from October 2007. This letter conflicts with the Defendants pleaded

case, (at paragraph 17), that as at July 2011 the rent for the Service Department was in

the amount of $7,000.

Letter dated 3rd

December 2010

84. On the 3rd

December 2010, the Defendant’s Attorney at Law wrote demanding

arrears of rent as follows: -

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“Dear Madam

Re: Rental of property situate at Eastern Main Road, Mt. Hope.

I act for and on behalf of the duly appointed Attorneys of Sandra Hosein-Singh namely

Sheldon Singh, Kyle Singh and Shanna Singh.

The rental for the store is $44,000.00 per month and the rental for the service department

is (3.00 per sq. feet x560 sq. feet) $22,680.00 payable on the 1st of every month.

I am instructed that rent is outstanding for the service department from the month of

October 2007 to present in the sum of $884,520.00 (22,680.00 x 39 months). Further,

rent for the store is outstanding for the months of August 2010 to December 2010 in the

sum of $220,000.00 ($44,000.00 x 5 months).

I am to advise that the above outstanding sums be settled within 14 days from the date

hereof.

Please be guided accordingly

Yours faithfully

(S Ramkisson)

85. The Defendants contend that with effect from March 2011 the rent was increased

to $220,800 as a consequence of the demand made by the letter dated November 15,

2010. The letter, erroneously dated Wednesday July 17, 2011, written by the Third

Defendant to the Claimant, complains about not receiving a “formal response” to his rent

demand made by letter of November 15, 2010. This letter, delivered to the Claimant 6

days before the distress, confirms that the Claimant never agreed to pay the increased

rent. Also, this letter contains no reference to the alleged “arrears of rent for the Service

Department” which was previously demanded.

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86. The Defendants produced no documentary evidence of the payments made despite

the fact that they were made to the First Defendant.

87. The evidence of Nadia Hosein accords with the records in evidence. The evidence

for the defendants does not.

88. It was submitted that the records reveal that during her tenure as Managing

Director of the Claimant, the First Defendant paid to herself the rent due each month.

There is no month in which rent was not paid. There is no month in which the rent was

paid in parts or instalments. It was within the power and control of the First Defendant to

direct the payments to herself and she did so faithfully. I find that they do so reflect.

89. The contention of the Defendants that during the period October 2007 to March

2010 the First Defendant failed or omitted to pay herself rent for the Service Department

such that that rent fell into arrears is therefore:

(i) not consistent with the reality that Sandra was in a position to pay herself and that she

always did so promptly and

(ii) the documentary evidence

and is therefore not credible.

90. I find that the payments made by the Claimant from October 2007 to March 2010

at the direction of the First Defendant, to herself, represented the full amount of the rent

due to the First Defendant for the entire premises, and at March 2010 that rent stood at

$44,000 per month. The Defendants’ claim for arrears for the Service Department from

October 2007 is not supported by the evidence. It is without foundation and must be

rejected.

91. The Defendants’ own witness admitted in cross examination that the Claimant

had never agreed to pay the increased rent.

Rent - documentary evidence

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Draft minutes- whether acknowledgement or agreement to pay

9th

June 2011

92. A meeting of the Board of Directors of the company was held on the 9th

June

2011. Item 15 of those draft minutes is as follows:-

“15. Shanna Singh asked Nadia Hosein why she hadn’t paid rent for the property situate

at Mt. Hope since July 2010. She was unable to give a reasonable response. She admitted

that she was wrong and that American Stores does in fact owe rent to Sandra Hosein-

Singh”

93. This is not, as contended by the defendant, documentary proof of the Claimant’s

liability to the Defendants for arrears claimed by Ms. Ramkissoon in the sum of

$884,520.00. The proper context of that discussion recorded in the draft Minutes is that at

that time it is not in dispute that rent was owing for the premises. This was mostly paid

by cheque in the sum of $284,000 .00 dated June 22nd

2011. Sandra at that time had had

her substantial medical bills paid by the company and there needed to be a set off

between her and the company in respect of sums that she had received from her medical

insurance, but had not yet reimbursed to the company. The cheque dated June 22nd

2011

attempted to do this, and credit was given by the defendants for the medical insurance

reimbursement by letter dated August 17th

2011 from Kyle. That sum, after the set off,

effectively settled 11 months’ rent at $44,000.00 per month.

17th

June 2011

94. At a further meeting of the Board of Directors held on the 17th

June 2011, it was

noted:-

“The Board authorized the payout of outstanding rent due to Sandra Hosein-Singh for

the property situate at Mt. Hope. A printed copy of outstanding rent for the service

department due to Sandra Hosein-Singh needs to be examined and paid.”

95. It must be borne in mind that:

i. these are notes

ii. they are not verbatim notes but rather a recording of what the recorder

understood was discussed.

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iii. they are produced from the custody of Shanna,

iv. they were recorded by Shanna.

v. they are not resolutions of the company .

vi. neither are they approved and seconded final minutes

96. Furthermore, what is recorded is that the Board did not authorize payment of the

claim for arrears for the service department but rather required that the claim be

examined, and depending on the results of that examination, paid. If it were otherwise,

and the Board did not need to be satisfied as to the amount legitimately due, why would

the board have even required that the “printed copy” be examined? It could simply have

authorized payment, whatever the sum claimed.

97. The attempt to elevate draft notes Minutes of this type into binding

acknowledgements and decisions to pay by the Board of Directors of the Company is not

supported by the evidence.

98. It is not consistent with the actual actions of the Board of Directors in not

approving payment of the sums demanded, even in the face of a distress which

effectively shut down the headquarters of the company. If the Board had in fact already

agreed to pay these sums then obviously there would not have been the resistance to

paying as deposed to by Shanna, and a cheque for the full amount demanded would have

been authorized. .

23rd

June 2011

99. The draft minutes of a Special Directors Meeting held on the 23rd

June 2011 and

at which Mr. Robin Hosein, Ms. Nadia Hosein and Mr. Maybodi were present, allegedly

record that:

“Ms. Nadia Hosein raised the issue of Rent owed to Sandra Hosein-Singh for the store,

warehouse, service and used department located at Eastern Main Road, Mt. Hope.

Shanna Singh stated that a letter to increase the rent effective 1st March, 2011 was hand

delivered on 1st December 2010 to Ms. Nadia Hosein. She also added that on several

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occasions she has tried to contact Ms. Nadia Hosein about outstanding rent due to Ms.

Hosein Singh as well as the new rent that American Stores Limited was required to pay

as of 1st March 2011. Ms. Hosein avoided and also dropped the phone several times on

Ms. Singh. Robin stated that regardless of circumstances, the rent owed and the now

current market value of the property should be paid to Mrs. Sandra Hosein-Singh.”

100. Even if Robin did state this, a matter which he denied, such a statement on the

23rd

of June suggests that the issue had not been settled at previous meetings, and was

still a live one. I find in fact that his explanation under cross examination reflects his true

position, namely that all rent legitimately owed should be paid, and that if the company

could not afford the rent it should vacate the premises. The alleged statement by one

director, in draft Minute, which he does not fully accept under cross examination, is no

substitute for a resolution of the Board of Directors, or final confirmed minutes recording

an actual decision of the Board, rather than recordings of statements by individual

directors .

18th

July 2013

101. An email from Ms. Shanna Singh dated 18th

July 2013 was sent to the entire

Board of Directors, demanding the alleged outstanding rent at the rates set out in the

letter dated 15th

November 2010 in four parts.

