Delta Petroleum (Nevis) Ltd Claimant v [1] Oojj's Ltd (Doing Business as Oojj's Service Station) [2] Othneil Hyliger Defendants [ECSC]
| Jurisdiction | Saint Kitts and Nevis |
| Judge | Thomas J (AG) |
| Judgment Date | 23 May 2013 |
| Judgment citation (vLex) | [2013] ECSC J0523-2 |
| Court | High Court (Saint Kitts and Nevis) |
| Docket Number | CLAIM NO. SKBHCV2011/0242 |
| Date | 23 May 2013 |
EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE
CLAIM NO. SKBHCV2011/0242
Thomas J (AG) On 21st August 2011 the claimant, Delta Petroleum (Nevis) Limited filed a Claim Form in which OOJJ's Ltd and Othneil Hyliger were named as defendants.
The claimant claims the sum of $241,932.89 as being the outstanding amount due from the defendants to the claimant, which the first defendant in breach of its agreement which the claimant made on or about 30th May 2008 and the second defendant in breach of his Promissory Note issued to the claimant on 6th June 2008, have failed and/or refused to pay the said sum together with interest compounded at the rate of 5% per annum from January 2011, the most recent payment.
In its Statement of Claim the claimant pleads the agreement entered into with the first defendant on or about 1st August 2002 under which the defendant, as dealer, agreed to purchase from the claimant petroleum products for resale at its service station. The claimant agreed to supply such products.
The claimant pleads a material term of the agreement (being clause 7) whereby the claimant would allow a credit limit of $200,000.00 with respect to the payments due to the claimant for the supply of petroleum products which the dealer was to pay off at the end of each month or when the authorized credit limit was reached.
It is pleaded by the claimant that during the course of the agreement the claimant provided credit to the limit and that after the expiration the first defendant acknowledgment in writing on 30th May 2008 its indebtedness to the claimant in the amount of $486,833.84.
It is further pleaded by the claimant that on or about 30th May 2008 the claimant and the defendant agreed that the first defendant's debt would be treated as an advance payment of the rent due from the claimant to the second defendant under the claimant's tenancy agreement of the second defendant's premises at Basseterre. This tenancy was to commence in June 2008 pending full payment of the sum due from the first defendant to the claimant.
At paragraph 9 of the statement of claim this following is pleaded:-
"9. Further on in the alternative, the second defendant in consideration of the forbearance of the claimant from collecting the debt due from the first defendant and the claimant agreed to treat the sum due from the first defendant as an advance payment of rent issued a promissory note in favour of the claimant on or about 6th June 2008 under which the second defendant agreed to pay the sum of $486,833.84 together with the compound interest calculated at the rate of 5% per annum in instalments of $12,000.00 per month commencing on 6th June 2008".
The claimant avers that it entered upon the premises of the second defendant in or about the beginning of July 2008 and terminated the tenancy and quit the premises on or about 30th September 2008 on the ground that it was unable to conduct its operations on the premises due to the first defendant's failure, in breach of the terms of the lease, to ensure an adequate supply of electricity to the premises occupied by the claimant.
The claimant avers that as a consequence of the foregoing only the sum of $36,000.00 was applied towards the first defendant's debt to the claimant. And further that the second defendant made a lump sum payment in or about the month of January 2011 in the amount of $278,433.84 towards the debt.
It is the contention of the claimant that second defendant in breach of the terms of the Promissory Note did not make the payments of the monthly instalments towards the debt after August 2008 as promised or at all.
At paragraphs 15 and 16 of the said statement of claim the pleadings are in these terms:
"15. The claimant in its letter of 5th January 2011 demanded payment of the balance of the debt from the second defendant and by its further letter of 22nd June 2011 demanded payment of both defendants of both defendants of the outstanding sum.
16. Notwithstanding such demand and a breach of the agreement between the claimant and the first defendant and/or the promissory note made by the second defendant, the defendant has failed or refused to pay the balance of the debt to the claimant whereby the claimant has suffered loss and damage of the principal sum of $235,166.43 and interest accruing thereon".
