Chin to pay $3m as MovieTowne, landlord reach temporary agreement

A temporary agreement has been arrived at between the owners of the MovieTowne multiplex, entertainment and commercial centre at Invaders Bay, Port of Spain, and the Port Authority of TT’s real estate manager, the Port of Spain Infrastructure Development Company (POSINCO).

At a virtual hearing on August 26, before Justice Eleanor Donaldson-Honeywell, attorneys for Trinbago Commercial Development Co Ltd (TCDC) and POSINCO trashed out an agreement which will stay in place until the High Court determines the rent dispute between them.

MovieTowne multiplex, entertainment and commercial centre at Invaders Bay, Port of Spain, sits on land leased to TCDC by POSINCO. TCDC is a wholly-owned subsidiary of MovieTowne Holdings, the owner of facility.

Derek Chin is the chairman of the board of MovieTowne Holdings.

On August 24, Donaldson-Honeywell issued a late-evening injunction which prevented POSINCO from communicating with MovieTowne’s tenants.

According to her varied order on August 26, TCDC agreed to pay into the court $3 million on or before August 28.

The PATT/POSINCO has also agreed not to disturb the occupation of MovieTowne’s sub-tenants at the Invaders Bay premises. The judge also ordered that PATT/POSINCO is not to disturb or interfere with the operations of TCDC or its tenants until the matter is resolved.

She also deemed the matter urgent. Both sides were given deadlines to file their evidence and for TCDC to file its statement of case by September 12. The matter has now been assigned to Justice Nadia Kangaloo who will fix a date for the next hearing of the matter.

Tenants will also have to decide who they choose to pay their rent to in the interim after they get legal advice. They can pay to TCDC, the PATT/POSINCO or into court.

Donaldson-Honeywell said she was not prepared to make an order on rent without full evidence.

At the hearing, attorneys for POSINCO sought an order for TCDC to pay $3 million into court in the event it was unsuccessful in its claim.

Senior Counsel Justin Phelps, who leads a team of attorneys for the PATT/POSINCO, said his client was prepared not to disrupt MovieTowne but wanted to be able to communicate with them.

However, TCDC’s lead attorney Deborah Peake, SC, complained that security guards were blocking her client’s staff from accessing the office and banquet centre which POSINCO allegedly levied on August 23 for payment of outstanding rent. She said she was disappointed by the PATT/POSINCO’s position. She said the status quo should be preserved and tenants should be allowed to continue paying their rent to the landlord (TCDC) otherwise they would be unable to pay expenses, including utilities, security and maintenance fees. She also said the TCDC had to protect its tenants' interests to which the judge reminded that she was not making an order preventing Peake’s client from collecting rent.

Attorney Christlyn Moore, who represents one of MovieTowne’s tenants, also expressed concern about her client’s position at the end of the month when rent was due. She said her client would have no difficulty paying rent into court since it did not want a scenario where it is paid to one party and the other party pursues it later.

Attorneys for the TCDC approached the court for injunctive relief after the POSINCO took control of MovieTowne’s office and the banquet hall on August 23.

The TCDC’s claim contends $5.3 million was unlawfully/mistakenly paid under duress/threats/compulsion and is asking the court to declare this as well as order POSINCO to repay the sum as restitution.

There are several other declarations being sought related to its lease at Invaders Bay. The TCDC is also represented by Ravi Heffes-Doon and Andre Rudder. The company is also seeking another injunction to prevent the POSINCO from taking possession of the 9.94 acres of land it occupies at Invaders Bay.

In support of the application – which was heard without a hearing from POSINCO – TCDC’s director Hayden John Gadsby said the $10,904,121.23 quoted by POSINCO as rent owed was invalid and is much less than the PATT contends. He said on August 22, the PATT’s attorneys agreed to determine the rent issue in court and not arbitration as provided for in the lease. He said there was an acknowledgement of a dispute on the rent owed yet on August 23, took possession of part of the premises. He also said POSINCO rejected a cheque for $1,083,133.26 which, it said, was the only sum payable to the PATT up to July 2024.

Gadsby said the PATT wrote to TCDC’s tenants, asking them to sign an agreement, creating a sub-tenancy arrangement. He quoted the contents of a report on the rental amount but said it was "irrationally high."

Attached to his affidavit are a series of letters between the two parties and valuation reports as well as valuations for already-developed comparable properties.

He said a proper review should be done but acknowledged TCDC was bound to the agreed rent of $4.80 per square foot, a sum agreed to in 2013. He also said when the land was first leased, it was covered in bush and subject to water retention as it was mangrove land. He said the disputed report valued the parcels of land as already fully developed.

“The rental sums of $7.85 per square foot… for submerged mangrove lands is irrational and one that no reasonable valuator could possibly have arrived at,” he said, adding that it was substantially higher than the other comparable properties which were “not mangrove/wetlands” that required infilling earthworks to make it fit for the construction of commercial buildings.

The cineplex’s owners entered into a lease agreement with the PATT in May 2001. There was an alleged attempt to take possession of the premises in August 2020, during the covid19 pandemic which disrupted its operations because of government-imposed restrictions.

"Due to the threatening and domineering posture of the Port and in the circumstances of the pandemic, the claimant greatly feared that the existence of its business, in which it had invested millions of dollars, was in great peril."

Gadsby said it was for this reason, TCDC felt compelled to pay the sums demanded by the PATT/POSINCO based on the disputed valuation report.

Gadsby said on August 2, the PATT again threatened to take possession of the premises based on the figures provided in the report at $7.85 per square foot or $3.4 million a year. He also said "spurred on by demands and threats" and under the mistaken assumption the rent report was binding, TCDC made three payments of $2.3 million and $2.8 million in 2020 and $123,906 in 2021. He gave a history of the discussions with POSINCO, which also included securing a retired Appeal Court judge to arbitrate on the rent dispute. He also gave an account of Friday’s “takeover.”

“In the present economic climate, there is reduced consumer spending. The commercial challenges of running a business have increased due to the decline of energy income because of the decrease in gas supplies and gas pricing.

"This has had a knock-on impact on the economy. The high-handed and bullying conduct of the Port has created considerable uncertainty around the facility which is likely to cause many to review whether they wish to continue as tenants…"

He also described it as "high-handed and in bad faith" and an attempt to intimidate and embarrass the TCDC.

The TCDC’s claim said from May 2001 to August 2003, the lease stated it would pay an annual rent of $0.18 per square foot and $2 per square foot from August 2003 to August 2006. The lease provided that from 2006, the annual rent would be based on the market rate and subject to review every five years. The last period for review is from August 2021 to August 2026. Gadsby said there has been no valuation for that period (2021-2026) but there was an agreement for the fixed sum of $4.80.

In a release on August 23, the TCDC said it had offered to “settle all outstanding rental sums which are not in dispute and attempted to pay such sums by cheque. The cheque was returned notwithstanding current discussions to settle all matters including disputed amounts.

"PATT and POSINCO thereafter attempted illegal and unlawful entry via its private agents. The actions of POSINCO and PATT have been described as unjustified and illegal acts by experienced external legal counsel, who shall shortly commence legal proceedings against PATT and POSINCO inclusive of injunctive relief to ensure redress to TCDC and the protection of its tenants and employees."

TCDC reassured its patrons that the MovieTowne complex would continue to be open and its team would spare no effort to ensure their safety and maintain and enhance the premium service levels that families and clients have come to expect and deserve.

POSINCO said it had exercised its right of re-entry and had taken possession of the premises leased to TCDC, also known as MovieTowne.

"This re-entry exercise was undertaken because of breaches of the terms and conditions of the existing deed of lease between POSINCO and TCDC."