Larry Singh loses bid for millions in rent from GRA over Camp St property

-judge says contract warrants criminal probe

The sub-lot B194 Camp Street property which was rented by Singh to the GRA.

Businessman Lawrence ‘Larry’ Singh on Wednesday lost his bid at recouping what he says are millions owed for rental of a Camp Street, Georgetown property, which he had sub-let to the Guyana Revenue Authority (GRA) in 2016 and a judge opined that the agreement’s evident breach of the procurement law warrants a criminal investigation.

It was Singh who had also rented the Sussex Street bond to the APNU+AFC government for the storage of pharmaceuticals in a controversial deal that was criticised as being a reward by virtue of him being a PNCR supporter.

On January 31st of last year, High Court Judge Diana Insanally dismissed an action Singh had brought against the GRA for rent, ruling that the agency had no authority to enter the contract of tenancy without permission from the National Procurement and Tender Administration Board (NPTAB) given the size of the contract.

Singh would later appeal this ruling to the Full Court, where it was heard by Justices Navindra Singh and Gino Persaud. Since both judges arrived at different findings, however, the initial ruling of Justice Insanally has to stand.

While Justice Singh agreed with Justice Insanally’s decision to dismiss the action, Justice Persaud did not.

To Singh’s February 2nd, 2017 challenge claiming monies owed on the tenancy agreement or for breach of contract in the alternative, the GRA, after already entering as a party to the agreement, sought to argue that the contract had been improperly entered as it was not approved by the NPTAB in accordance with the Procurement Act.

Refuting this argument, however, Singh (the applicant/appellant) contended that at the time the contract was entered into, it was signed by then acting Commissioner General Ingrid Griffith, whom he contended had “actual, implied or ostensible authority to enter into the tenancy agreement.”

Singh is of the view that he was entitled to act on Griffith’s ostensible authority, the exercise of which he argued would have been binding on the Revenue Authority.

The parties entered into the contract in May of 2016 for three years for rental of a sub-lot B 194 Camp Street, Georgetown property.

In its affidavit of defence, the GRA said it erroneously entered into the tenancy agreement and also erroneously paid rent for several months.

By letter, dated October 7th, 2016, the GRA served notice of termination of the agreement, contending that it had erroneously paid rent to the tune of $5,250,000.

GRA contended that Singh had no legal right to demand rent since he did not own the property. Singh, on the other hand, advanced that he had rented the property from owners—attorneys Manoj Narayan and Ganesh Hira—and in turn sub-let it to the GRA.

According to him, nothing prevented him from subletting.                                                                   

Agreeing with Justice Insanally’s position that the GRA needed permission from the NPTAB before the contract could be considered valid, Justice Singh noted that by Section 17 (1) of the Procurement Act, it is the National Tender Board which is given jurisdiction over procurements, (including leases (Section 2)) over a regulated amount.

The purported tenancy agreement, the judge noted, was for a fixed term of three years at a cost of US$5,000 per month and the value of the entire contract had been pegged at US$180,000 for the fixed 36-month period.

“The value of this contract requires it to be approved by the National Board for it to be a legal contract,” Justice Singh said in his ruling.

Disagreeing with both Justices Insanally and Singh, however, Justice Persaud is of the view that since the Revenue Authority “voluntarily and lawfully” entered into the tenancy agreement, it is estopped from denying the landlord’s title.

Justice Persaud believes that Singh’s appeal ought to have been allowed and judgment entered for him for the rent claimed.

According to Justice Persaud, Justice Insanally erred in making the finding that Singh was not entitled to the rent claimed because he was not the “legal owner” of the property, misrepresented his position to the GRA, and that the tenancy agreement had been erroneously entered into in the absence of approval form the NPTAB.

Justice Persaud asserted that having voluntarily and lawfully entering a tenancy agreement, “a tenant cannot deny the title of his landlord to grant a lease.”

This rule lasts for the duration of the leases, the judge said, while adding that even after it expires, the tenant cannot set up a “want of title,” in his landlord as a defence to an action for damages.

According to Justice Persaud, a tenant may know his landlord’s title is defective, but says that by accepting the tenancy, he adopts an assumption which precludes him from relying on the defect.