Friday July 22nd

102. On Friday July 22nd

Ms. Hosein sent the following email to the Board of

Directors

“To the Board of Directors,

We would like to hold a meeting tomorrow at 4pm at Kapok Hotel to discuss some

pressing matters, namely, the rent rate at Mt. Hope warehousing facilities and alternate

premises. Also other matters.

Please indicate whether you can attend.

Thank You

Nadia Hosein

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Secretary”

103. The documentary evidence shows that the increased rent being demanded for the

retail premises, and the sudden, apparently retroactive, and in any event unsubstantiated,

claim for arrears of rent for the service department, had not been agreed. Those claims

were engaging the attention of the Board, but the Board, like this court, was never

provided with the basis, or with documentation to establish the legitimacy of this claim.

104. The Board was being asked in the case of the alleged arrears for the service

department, to write a cheque for almost one million dollars without any documentation

whatsoever to justify this demand. No responsible Board could have agreed to pay for

alleged arrears of rent for the service department in those circumstances.

With respect to the demand for increased rent for the retail premises, the demand was for

an increase in rent of approximately 400 per cent. Obviously more was required of a

Board considering such a claim.

105. In fact the evidence is that this alleged rent is no longer an issue between the

parties. The company gave up occupation of part of the premises, and has agreed to pay a

rent of $50,000.00 per month for the portion that it does occupy. It is therefore clear that

the company never agreed to pay $220,800 per month in rent as the defendants contend,

and that they were never in receipt of undertakings from the company that it would pay

this sum. The email correspondence demonstrates clearly that the defendants knew at all

times that the issue remained under discussion at the level of the Board

106. Ms. Hosein gave evidence at trial (at paragraph 32 of her witness statement filed

on the 1st March 2013) that “the Claimant at all material times made clear to the

Defendants that their outrageous demands for rent would not be acceded to.”

107. The exchange of legal letters, and in fact the very fact that the defendants had to

resort to the purported distress in a last ditch effort to extract a payment of the increased

rent demanded, both support her claim that the Claimant had made clear that it could not

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accede to the increased rent, and had not agreed that it was to form the basis of their

continued tenancy.

108. The company’s tenancy had not been terminated nor a new one substituted or

offered on the terms of the new rent. All that was being done was that increasingly

strident demands for a rent increased by approximately 400 per cent were being made,

together with a claim for “arrears of rent” for the service department amounting to over

$800,000.00, without a shred of supporting or substantiating material. In those

circumstances to contend that the evidence established agreement on the part of the

company to those demands is simply fanciful.

109. The evidence of Nadia Hosein is that although the Board discussed the issue of

the rent on a number of occasions there was never agreement to pay the increase

demanded. The Claimant admits that the rent for July and August 2011, in the sum of

$88,000.00 was in arrears on August 23, 2011.

110. The Defendants submitted that the weight of the documentary and oral evidence

established that the sum of $884,520.00 (arrears for the service department) was admitted

to be owed to the Defendants by the Claimant Company. I find that in fact the opposite is

the case.

111. No resolution passed by the Board agreeing to pay the increased rental demanded

in the letter of November 15, 2010 was produced.

112. The evidence is that:-

i. the board did not approve the payment of the sums being demanded.

ii. the company was in fact vacating part of the area it occupied, and did in fact vacate

the warehouse in December 2011. I note that even the Board’s alleged position was

not that it should vacate and pay the amounts demanded.

iii. that no where did the Board ever communicate to the defendants that it had agreed

to pay the increased sums demanded,

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iv. that the defendants were not informed by letter, legal or otherwise, or any written

communication, that their demands were being accepted,

v. that their claims were not in fact paid, and

vi. that the defendants, in the face of non acceptance of their demands for payment,

tried to force the issue by the purported distress.

DISTRESS

113. Whether the purported distress was illegal by reason of the fact that:-

i. the right to distrain had been suspended and/or

ii. the Defendants were distraining for increased rent over and above that

reserved in the original demise and/or

iii. whether the distress was irregular by reason of the fact that a valid tender of

the rent was made at the time of the levy and rejected by the Defendants.

Levying for rent increases beyond that reserved in the original demise.

114. It is not open to a landlord to levy for rent increases beyond that reserved in the

original demise. In Hill and Redman’s Law of Landlord and Tenant 14th

Ed at paragraph

244 it is stated

“Payments agreed upon during the currency of the tenancy by way of increased rent

...though expressly called rent, are not in fact rent, but sums in gross for which a distress

cannot be levied, for a rent can only be reserved at the time the demise is made.”

115. This suggests that even if the sums for increased rent had been agreed, and I

expressly find that they had not, a distress could not be levied for them.

Whether right to distrain suspended

116. Prior to the levy the Defendants issued a demand letter to the Claimant

erroneously dated Wednesday July 17, 2011. In fact July 17, 2011 was not a Wednesday

and in any event the contents of the letter made it clear that it could not have been written

in July. I accept the evidence of Nadia Hosein that she received the letter on August 17,

2011. This letter makes demand for payment of all arrears within 14 days, yet 6 days later

the Defendants purported to distrain.

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117. There are circumstances in which the right to distrain can be suspended. See Hill

and Redman on Landlord and Tenant 14th

edition paragraphs 289 page 410.

“The right to distrain may be lost, postponed, or suspended by an express or implied

agreement by the landlord not to distrain, or by conduct on the part of the landlord

inducing the owner of chattels to believe that he will not take them under a distress”:

118. By their letter of August 17, 2011, the Defendants induced the claimant to believe

that they had a grace period of 14 days to resolve the issue of the rent being claimed. The

effect of that letter was to suspend the possibility of, inter alia, distress for 14 days from

August 17, 2011 when the letter was written and served on the Claimant.

119. Distraining before the expiration of that period despite their letter, was

incompatible with that letter, and amounted to bad faith, especially in the context of the

testimony of Shanna that one goal of the distress was to remove Nadia from the

management of the company.

Refusal of Tender

120. Despite the fact that the Claimant had not agreed to the increased rent, on the day

of the levy Amir Maybodi made an offer to immediately pay half the sum claimed being

$1,028,000 which offer was rejected. I find that that sum far exceeded the amount of rent

which was in fact in arrears.

121. Having refused an offer of payment of a sum which far exceeded what was due

and owing the Defendants proceeded to lock the main gates of the premises and the

Claimant was not permitted to remove any items from the premises.

122. Tender of the rent, with any proper costs, will deprive the landlord, according to

the stage at which it is made, either of the right to distrain or the right further to pursue

the remedy by distress, thus: - A tender to the landlord or his authorised agent by the

tenant or his agent of the rent without any costs (even though the landlord has incurred

costs) before seizure, extinguishes the right to distrain and makes the subsequent

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distress illegal. See Bennett v Bayes (1860) 5 H & N 391. A tender after distress taken,

but before it is impounded or removed, of the rent and costs of the distress makes the

subsequent removal or detainer unlawful. See paragraph 288 Hill and Redman 14th

Edition page 408

123. Shanna admitted in cross examination that there was never any agreement

between the Claimant and the Defendants for the payment of increased rent as demanded

in the letter of November 15, 2010.

124. Why it was considered necessary in those circumstances to retain a bailiff and

levy a purported distress on a company of which Shanna was a senior manager is

perplexing, apart from reflecting a significant conflict of interest.

