Azan, left, and Younis
Barbara Gayle, Staff Reporter
THE vibrant business activity in downtown Kingston which is due mainly to the "the influx of the Chinese", has contributed to the Court of Appeal ordering Kingston businessman Mark Azan to pay mesne profit of $2.1 million to Younis Investments Ltd. arising from a rent agreement in 1987.
Younis Investments Ltd. of which Sameer Younis is a director and majority shareholder, had rented premises 12 to 14 West Queen Street to Mark Azan. Azan's House of Fabric was located at the premises.
The agreement which was dated April 27, 1987 had stated that rent of $1,000 per month would commence on January 1, 1988 until September 1, 1991. Option to renew lease for four years at a negotiable rate with a minimum of $10,000 per month. Mr. Azan was to pay the land tax and all utilities and also had the first option to buy the entire complex if it were being sold.
In February 1992 Mr. Younis wrote to Mr. Azan making a proposal for him to pay $10,000 monthly until the end of March 1992. He could then vacate the store or pay a rental of $35,000 or $40,000 per month and remain in the store. It was further proposed that if he did not intend to vacate the premises, he should pay $40,000 per month starting September 1, 1991.
There was no settlement to the issue and Younis Investments took the matter to the Supreme Court. Justice Zaila McCalla heard the case and was asked to decide what was the reasonable rent for premises 12 to 14 West Queen Street, for the period September 1991 to January 1995. She was asked to determine the rate of interest that should be awarded as regards the mesne profits.
The judge, in making her award in the Supreme Court on November 27, 1997, awarded the company $10,000 per month from September 1991 to March 1992; $35,000 per month from April 1992 to September 1992; $40,000 per month from October 1992 to November 1993 and $80,000 per month from December 1993 to January 1995. The company was awarded damages for mesne profits in the sum of $1,960,000. Interest was awarded at 25 per cent per annum.
The company appealed and the Court of Appeal comprising Justice Henderson Downer, Justice Seymour Panton and Justice Howard Cooke (acting) heard the appeal in June 2000 and increased the award when it handed down its decision last week Monday. The award for mesne profits was increased to $2,170,000 and $360,000 which Mr. Azan had paid is to be deducted from that sum. The Court of Appeal in varying the Supreme Court award ordered that the rent to be paid for the period September 1991 to December 1991 was $20,000 per month with interest at 29 per cent per annum; January 1992 to November 1993, $30,000 per month with interest at 40 per cent per annum; and from December 1993 to December 1995 the rent was increased to $100,000 per month with interest at 46 per cent per annum. Interest will be 40 per cent per annum from February, 1995 to November 27, 1997 when the judgment was handed down in the Supreme Court.
Justice Cooke who wrote the judgment said the first question to be settled was whether or not it was a commercial case. "These premises are in the hub of the clothing and dry goods business section of downtown Kingston. It is a section of quite vibrant business activity. Hence, "the influx of the Chinese." The purpose for which Mark Azan occupied the premises was to conduct business. This would certainly point to this being a commercial case."
It was contended that the relationship between the parties was such that the transactions between them were not of a commercial nature. The view was based on the fact that as between their respective families there was a close bond of friendship. Mark Azan referred to Sameer Younis as "Uncle Sammy" and the court said it would appear that at the start of Mark Azan's business career "Uncle Sammy was quite helpful to him. Uncle Sammy provided him with a generous credit term from two of his companies, A. A. Younis Ltd. and Neva Garment Company Ltd." In Sameer Younis' opinion, Mark Azan, "performed well." It was argued that because of the family relationship and the fact that there had been some forbearance on the part of the company, the case was not a commercial one but the court ruled that it was a commercial case.
The company which was represented by attorneys Gordon Robinson and Winsome Marsh had led evidence at the trial to show the rate of interest on a monthly basis that the company would have to pay if it had borrowed the money which was being withheld by Mr. Azan. The court set aside the 25 per cent interest awarded by the Supreme Court and increased the interest rate.
The court also relied on a valuation report by C D Alexander Realty Company Ltd. that in December 1993 the "fair market" rent for the premises was $100,000. The premises was rented in March 1995 to Lui Guo Wei for $110,000 per month.
Dennis Morrison, Q.C., instructed by attorney Carl Dowding, represented Mr. Azan and had asked the Court of Appeal to uphold the Supreme Court award.
