The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former tenant at The Pointe should be permitted to “reinvigorate” its business, a Supreme Court justice has ruled, after it was barred by the landlord from accessing vital equipment for almost four years.

Justice Neil Brathwaite, in somewhat ambiguous language in his September 14 ruling, appeared to vary or set aside the December 3, 2020, order by former justice, Ruth Bowe-Darville, that “prohibited” Jetline Simulation Bahamas from removing the Boeing fixed-base trainer and flight simulator kit that the company had used to entertain both locals and tourists alike.

His finding that Jetline should be able to restart “at a different location” should it choose to do so ends an almost four-year shut down of its business after its former landlord, Neworld One Bay Street, an affiliate of The Pointe’s developer, China Construction America (CCA), locked it out of the premises on November 6, 2019, amid a rent dispute.

Jetline had agreed a three-year lease for Shop 115D, comprising 1,000 square feet, on June 1, 2017, with Neworld. Besides a two-year option to renew, the lease terms required Jetline to pay rent equivalent to $38 per square foot or $38,000 ($3,166.67) for the first year; $45 per square foot or $45,000 ($3,750 per month) for the second year; and $50 per square foot or $50,000 ($4,166.67 per month) in the third year.

The company occupied the space in July 2017, several months ahead of when the lease took effect on October 1 that year, so that it could set up its flight simulation business. Both the Boeing fixed-based trainer and flight simulator kit were, according to Justice Brathwaite’s ruling, subject to a deed of debenture, which indicates they were acting as security for a loan.

“The plaintiff alleges that during the months of March, April, May, June, July and August 2018, electrical power was not provided to shop 115D due to the inadequacy of infrastructure as other units were being constructed,” Justice Brathwaite wrote of Jetline’s claim, “this resulting in the plaintiff losing revenue.

“The plaintiff approached Engel and Walker, the agent of the defendant [Neworld/CCA] to pay rent minus any legal or equitable set-off. However, the agent did not accept the rent from the plaintiff. Meetings were held between the plaintiff and the defendant’s agent to discuss the various set-offs which the plaintiff claimed due to the interruption of electrical supply to Shop 115D. Attempts to resolve the dispute over the amount owed were not successful.

“The plaintiff eventually advised Morley Realty, the defendant’s agent at that time, that it was affected by Hurricane Dorian and thus wanted to discuss a reduction in the rental payment. On November 6, 2019, at approximately 8pm, the defendant repossessed and locked the plaintiff out of Shop 115D,” the judgment continued.

“The plaintiff has not been permitted to remove any of its ‘goods, chattels, trade, personal items of its employees or perishable goods and other fixtures’.” This sparked Jetline into initiating legal action on September 11, 2020, “seeking damages for loss of revenue, excessive, illegal and wrongful distress, and exemplary damages for harsh behaviour”.

However, CCA’s Neworld affiliate hit back with a November 1, 2020, defence and counterclaim seeking damages for rental arrears owed from October 31 to the date of judgment, plus payments for electricity, interest and costs. Former justice Bowe-Darville’s late 2020 order prevented Jetline from removing the Boeing fixed-base trainer from the premises and awarded costs to the landlord.

Evidence provided by Jetline valued the Boeing fixed-base trainer at $135,696, and the flight simulator at $27,025, for a collective $162,721. Neworld, meanwhile, is claiming $111,368 in special damages, plus general damages, interest and costs.

Subsequently, Justice Brathwaite was asked to determine three summonses filed by each of the parties. In one, Jetline asserted that part of Neworld’s counterclaim should be struck out on the grounds that it was “scandalous, frivolous, vexatious and an abuse of process” because it sought compensation/damages for loss of future rental earnings even though it had repossessed the property on November 6, 2019.

“The plaintiff therefore argues that the defendant is not allowed to sue for future rent, as locking out the tenant on November 6, 2019, resulted in the lease being effectively terminated,” the judge noted. Jetline also argued that, having “relied on the remedy of distress”, Neworld had no right to keep its tenant or trade fixtures, namely the Boeing fixed-based trainer and flight simulator kit, and that it should be given a “reasonable opportunity” to remove items “privileged from distress”.

Neworld, though, opposed both the bid to strike out part of its counterclaim and Jetline’s submission that the issues raised to tried as “preliminary” matters before going to a full trial. The landlord also suggested that it “should be relieved of the undertaking not to interfere with the equipment, as the matter is not proceeding in a timely fashion and they are continuing to suffer loss as a result of not being permitted to lease the space to another tenant”.

Justice Brathwaite, echoing a UK law lord’s “treacherous shortcut” description, declined Jetline’s request for a “preliminary” determination as there were serious issues in dispute between the two parties that needed to be decided via a full trial. However, his verdict on the other issues was more favourable for the former tenant.

Finding that the November 2019 repossession and lock-out by Neworld brought Jetline’s tenancy at the downtown Nassau development, adjacent to the British Colonial, to an end, Justice Brathwaite said “there can be no claim for rent” after this and agreed that the offending parts of the landlord’s counter-claim be struck out.

Meanwhile, Daniel Liu, a Bahamas-based senior CCA executive, proposed in a January 22, 2021, affidavit that the flight simulation equipment be moved “to independent storage facilities” - all at Jetline’s expense - where they were to remain until the trial was over. Jetline, he suggested, should pay for all transportation and removal costs, while also insuring the equipment for Neworld’s benefit.

Justice Brathwaite, while acknowledging Neworld’s desire to “mitigate losses”, added: “I cannot accept that the plaintiff should be required to pay for the removal and storage of the items merely to keep them available to satisfy any debts found to be owing to the defendant at the conclusion of these proceedings.

“It would seem that the defendant wishes to preserve the ability to distrain, at the plaintiff’s expense, but without the plaintiff being able to also mitigate losses by reinvigorating the business if possible. In my view, the preferable course of action is that the items be removed at the expense of the plaintiff, who would be permitted to establish the business at a different location should they choose to do so, and with the express direction that the plaintiff will take no actions to dispose of the items or to diminish the value of the equipment prior to the conclusion of this matter.”

Thus the way appears to have been paved for Jetline to recover its equipment and restart the business.