125. The company was effectively shut down at that location. Its service department

and a retail outlet inter alia could not function, and its losses would have been significant

if an injunction had not been granted by this court 4 days later. The fact is that at the time

of the purported distress the increased rent demanded had not been agreed. In the context

of a family owned company with the defendants having an ownership stake and

representation at the board level and at the management level, the purported distress

could only have been contemplated as a last resort. The evidence is that it was an

unnecessary and self defeating step.

Whether the purported distress was excessive

126. The Claimant contends that the purported distress was also excessive.

To be prove excessive the value of the goods seized must be clearly disproportionate to

the rents owed taking into consideration the conditions in which a forced sale of the

effects would have to take place: Field v Mitchell (1806) 6 ESP 71) Halsburys 5th

ed. Vol

62 paragraph 408

127. I have found that the rent in arrears at the time of the levy was $88,000.

Obviously the seizure of four (4) delivery trucks, and stock including furniture and

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equipment must have exceeded the amount of the arrears. I accept the evidence that this

is so.

Whether the Claimant is entitled to damages for illegal or excessive distress and if so

in what amount

128. The Claimant’s submission on this aspect is “The Claimant’s pleaded case is that

the Fifth Defendant locked the main gates of the premises, thereby impounding all the

Claimant’s stock, equipment, vehicles and all other items stored on the premises. This

was admitted by the witness for the Defendants in her evidence in chief and in cross

examination. She indicated that she was present at the time the gates were locked, and

confirmed that she saw no items being removed from the premises prior to the Fifth

Defendant securing the premises.

129. The evidence of Nadia Hosein1 in support is that for a period of 4 days before the

Court intervened the Company had no access to the premises and to its stock valued

between $3-4 million which had been purchased for the upcoming busy sales period

between Divali and Christmas. The evidence is that the Claimant’s warehouse and

distribution functions were based at this location and so the stock for all branches as well

as the 4 delivery trucks were stored here. She gave evidence that she was forced to pay

wages of staff in the daily amount of $3,164.06 and $4,000 to hire alternative transport

as the Claimant’s vehicles were impounded. Her evidence is that the Claimant lost sales

revenue of approximately $100,000 per day during this period.

Damages

130. The evidence as to the damage actually sustained by the claimant is inadequate.

131. While I find that the distress was excessive, because the goods were returned,

even though only as a result of an approach to the court, damages recoverable would be

nominal only.

1 Witness Statement of Nadia Hosein at paragraph 39

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132. Where no sale of the goods distrained upon ever takes place the claimant is

entitled to nominal damages even if he has proved no actual damage. Chandler v

Doulton (1865) 3 H & C 553: Paragraph 371 Hill and Redman supra; Halsburys 5th

ed.

Vol 62 para 413

The claimant’s evidence does not meet the standard of proof required for special damages

– see for example Raghunath Singh v MTS H.C 2193 of 2007 where the principles, and

guidance from the Court of Appeal on this issue, are summarized. No accounts from the

company were produced in support for the claim for loss of sales. In relation to a

substantial claim in this regard the failure to produce documentary and accounting

information, which must exist, means that the claim has not been strictly proved, as it

must be.

133. In those circumstances nominal damages only can be awarded. Nominal

damages in the sum of $20,000.00 are awarded against the defendants to be paid by

the defendants to the claimants

134. The injunction was clearly properly sought by the claimant and the claimant is

entitled to its costs of the application for the injunction to be assessed by this court

in default of agreement, and to be paid by the defendants to the claimants.

THE COUNTERCLAIM

Whether the Defendants to the Counterclaim have exercised their powers as

Directors of the Claimant in a manner that is oppressive or unfairly prejudicial to,

or that unfairly disregards the interests of the Defendants.

135. The Defendants have counterclaimed seeking the following reliefs:

“i. Relief under section 242 of the Companies Act

ii. Reinstatement of the Fourth Defendant,

iii Reinstatement of the Second Defendant,

iv. The appointment of an independent Board of Directors to carry out the business

and affairs of the Company and

v. Account of the monies of the Company”

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136. The Defendants submit that the evidence established a case of oppression of the

Defendants by Nadia Hosein and Robin Hosein and the Board of the Claimant as

follows:-

1) The removal from their management positions without any good reason of the Second

Defendant and the Fourth Defendant.

2) Refusal to provide (i) accounts for the funds of the Company and (ii) other financial and

management information. There is no evidence of (ii). In fact the defendants are

adequately represented on an independent board by Shanna and her father, constituted

largely through the efforts of Shanna, and this was acknowledged by Shanna in cross

examination.

(3) Theft (being the taking without the authority of the Board of American Stores

Limited of $4,000,000.00 by Nadia Hosein with the complicity of Dr. Robin Hosein.

However, their evidence is that they acted under the authority of the previous Board

which included the first named defendant. This is dealt with hereunder.

The dismissal of Sheldon

137. In so far as it is alleged that the termination of employment of the second

defendant constitutes oppressive conduct the claimants claim that he was terminated with

cause as a result of his behaviour. While the defendants contend that the allegations

against him are vague and non specific it is clear that they are sufficiently specific to

require his response in these proceedings if he were to make out a claim of oppression in

this regard.

138. Allegations that he made threats to the life of to Nadia required rebuttal if he were

pursuing a claim of oppressive conduct.

139. Any exclusion from the management of the Company is alleged to be the result of

his own behaviour, which he has not taken the time to refute. He has not participated in

these proceedings and there is prima facie evidence that he was in fact terminated with

cause. In any event Shanna is a director on the board, as is her father, who is also the

father of the second defendant. If his dismissal had been without cause their presence and

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representation on the board is sufficient for them to have raised his reinstatement as an

issue if he were worthy of reinstatement. There is no evidence that this has been done.

The entire issue of his termination as a ground of a cause of action in oppression appears

to be an afterthought, which in any event is not substantiated on the evidence.

The dismissal of Shanna

140. In September 2011 Shanna Singh was removed from the management team by the

Claimant. It is alleged this constitutes an act of oppression, although Shanna seems to

have become disinclined to pursue this relief based on her testimony under cross

examination. She continues to be a Director of the Claimant.

141. Any exclusion of Shanna from the management team of American Stores was

clearly the result of her own conduct and role in participating in a levy against the

company of which she was supposed to be a part of the executive management team. She

still remains a director. In those circumstances it cannot be said that there was any

oppressive conduct in relation to her.

142. In fact the contrary is probably the case. Her own conduct, demonstrated the

clearest possible conflict of interest, and resulted, not surprisingly, in her exclusion from

the management. Taking action to close down the operations of the company in

pursuance of a demand for rent which, never having been agreed, was completely

illegitimate, putting the reputation of the company, and the security and peace of mind of

its employees and suppliers at risk, was highly irresponsible behaviour by a purported

manager of the company, and a conflict of interest.

143. While an exclusion from the management of such a family operated company

without a corporate purpose may amount to oppression the termination of both Sheldon

and Shanna was explicable and not unreasonable in the circumstances of their conduct.

No basis has been advanced to justify their reinstatement.

Whether Board Independent

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144. Until Sandra Hosein-Singh fell ill in March 2010), the Estate of S.S. Hosein was

managed by the Trustees of his Will, Nadia Hosein, Robin Hosein - and Sandra Hosein-

Singh.

145. Prior to March 2010 the Directors of the Claimant were the same - Nadia Hosein,

Robin Hosein and Sandra Hosein-Singh.