The judge said he found that GRA’s affidavit of defence disclosed no lawful defence to the claim for rent, nor did it disclose a triable issue.

He said that Justice Insanally erred by making findings of fact on the affidavits in a summary proceeding, without a trial. “She made findings of fact that Singh misrepresented the true state of affairs, which resulted in GRA entering into the tenancy agreement,” the judge said.

“She (Justice Insanally) could not make such a finding on the affidavits without a trial,” Justice Persaud asserted.

According to Justice Persaud, finding that Singh was not entitled to claim rent as he was not the legal owner of the property and that the tenancy agreement had been erroneously entered into without approval from the NPTAB, in the absence of evidence being led to so substantiate, were also errors in law made by Justice Insanally.

“There was no trial. This was a finding on the affidavits only,” said Justice Persaud. 

‘Unsavoury state of affairs’

Justice Singh, in handing down his ruling, maintained that the contract, “which was interestingly” not exhibited by the appellant in the proceedings before Justice Insanally nor the appeal before the Full Court, in no way reflected its approval by the Tender Board, which was in the first place essential to making the agreement a valid one.

He pointed out that in fact, the GRA, through its Commissioner-General Godfrey Statia, averred in its affidavit of defence that indeed no approval had ever been given by NPTAB for the contract.

This judge said that the appellant’s contention that acting Commissioner-General Griffith, having “actual, implied or ostensible authority to enter into the tenancy agreement is not supported by any evidence, nor did he attempt to highlight or point the court to the existence of such evidence.

Justice Singh said that the mere existence of the Procurement Act precludes the acting Commissioner-General from possessing any authority to enter into the contract.

The judge said it appears that the appellant, in his use of the phrase “ostensible authority,” may have been suggesting that he was not aware of the law governing contracts.

Justice Singh, however, cautioned that it is trite law that ignorance of the law does not excuse breaches of the law and added that certainly one cannot breach the law and then approach the court for redress. “I am of the view that this breach should have been investigated criminally,” the judge added.

Further, Justice Singh said he observed a number of deficiencies contained in the  purported contract, which was made part of the appellate record by the GRA in that it was undated.

Another deficiency, he said, was the fact that  that the commencement of the tenancy was listed as being from June 1st, 2016, with vacant possession to be given on the exact date, which the judge pointed out was contrary to the pleadings and affidavit verifying the claim sworn to by the appellant on February 2nd, 2017.

Justice Singh noted, too, that the contract never stated the name of the person signing the contract. He said that assuming, however, that the contract was signed by acting Commissioner-General Griffith, as stated by the appellant, nowhere in the contract was it stated under what authority, or in what capacity she signed.

The judge said that in his opinion, the contract, with all of its shortcomings, was “highly questionable,” while adding, “It is this very unsavoury state of affairs that the National Board was created to prevent.”

Justice Singh said that the National Tender Board was put in place to protect the taxpayers, who in the end foot the costs of such contracts.

Finding that the GRA never entered into a contract with the appellant, Justice Singh said that the appellant, therefore, had no cause of action against the GRA.

In the circumstances, he ruled to dismiss the appeal and award court costs to the Revenue Authority in the sum of $250,000.

In accordance with Sections 75 (2) of the High Court Act, where the two Full Court judges are unable to arrive at an agreement, the ruling of the first instance judge has to be reverted to.

The section states, “provided that when the Full Court is composed of two judges and they differ as to the judgment that should be given on an appeal from a single judge, the judgment of the single judge shall stand except as to any matters in which the Full Court agrees that it shall be reversed, and on an appeal from a decision of a Magistrate’s Court, the appeal shall be reheard as soon as conveniently may be by a Full Court of three judges.

Singh was represented by attorney Murseline Bacchus, while the GRA was represented by attorney Fiona Hamilton.

In 2016, it was revealed by probing in the National Assembly that the rental of a storage bond on Sussex Street, at a cost of $12.5 million per month, was sole sourced to Singh. Singh had never before run a bond storage operation and critics had said the deal appeared to be a sweetheart arrangement to give business to a PNCR supporter.

 

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