In his defence the second defendant makes a number of admissions as his to occupation, his relationship with the first defendant, the agreement between the claimant and the first defendant for the sale and purchase of products, and the first defendant's indebtedness to the claimant in the sum of $486,833.84 at the expiration of the said agreement.
In further admissions in relation to clause 7 of the claimant's Statement of Claim the second defendant contends that: pursuant to the agreement of 30th May 2008 the claimant entered into a five year fixed tenancy agreement with respect to premises known as OOJJ's Commercial Complex situate in Basseterre; it was agreed between the claimant and the second defendant that the debt owed to the claimant as of June 2008 was $486,833.84 which would be used as advance payment by the tenant for rent of the demised premises pending full payment of the said sum of $486,833.84. It was further agreed that the sum of $12,000.00 (monthly payment) shall be allocated on the 10th day of each month for the amount due to the claimant until the debt is satisfied; the lease agreement was signed by the second defendant in June 2008 and sent to the claimant for execution but without the knowledge or approval of the second defendant the date of the lease was altered.
At paragraph 8 of his defence the second defendant denies that a term must be implied into the lease agreement in order to give it business efficacy as pleaded by the claimant.
With respect to paragraph 9 of the Statement of Claim the second defendant admits that he signed the Promissory Note on 6th June 2008; but denies that the said Promissory Note was signed in consideration of the forbearance of the claimant collecting the debt as alleged.
With respect to paragraph 10 of the Statement of Claim the second defendant makes certain denials regarding the termination of the tenancy and the sequel to the termination by the claimant; possession of the demised premises during the period in dispute. Issues regarding the adequacy of the electricity supplied to the demised premises are also pleaded and the termination of the tenancy by the second defendant by letter dated 8th December 2009.
Regarding paragraph 12 of the Statement of Claim, the second defendant contends that with the lump sum payment of January 2011, the first defendant wasno longer indebted to the claimant and that its principal account balance with the claimant should have a zero balance.
With respect to paragraph 14 of the Statement of Claim the second defendant contends that he was not in breach of the Promissory Note as alleged and denies that he did not pay any monthly instalments towards the debt after August 2008. It is further contended by the second defendant that he was always willing and able to perform his part under the Lease Agreement and consequently willing to settle the debt owed by the first defendant in the manner agreed to in the lease and under the terms of the Promissory Note.
The second defendant's counterclaim is based essentially on the Lease Agreement and its terms. Accordingly the claim is as follows:
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"1. A declaration that the Claimant is indebted to the second defendant in the sum of EC$208,400.00 representing rental income due and owing to the second defendant by virtue of a five (5) year fixed term lease agreement for the period June 2008 to May 2013 entered into between the parties in relation to the premises belonging to the second defendant known as OOJJ's Commercial Complex situate at Camps, Island Main Road, Basseterre, St. Kitts containing by admeasurements 1640 square feet, said lease agreement was breached by the Claimant's failure to allocate the monthly rental towards the satisfaction of the debt that was agreed to be due and owing to the claimant by the first defendant in June 2008 in the sum of EC$486,833.84.
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2. The sum of EC$208,400.00 be set off from the principal debt in the sum of EC$486,833.84 that was owed to the claimant by the first defendant in of around June 2008.
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3. Such further and other relief as this Honourable Court thinks just.
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4. Costs".
A number of grounds are pleaded upon which the counterclaim rests, including the following:
"12. Further, although the claimant principal to terminate the Lease Agreement in or around 30th September 2008. The claimant remained in possession of the premises. In January and February 2009. The claimant exercised its privileges on the demised premises as tenant. In or around February 2009, Agents of the claimant placed fuel in underground tanks located at the demised premises. Employees of the claimant as well as certain management officials of the claimant were also observed on the demised premises in February 2009.
13. In breach of the said Lease Agreement, this Defendant failed to credit the second Defendant's account on a monthly basis with EC$12,000.00 rent as agreed to reduce the debt of the first defendant.
At paragraph 1 of the reply the claimant joins issue with this averments set out in the defence.
At paragraph 4 of its reply the claimant avers that the repayment of the debt was to be made by a combination of set off from rentals due under the Lease Agreement and direct payments by the second defendant. And as to paragraph 9(a) the claimant denies the...
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