146. It is not disputed that the day to day operations of the Claimant Company were

then primarily run by Sandra Hosein-Singh. In March 2010 after Sandra fell ill she never

returned to work and Nadia took over the day to day operations until June 2011.

147. At the date of commencement of this action the Directors of the Claimant were:

Yacoob Ali (representing ASJA, Chairman of the Board of Directors of the

Claimant and the Fourth Defendant to the Counterclaim)

Nadia Hosein (the First Defendant to the Counterclaim)

Robin Hosein (the Second Defendant to the Counterclaim)

Amir Maybodi (the Third Defendant to the Counterclaim)

Abdur Rahman-Ali (representing Darul Uloom T&T)

Vickram Singh (husband of Sandra Hosein-Singh and father of the Second, Third

and Fourth Defendants)

Shanna Singh (daughter of Sandra Hosein-Singh and Vickram Singh, sister of the

Second and Third Defendants, the Fourth Defendant)

Farouk Kazim (representing the Islamic Academy of T&T).

148. At a Directors Meeting held on June 9, 2011 a decision was purportedly taken to

remove Nadia Hosein as Managing Director and replace her with a joint management

team comprising Amir Maybodi and her niece Shanna Singh.

149. Subsequently, it was agreed that the Claimant’s day to day operations would be

managed by a 3 person management team comprising Nadia Hosein, Amir Maybodi and

Shanna Singh.

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150. The independence of the Board is reflected inter alia in

i. the composition of the Board, which includes Shanna and her father Vickram Singh,

and representatives of religious organisations, (included on the Board as the result of the

actions of the defendants themselves), and

ii. the actions of the Board, in

a. altering the management structure, removing first Nadia as sole managing director, and

then Shanna, in the circumstances outlined above, and

b. their resistance to the payment of the unsubstantiated claim for rent and arrears.

151. No reason has been demonstrated, in the circumstances established on the

evidence, to require the involvement of the Court in the composition of the Board of the

Company.

Oppression

152. It is alleged by counterclaim that Nadia and Robin Hosein, as directors of the

company, have acted in a manner that was oppressive to the interests of the defendants in

transferring from the funds of American Stores, without the authority of the board of

directors, the sum of $4 million dollars.

153. Nadia and Robin admit that the sum of $4 million was paid out but aver that they

paid it to the estate of SS Hosein, or entities under its control, and thence to the

beneficiaries of the estate, which included the first defendant.

154. The issue is therefore whether in those circumstances a case of oppression has

been established.

155. The shareholders of American stores are as follows:

SS Holdings Limited - 3641 shares

Estate of SS Hosein – 1 share

Sandra – 1

Vickram Singh - 40

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Ms. Pierre – 1 share

(Singh and Pierre do not have any interest in Holdings)

156. As the majority shareholder of American stores is SS Holdings Limited

(Holdings) it is necessary to examine the shareholding of Holdings. This is as

follows: Shareholders of SS Hosein Holding Limited, (the majority shareholder in

American Stores Limited), are:

Nadia Hosein – 305 ordinary shares

Sandra Hosein-Singh – 305 ordinary shares

Robin Hosein – 282 ordinary shares

Tana De Freitas – 94 ordinary shares , Amir Maybodi – 94 ordinary shares,

Anisse Maybodi – 94 ordinary shares, Gina Hosein – 141 ordinary shares, Jason Hosein,

141 ordinary shares ASJA – 282 ordinary shares Islamic Academy – 282 ordinary shares

Darul Uloom – 282 ordinary shares

157. The evidence is that the beneficiaries of the estate of SS Hosein are more or less

the same as that of Holdings, namely Sandra Hosein Singh, Ameer Maybodhi, Tana De

Freitas, Anisse Maybodhi, Robin Hosein, Nadia Hosein, Jason Hosein, Jenna Hosein and

the three Islamic bodies.

158. In answer to the court Nadia clarified this as follows:-

Q: And who are the share holders of SS Hosein Limited?

A: The Share holders are the same names that I called as the beneficiaries of the

estate in more or less the same proportion. Proportions are that eight bodies

meaning the five children and the three Islamic associations. That’s how the shares

were divided. So its 12 ½ per cent per body. So if there are three children of one of

the children, which is in the case of Ameer and Tanna Anees that would 12 ½

broken in three . And likewise with my other brother whose children are in Canada

.Theirs would have been in two. And now with these children- they are representing

their mother. Sandra Hosein Singh’s share. So the beneficiaries more or less the

same as Holdings which owned the majority shares of American Stores Limited as

well as other company’s (assets) which are basically properties.

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Q: The share holding in SS Holdings Limited is in the same proportions as the

beneficiaries’ share in the estate?

A: Yes almost, - except that Sandra and I had one share which became 23 shares in

the provision. So we each have an extra amount.

159. Clearly therefore these entities are interlinked, and the defendants as beneficiaries of the

trust, would have benefitted from any payment and distribution made to it from the

company, or entities under its control. This is actually admitted by Shanna. It is also the

evidence of Maybodi, that this transfer was not of great concern since the beneficiaries of

the estate and the shareholders of American Stores were the same. It was, in his view

tantamount to a transfer from “left pocket” to “right pocket,” and was therefore not a

“super problem”.

160. The evidence in context is also:-

i. that the estate has reported to the board,

ii. that there were minor differences between the proportions of the holdings of some of

the shareholders –in particular Sandra, and her entitlement as beneficiary of the Estate.

iii There is evidence that Vickram Singh, who held 40 out of the almost 4000 shares in

American stores, was not a beneficiary of the Estate, and

iv. The defendant’s evidence is that not all of the $4million was distributed to the

beneficiaries of the Estate.

161. It was alleged that the company owed the Estate a debt and it had been agreed that

the company would pay the Estate sums until the debt had been repaid.

However no documentation of the alleged debt was produced, nor any resolution of the

company recognizing the alleged debt, or agreeing to its repayment.

162. It is accepted that with regard to the specific payment of $4 million there was no

such resolution. On the evidence common to all parties there was no authorization for

that payment by the new Board.

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163. However Nadia says that it was a repayment to the Estate of SS Hosein and

affiliated companies based on a decision of the previous board, which then comprised

Sandra herself, Nadia, and Robin. There is absolutely no documentation to substantiate

this, either from the accounts and records of the estate or the affiliated companies, and

certainly not from the claimant company itself. This explanation cannot be accepted on

the state of the documentary evidence.

164. The entire context of the matter however is as follows:

a. the company’s meetings were few and far between;

b. the company had operated with 3 directors, Nadia, Robin, and Sandra, up to

March 2010, and up to March 2010 Sandra was effectively in charge of the day to day

operations of the Company;

c. important matters were not documented, for example the lease agreement between

Sandra and the company. (According to Nadia when she looked for the written lease and

did not find it “this was not surprising)”

165. The defendants claim that the actions of Nadia and Robin constitute theft and

should be referred to the Director of Public Prosecutions. This is a departure from their

pleadings, which alleges that the action of removing that sum from the company

constituted oppressive conduct.

166. Nadia and Robin aver that that sum was a repayment to the Estate of SS Hosein of

sums that the company owed to the estate. They contend that it was part payment, and

was consistent with a decision that had been taken by the board when it comprised

Sandra, Nadia and Robin. They claim that the beneficiaries of the estate benefitted from

this payment, and that would have included Sandra.

167. It is alleged that there is a difference between the shareholders of American Stores

and the beneficiaries of the Estate, as Vickram Singh owns 40 shares of American Stores

but is not a shareholder of Holdings. In any event he owns 40 shares out of almost 4000,

and is therefore a shareholder to the extent of less than 1 per cent of American Stores.

Further, he has not participated in this action.

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168. The counterclaim is by Sandra, Kyle, Sheldon, and Shanna, of whom only Shanna

gave evidence.

169. The allegation that the transfer occurred with the consent and participation of

Sandra pursuant to an earlier resolution / decision of the board, has not been refuted.

Neither has it been substantiated. It is clear that the business of the Estate, of Holdings,

and of American Stores itself is intertwined, and that the strict separation that would be

expected of separate legal and corporate entities has not always been maintained.

170. The evidence of Shanna, is that the board, constituted with the new directors, has

discussed the distribution by the trustees of the Estate to the beneficiaries at a directors’

meeting of American stores, that the Trustees of the Estate have reported to the Board of

the Company, and that Kyle has written to the Board of the Company (July 17th

2011) in

relation to distributions by the Estate. Further, Maybodi indicated in cross examination

that he considered that it was a transfer from one pocket to the next as the beneficiaries

and shareholders were the same persons.

171. In Shanna’s evidence, apart from the bald allegation that the sum of $4 million

was transferred by Robin and Nadia to the Estate, is notably silent on whether Sandra,

whom she represents, was the beneficiary of any part of that payment. This had to be

extracted under cross examination. In fact all parties to this transaction were suspiciously

vague as to precisely who received the proceeds of this payment.

THE OPPRESSION REMEDY

172. I consider that the law relating to the oppression remedy has been

comprehensively analysed by the High Court in a series of cases, extracts of which are set

out hereunder as relevant.

Law

173. The Oppression remedy is created by the Companies Act. This remedy is

based on Canadian legislation, namely the Canadian Business Corporations Act 1985,

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and the Ontario Business Corporations Act 1990. (Section. 242 of the Companies Act

35 of 1995 is in all material aspects identical to s. 241 CBC Act. Section. 248 of OBC

Act contains minor differences in wording but in substance is the same. )

174. Section 242 of the Companies Act, No. 35 of 1995

(1) A complainant may apply to the Court for an order under this section.

(2) If, upon an application under subsection (1), the Court is satisfied that in respect of a

company or any of its affiliates-

(a) any act or omission of the company or any of its affiliates effects a result;

(b) the business or affairs of the company or any of its affiliates are or have been carried

on or conducted in a manner; or

(c) the powers of the directors of the company or any of its affiliates are or have been

exercised in a manner;

that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of,

any shareholder or debenture holder, creditor, director or officer of the company, the

Court may make an order to rectify the matters complained of.

(3) In connection with an application under this section, the Court may make any interim

or final order it thinks fit, including

(a) an order restraining the conduct complained of;

(b) an order appointing a receiver or receiver-manager;

(c) an order to regulate a company’s affairs by amending its articles or Bye-laws, or

creating or amending a unanimous shareholder agreement;

(d) an order directing an issue or exchange of shares or debentures;

(e) an order appointing directors in place of, or in addition to, all or any of the directors

then in office;

(f) an order directing a company, subject to subsection (6), or any other person to

purchase shares or debentures of a holder thereof;

(g) an order directing a company, subject to subsection (6), or any other person, to pay

to a shareholder or debenture holder any part of the moneys paid by him for his shares

or debentures;

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(h) an order varying or setting aside a transaction or contract to which a company is a

party, and compensating the company or any other party to the transaction or contract;

(i) an order requiring a company, within a time specified by the Court, to produce to

the Court or an interested person financial statements in the form required by section 151

or an accounting in such other form as the Court may determine;

(j) an order compensating an aggrieved person;

(k) an order directing rectification of the registers or other records of a company under

section 245;

(l) an order winding up and dissolving the company;

(m) an order directing an investigation under Division 2 of Part V11 to be made; or

(n) an order requiring the trial of any issue.

175. In HCA No. CV s-852 of 1998 Sharma Persad Lalla v Trinidad Cement

Limited, TCL Holdings and Andy Bhajan, delivered 30th

November 1998, a decision

of the Honourable Justice Jamadar, the court considered the statutory origin, nature and

effect, of section 242 of the Companies Act. Three issues were identified.

1. Whether the complaints made by the plaintiff relating to his removal as an

employee/director of the first and second defendants disclosed any cause of action under

section 242 of the Companies Act.

2. Whether the relief claimed , namely an order to restore him to his executive

responsibilities with the first and second defendants, amounted to specific performance

of a contract of personal service and is relief which is neither available under section

242 of the Companies Act 1995, nor at common law.

176. Section 242

The learned Judge noted that

“Section 242 of the Companies Act is in virtually identical terms with section 241

(formerly section 234) of the Canadian Business Corporation Act, 1985 (CBCA) and

section 248 of the Ontario Business Corporation Act, 1990 (OBCA) – both scheduled

hereto – the so called ‘Oppression remedies”. Page No 5

177. The Court there found that:-

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i. Section 242 (2) creates a statutory cause of action which may be brought by anyone

who qualifies as a complainant. The plaintiff there qualified as a complainant as this

includes a director or an officer or former director or officer of a company or any of its

affiliates: page 6

ii. Section 242(2) sets out the grounds which constitute oppression. At page 7 the learned

judge states:

It is clear from section 242(2) that if the court is satisfied that there is or has been

conduct that is oppressive, or unfairly prejudicial to or that unfairly disregards the

plaintiff’s interest, then the court may make an order to rectify the matters complained of.

The statutory cause of action is Oppression. The remedy is rectification. Thus section

242(3) provides for some types of rectification orders that may be made. However, the

court may make “any interim or final order it thinks fit”. (All emphasis added)

And citing from the Canadian case of Naneff v Con-Crete Holdings 23 B.L.R (2d) 286

wherein Galligan JA in the Ontario Court of Appeal at page 296.20 stated

“The provisions of s. 248(3) (the Canadian equivalent of our S.242) give the court a very

broad discretion in the manner in which it can fashion a remedy. Broad as that

discretion is, however, it can only be exercised for a very specific purpose; that is, to

rectify the oppression”.(see page 8 of judgment)

…In seeking to address equity between private parties the provision does not seek to

punish but to apply a measure of corrective justice (citing with approval an article in

Canadian Business Journal)

…the discretionary powers in s. 248 (3) OBCA must be exercised within two important

limitations

1. They must only rectify oppressive conduct; and

2. They may protect only the person’s interest as a shareholder, director or officer as

such.

178. Thus given these limitations a Court once satisfied that there has been Oppression

can make whatever order it thinks fit once it is just and equitable having given due

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consideration to the real rights, expectations and obligations that exist between the

parties.

179. The learned judge also examined the scope of oppression noting that the three

categories of conduct which give rise to the Oppression remedy are introduced in the

statute by the words,

i. oppressive,

ii. unfairly prejudicial, and

iii. unfairly disregard.

180. He concluded that from these words fairness has been introduced by the statute as

the minimum underlying principle upon which the court can now review the acts and

conduct of companies. The classes of persons mentioned in section 242 (2), namely

shareholders, debenture holders, creditors, directors and officers, are all to be treated

fairly and justly. Failure to do so may amount to oppression.

181. He cited Westford v Watts (as cited in Fraser and Stewart, Company Law of

Canada at pages 720- 721) as follows - Page 10 - “They continue

In Westfair Foods Ltd v Watt, (1991) 4 W.W.R. 695(Alta C.A.), it was held that the test in

determining whether or not an action is oppressive is fact specific and courts should be

guided by the reasonable expectations of the parties. On an application, the Court must

consider the nature of the acts complained of and the method by which they were carried

out.

182. His Lordship also noted that directors have a duty to act with bona fides, and cited

s. 99 of the Companies Act. He adopted the dicta in Naneff at page 298.28 that, in

determining whether there has been oppression “the court must determine what the

reasonable expectations of that person were according to the arrangements which

existed between the principals”. The determination of reasonable expectations will also

have an important bearing upon the decision as to what is a just remedy in a particular

case. (Page 12)

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183. He concluded that it is essentially a question of fact whether or not there has been

Oppression. The courts must consider both the nature of the acts complained of and the

method by which they were carried out, in the context in which they arise. “Oppression

must necessarily be, in my mind context specific”.

184. In the instant case therefore the arrangements which existed among the principals

must be considered, in determining whether the conduct of transferring the sum of $4

million dollars from the account of American stores to the Estate of the deceased founder

would constitute oppression. It is relevant to an understanding of those arrangements to

note that

i. the company, the estate, and holdings are interlinked,

ii. that the beneficiaries of each are largely the same, and

iii. that the first defendant, represented by the other defendants, who complain of this

action being oppressive in relation to them, actually received a distribution from this

payment in an amount that she has failed to disclose.

It is in that context the claim of oppression must be viewed.

185. In HCA No. 3015 of 2000/CV 2006-00099 Demerara Holdings Limited,

Bertrand Doyle, Harold Russell and Gervais de Matas v Demerara Life Assurance

Company of Trinidad and Tobago Limited Mega Insurance Company Limited,

Wilbert Winchester, Peter Gillette and Cyril Gill a decision of the Honourable Justice

Moosai delivered 1st April 2011 the issue of Oppression was also considered. This case

involved proceedings to set aside a Merger Agreement on the grounds that it would be

oppressive or unfairly prejudicial to or unfairly disregard the interests of the policy

holders of Demerara Life within the meaning of s. 242.

INTERPRETATION OF THE SECTION

SECTION 242 AS REMEDIAL LEGISLATION SHOULD BE GIVEN A

LIBERAL AND PURPOSIVE INTERPRETATION

186. The learned judge relied on First Edmonton Limited v 315888 Alberta Limited

(1988) 40 BLR 28. He considered (page 20 paragraph 35) that Section 242, like its

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Canadian counterpart, should be given a liberal and purposive interpretation citing

from First Edmonton at page 45; 50-51 per Mc Donald J -.

“The introduction of a statutory remedy against oppression is a deliberate departure

from the policy of judicial non-intervention in corporate affairs. Section 234 “casts the

Court in the role of an active “arbiter of business policy’”. It is drawn in very broad

terms and as remedial legislation should be given a liberal interpretation in favour of the

complainant…..

The addition of “unfairly prejudicial” and “unfairly disregards” gives the Court a broad

basis on which to apply notions of equity and fairness to the conduct of the directors

and the majority … Clearly, the addition of “unfairly prejudicial” and “unfairly

disregards” puts the Court in a position to judge the fairness of the actions of

management ... In view of the broad discretion in s.234, each case will turn on its facts.

FAIRNESS – FACTORS AND COSIDERATIONS IN DECIDING WHAT IS

UNFAIR

187. The court referred to the First Edmonton case where Mc Donald J identified

factors relevant to determining unfair conduct, namely:-

1. The history and nature of the corporation,

2. The essential nature of the relationship between the corporation and the

creditor,

3. The type of rights affected, and

4. General commercial practice.

188. The test of unfair prejudice or unfair disregard should encompass the following

considerations:

1. The protection of the underlying expectations of a creditor in its

arrangement with the corporation,

2. The extent to which the acts complained of were unforeseeable or the

creditor could reasonably have protected itself from such acts, and

3. The detriment to the interests of the creditor.

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4. Other elements and considerations may be relevant, based upon the facts of

the particular case.

(This case of course involved a creditor, rather than a shareholder but the approach to

oppression, unfair prejudice, or unfair disregard of the rights of any of the parties,

including a shareholder, must be equally applicable).

THE REASONABLE EXPECTATIONS STANDARD

189. The learned judge in Demerara concluded that in determining whether oppression

exists the court would therefore have regard to among other matters, the reasonable

expectations standard of a shareholder in the position of the applicant. The learned

judge also relied on the Canadian case of Walker v Betts (2005) BCSC 128 at paras 87

to 88 which referred to the reasonable expectations standard, and, “… in determining a

shareholder’s reasonable expectations the court must apply a modified objective test. the

test requires objectively identifying) expectations that a shareholder in the applicant’s

position reasonably would expect to have .Identifying those reasonable expectations is

the starting point in determining if conduct was oppressive or unfairly prejudicial. (See

page 21- 22 paragraph 38).

190. A shareholder in the position of Sandra could reasonably expect that money

would not be paid out from the Company without a proper basis. Such a basis could

include settlement of a debt, with the approval of the directors. It is alleged that that was

in fact the basis, and that the approval of the directors of the old Board, which included

Sandra herself had been obtained, for the payment of that debt. The difficulty is that the

evidence of this debt, or of the approval of the directors of the old Board, is deficient.

Apart from the evidence of 2 of the directors of the old Board, Nadia and Robin, there is

no other evidence to support the basis for this payment. There is no written resolution of

the Board, or documentation, even for example, an account entry or note from the Estate,

or the Company.

191. INTERPRETATION OF SECTION 242 (3) (h) (paragraph 39 page 22 of the

judgment of the Honourable Justice Moosai)

39. Section 242 (3) (h) of the Companies Act authorises the Court to make any interim or

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final order, including an order varying or setting aside a transaction or contract to which a

company is a party, and compensating the company or any other party to the transaction

or contract. Its Canadian counterpart (section 241 (3) (h) of the CBCA) has been held to

be wide enough to permit a court to rescind a contract at the instance of a third party.

The court relied on Markus Koehnen’s Oppression and Related Remedies at page

374

“Section 241 (3) (h) of the CBCA allows the court to make an order varying or setting

aside a transaction or contract to which the corporation is a party. The court may also

compensate the corporation or any other party to the transaction. The remedy is

noteworthy because it changes the common law rules of rescission. At common law,

only a party to the contract could claim rescission. Under the oppression remedy, the

court has sufficient latitude to rescind a contract even at the instance of a third party.”

192. In the instant case therefore the court has latitude to even rescind a contract .It

would therefore certainly have sufficient latitude to reverse the payment, and allow the

new Board to reconsider whether the basis for this payment exists and applying their

minds afresh, decide anew whether this payment should be made to the estate in

settlement of a legitimate debt. In furtherance of this the monies already paid out need to

be returned to the company, as it has not yet been adequately demonstrated by evidence

that it was actually paid out in settlement of a legitimate debt.

193. The Court in Demerara found that the intention of the legislature was to balance

competing interests within the corporate structure including the rights of creditors,

minority shareholders and the public and that the jurisdiction though expansive should

be exercised with care. Stakeholders within the corporate structure must be protected but

at the same time courts ought not to usurp the function of the board of directors in

managing the company nor should it supplant the legitimate exercise of control by the

majority. The Canadian case of Bank of Montreal v Dome Petroleum Ltd (1987) 67

CBR 296 (Canada) at pp 305-306 was cited.

“I agree that the oppression remedy is designed to protect reasonable expectations.

However, one of the most reasonable of all expectations of those dealing with

corporations must be that the directors will manage the company in accordance with

their legal obligations. Some of these obligations are specifically prescribed by statute.

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Others are more generally derived from the common law. However, they essentially add

up to the same thing: namely, to act honestly and in good faith in the best interests of the

corporation and to exercise the diligence expected of a reasonable prudent person.”

194. The Court relied on another Canadian case of BCE IN and Bell Canada et al v

Canada Inc et al [2008] 3 SCR 560 paras 62, 64 and 67 for guidance on reasonable

expectations and the components of oppression. (All emphasis added throughout.)

62. As denoted by "reasonable", the concept of reasonable expectations is objective and

contextual. The actual expectation of a particular stakeholder is not conclusive. In the

context of whether it would be "just and equitable" to grant a remedy, the question is

whether the expectation is reasonable having regard to the facts of the specific case,

the relationships at issue, and the entire context, including the fact that there may be

conflicting claims and expectations.

64. Determining whether a particular expectation is reasonable is complicated by the

fact that the interests and expectations of different stakeholders may conflict. The

oppression remedy recognizes that a corporation is an entity that encompasses and

affects various individuals and groups, some of whose interests may conflict with others.

Directors or other corporate actors may make corporate decisions or seek to resolve

conflicts in a way that abusively or unfairly maximizes a particular group's interest at the

expense of other stakeholders. The corporation and shareholders are entitled to maximize

profit and share value, to be sure, but not by treating individual stakeholders unfairly.

Fair treatment — the central theme running through the oppression jurisprudence — is

most fundamentally what stakeholders are entitled to "reasonably expect".

72. Factors that emerge from the case law that are useful in determining whether a

reasonable expectation exists include: general commercial practice; the nature of the

corporation; the relationship between the parties; past practice; steps the claimant

could have taken to protect itself; representations and agreements; and the fair

resolution of conflicting interests between corporate stakeholders.

67. "Oppression" carries the sense of conduct that is coercive and abusive, and it

suggests bad faith. "Unfair prejudice" may admit of a less culpable state of mind, that

nevertheless has unfair consequences. Finally, "unfair disregard" of interests extends

the remedy to ignoring an interest as being of no importance, contrary to the

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stakeholders' reasonable expectations... the phrases describe, in adjectival terms, ways in

which corporate actors may fail to meet the reasonable expectations of stakeholders.

195. In the Demerara case itself:-

i. The result of the amalgamation was a tremendous benefit to one party, but was of

no benefit to the other party.

ii. The decision of the directors was made for the exclusive benefit of one party and

to the detriment of the financial worth of one of the merged companies and the

preference shareholders who had an interest in such worth.

196. This cannot be said to be the case here. In circumstances where Sandra has herself

admittedly received a distribution from the Estate out of the $4 million paid to it by the

Company, it is difficult to contend that the payment in relation to her has unfair

consequences.

i. The nature of the corporation, (American Stores) must be borne in mind - a family

owned company where the shareholders of the largest shareholder by far (Holdings) are

largely the same as the beneficiaries of the Estate.

ii. The relationship between the parties – they are all family members benefitting from

the Estate of the deceased founder, either through their shareholding in the Company,

Holdings, or as beneficiaries of the Estate, largely in the same proportions. (Vickram

Singh being the chief exception).

iii. past practice - it has not been disputed that a previous part payment of $1 million on

account of this debt had taken place, without apparent complaint .

iv. the allegation, unrebutted by Sandra, that she was a part of the decision making

process before her illness, to repay from the assets of the company, as its circumstances

permitted, alleged debts due to the Estate.

197. HCA Cv 427 of 2004 Bodhan Ramkissoon, Meena Ramkissoon, Deokie

Ramkissoon v Bridglal Ramkissoon, Alphan Mohammed and Supermix Feeds

Trinidad Limited (delivered on the 28th

February 2005) the Honourable Justice

Stollmeyer stated, (in the context of an action for relief from Oppression albeit obiter):-

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I accept that "… when dealing with a close corporation, [howsoever that may be

defined] the Court may consider the relationship between the shareholders and not

simply legal rights as such", as was done in Re: Ferguson and Imax Systems Corp. 43

O.R. (2d) 128. That, however, was a case which can easily be distinguished on the facts,

and in the present instance it must be recalled that the complaint is in relation to

Supermix, not Aripo.

The facts of that case are not material. The acceptance of that proposition is.

198. On that state of the evidence one cannot conclude that the elements of oppression

have been established as:-

a. the parties allegedly oppressed are largely the same parties who actually benefitted

from the receipt of that sum by the estate and payment to them, (which has not been

refuted).

b. the parties counterclaiming include Sandra and her representatives, when Sandra is in

fact alleged to have been a party who participated in the decision in pursuance of which

this payment, inter alia, was made.

c. The alleged detriment in relation to Vickram Singh in relation to his shareholding of 40

shares out of almost 4000 was not pleaded and is simply an afterthought. He is not even a

party, and any alleged injury to his interest as shareholder is speculative, and unsupported

by any evidence, far less evidence on his behalf.

d. the counterclaimants are on the current board, yet that board has made no claim for

repayment from the trustees of the estate.

e. the counterclaimants themselves accept that there are no governance issues outstanding

now that Nadia is no longer managing the company, and they have achieved a change in

the management, under Maybodi.

199. As far as credibility is concerned the evidence of the claimants is to be generally

preferred for the following reasons:-

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i. They were forthright in their testimony that that they were responsible for the

transfer of the sum of $4 million and made no attempt to evade responsibility for

this.

ii. Their evidence in relation to the matter of the rent is consistent with such

documentary evidence as exists.

iii. The transfer of the sum of $ 4 million did not become an issue until the claim was

filed. It did not figure in any minutes of directors meetings.

iv. Maybodi, who is now the managing director of the company, described the transfer

as from one pocket to the next, in explaining his lack of concern about it.

v. The defendants only disclosed under cross examination that Sandra had benefitted

from a distribution from the estate out of the sum of $ 4 million.

vi. The transfer took place in the midst of a struggle for control of the company with

the potential for a new Board being misled on the issue of outstanding rent

payments and alleged arrears. Robin and Nadia would have been concerned that

those demands might have been satisfied by a new Board which had not yet

oriented itself.

In fact that newly appointed Board was then bombarded by demands to not only

pay rent increased by over 400 %, but arrears for the service department of over

$800,000.00 without a shred of documentation. While this by itself does not excuse

the transfer, it is an important part of the context, and explains the preference of the

remnants of the old Board, Robin and Nadia, to settle debts owed to the Estate

rather than alleged debts to the defendants, based on demands and not much else.

As it turns out this court has found those demands to have been without foundation

or substance.

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vii. In its proper context, the actions of Nadia and Robin appear far less oppressive than

the action of the defendants , which had as their goal the shutting down of the

company’s operations at its nerve centre if their demands for,

(a) Excessively increased rent, (which the company could not afford), and

(b) Alleged arrears of rent for the service department, (which had never been

documented, claimed, agreed to, or made known to the company’s board, either old

or new, but allowed to allegedly accumulate over years to in excess of $800,000).

This is not credible.

It could even be argued that it was the actions of the defendants that were the most

oppressive actions that the Company was subjected to in this case.

viii. The absence of documentation for this transfer cannot be ignored. It is because of

that lack that the sum of $4 million needs to be returned to the company by the

Estate, for the current independent directors to consider afresh whether they are

satisfied that the alleged debt to the Estate exists, and if it does, how it should be

repaid.

200. While on the current state of the evidence it cannot be concluded that the

company was being, or is being managed in an oppressive manner, the evidence

surrounding that payment of 4 million dollars remains unsatisfactory. This is especially

so as it was admitted by Nadia that there were records of the estate, and of the company,

which would have corroborated that there was a debt owing to the estate, and that there

would be accounts showing to whom of the beneficiaries payments had been made.

201. Robin and Nadia in making that payment acted also as the trustees of the estate,

which was therefore represented in these proceedings in relation to that payment. It must

be accounted for, to the satisfaction of the current directors, and to the court.

Transfer of $4 million -Conclusion

202. Accordingly I find that the alleged basis for the transfer of four million dollars

($4,000,000), (the alleged debt to the Estate) from the accounts of American Stores by

Robin and Nadia, the trustees of the estate, has not been sufficiently substantiated.

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Accordingly the court cannot simply accept that there was a previous decision of the

board that sums, of which the sum of four million dollars ($4,000,000) was one

installment, were to be paid to the Estate in settlement of an alleged debt by the

Company.

203. The opportunity to satisfy the court by reference to documentation, either from

the accounts of the Estate, or the accounts of American stores itself was not utilised. That

sum of four million ($4,000,000) needs to be repaid to the company, and the current

directors need to be given an opportunity to decide afresh whether that sum is part of a

debt ,and whether it needs to be repaid to the Estate.

204. In addition, that sum needs to be traced and recovered. Accordingly, Nadia and

Robin as trustees of the Estate, and also as defendants in this action, are to provide a

schedule within seven (7) days setting out:-


($4,000,000) allegedly paid to and received by the Estate,

ii. the dates paid,



205. All persons who received a distribution from the Estate out of the sum of four

million ($4,000,000) allegedly paid to the Estate out of the company’s assets are to repay

the sums received. Those persons should be all recorded in the schedule as ordered

above.

206. All persons who are parties to this action will be ordered to repay to the company

within 7 days all sums received by them from the Estate out of the four million

($4,000,000) that the Estate allegedly received from the company funds.

207. If they have received the entirety of the four million ($4,000,000) and they all

return the sums received by them then the company would have received repayment of

the full amount.

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208. The current directors of the company should consider afresh whether they are

satisfied that the sum of four million ($4,000,000) constitutes part of a debt due and

owing by the company to the Estate and whether the company should pay it, and if so

how or when. The result should be recorded in the minutes of a meeting to be held by the

company.

209. If all of the four million ($4,000,000) received by the Estate was not distributed

then the difference must be paid by the Estate within 7 days. If it is not paid then Nadia

and Robin are to repay that undistributed difference personally within 7 days, subject to

their right to recover any such payment from the Estate.

210. If repayment is not made by beneficiaries who are not party to the instant action,

of the sums received by them out of the four million ($4,000,000) in company funds

distributed to them by the estate, the Estate is to repay their share, subject to the right of

the Estate to recover any such sums from those non party beneficiaries.

211. So, in the case of persons who are not parties to this action who fail to repay (the

sums received by them out of the four million ($4,000,000) in company funds distributed

to them by the estate), the trustees are at liberty to recover from them any such sums

which remain unpaid.

212. It is only if the estate does not pay the difference, between four million

($4,000,000) and the sums paid out to beneficiaries of the estate that the issue of

personal repayment by Nadia and Robin would therefore arise.

213. It is not intended that the amounts paid by the estate, (as a distribution out of the

four million ($4,000,000) paid to it from the company’s funds) to those persons who are

parties to this action, be repaid personally by Nadia or Robin. Robin and Nadia would

not be responsible for personal repayment of any amount that is not refunded to the

Company by persons who are parties to this action, (as on the schedule referred to

above).

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214. It is only if the estate does not make up any difference between four million

($4,000,000) and the sum paid to beneficiaries of the estate, (that is the amount of the

four million ($4,000,000) that remains undistributed if any) that the issue arises of

personal liability by Robin or Nadia for repayment of such undistributed sum.

ORDERS

Rent

215. It is ordered that:-

i. Nominal damages in the sum of $20,000.00 are awarded against the defendants to be

paid by the defendants to the claimants in respect of illegal, excessive and unlawful

distress.

ii. The defendants are to pay the costs of the counterclaim on the basis prescribed by the

civil proceedings rules for a claim in the amount of $ 1,968,000.00 ($2,056,000.00 minus

$88,000.00), the alleged arrears of rent claimed.

iii. The claimant is entitled to its costs of the application for the injunction to be assessed

by this court in default of agreement, and to be paid by the defendants to the claimants.

Oppression

216. a. Nadia and Robin as defendants in this action, and who are also trustees of the

estate of SS Hosein (the Estate), are to file a Schedule within 7 days setting out:-

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($4,000,000) allegedly paid to and received by the Estate,

ii. the dates paid,



b. All persons named on the Schedule who received any sums as a distribution from the

estate of SS Hosein, out of the four million ($4,000,000) in funds received by that estate

from the Company, are to repay those sums within 14 days hereof.

c. All such sums, received by persons named on the Schedule, who received any such

payments out of the four million ($4,000,000) distribution, are to be paid by certified

cheque made payable to the American Stores Limited deposited with the Registrar of the

Supreme Court.

d. Any difference between the total amount received by persons on that schedule and four

million ($4,000,000) (the undistributed amount), is to be repaid by the trustees of the

Estate, out of the assets of the Estate, to the company within 14 days hereof, by certified

cheque made payable to the American Stores Limited, deposited with the Registrar of the

Supreme Court.

e. In default of repayment of that undistributed sum within 14 days by the Estate, that

undistributed sum is to be repaid to the company personally by Robin and Nadia, by

certified cheque made payable to the American Stores Limited, deposited with the

Registrar of the Supreme Court, within 21 days hereof.

f. If repayment is not made by beneficiaries of the Estate named in the schedule, who are

not party to the instant action, (of the sums received by them out of the four million

($4,000,000) in company funds distributed to them by the estate), within 14 days hereof

it is ordered that that the Estate is to repay to the Company any sums that such persons

have received within 21 days, subject to the right of the trustees of the Estate to recover

from such beneficiary any such sum it has paid on their behalf .

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g. All sums representing repayment of any payment received out of the sum of $4

million, paid into court by certified cheque made payable to the American Stores

Limited, are to be paid out within 14 days after receipt to the Company, upon the

Company providing a receipt for such payment.

h. The issues of interest, if any, and costs of the counterclaim are reserved until the

Schedule has been filed, and there has been compliance with this order.

i. Liberty to apply

Dated this 12th day of December, 2013

…………………………………………

PETER A. RAJKUMAR

Judge

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The Court records its appreciation to counsel for all parties and their teams for their invaluable assistance

provided to the Court. The Court would also like to record its appreciation to Judicial Research Assistant

Ms. E. Ali for her contribution to this judgement.

THE REPUBLIC OF TRINIDAD AND TOBAGO IN THE HIGH COURT...

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