By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A $94,000 damages award against the Bahamas Agricultural and Industrial Corporation (BAIC) has been upheld after its neglect resulted in the violation of a tenant's lease agreement.

The Court of Appeal, in a unanimous verdict, threw out the Government agency's bid to overturn a verdict in favour of Good Earth Nursery over its claim that BAIC failed to protect its business from the activities of a neighbouring business tenant.

BAIC's defence, that it had no liability because the actions of the other tenant were "unauthorised", were swiftly dismissed by both the Supreme Court and Court of Appeal, which found the agency in breach of a lease that allowed Good Earth Nursery to "peaceably hold and enjoy" its property.

Acting appeal justice Milton Evans, detailing the events that resulted in the dispute, said Good Earth Nursery leased land at BAIC's 100-acre Agro-Industrial Park on Fire Trail Road on December 1, 1998.

The company, headed by William Albury, operated a plant nursery growing crotons, citrus plants and bougainvillea "as his sole means of employment and livelihood" for almost eight years without any problems.

Good Earth Nursery's "statement of claim", though, alleged that its problems began in June 2006 when a neighbouring tenant, Geneva Albury-Bowe and her company, Tradewinds Enterprises, allowed Tony Miller and T&M Trucking to start operating a rock crushing and soil separation business from her property.

The dust created by this operation blew on to Good Earth Nursery's land, and caused "severe damage and loss" of its crops, with the associated noise from the rock crushing machine causing "substantial interference" with its "use and enjoyment" of the property.

Despite repeated requests, Good Earth Nursery alleged that neither Mr Miller nor Ms Albury-Bowe discontinued or sought to mitigate any impact from the rock-crushing operation on its property. And BAIC took "no satisfactory action" following the company's complaint, leading to the claim being filed against it.

"The essence of Good Earth's case in the Supreme Court was that the covenant stated in the said lease agreement to 'peaceably hold and enjoy the demised premises' is a covenant for quiet enjoyment," the Court of Appeal said.

"Further, that the appellant [BAIC], having leased its premises to be used for horticultural purposes, could not permit another lessor to use an adjoining leased property in a manner which substantially interfered with Good Earth's ability to use its property in the manner which the appellant had agreed and required that the property should be used.

"Finally, that the appellant under its lease with Albury-Bowe had the ability to cause the rock-crushing operations being carried out on its property to stop, and its failure to do so was a breach of its quiet enjoyment covenant with the respondent [Good Earth Nursery]."

BAIC, though, argued that "it could not be held liable for the acts complained of due to the fact that the acts, which gave rise to the above mentioned nuisance, were unauthorised by BAIC". It also alleged that it had "made all reasonable efforts" to resolve Good Earth Nursery's complaints with Ms Albury-Bowe.

Then-chief justice, Sir Michael Barnett, held that BAIC was liable because it was "capable" of preventing the problems caused by the rock-crushing operation but had failed to do so - even though Ms Albury-Bowe was in breach of her lease.

BAIC challenged Sir Michael's decision to proceed to trial without an attorney representing it, but this cut little ice with the Court of Appeal, which branded its non-appearance as "inexcusable". It also hit out at the "unfortunate unsubstantiated allegations" made to it by the agency's new attorney, Kenria Smith.

As for the other element of BAIC's appeal, the Court of Appeal noted: "Mrs Smith submitted that the evidence does not show that the acts complained of were authorised by the appellant [BAIC]... She contends that based on the authorities the landlord is only liable for a breach of the lease for that which he authorises.

"In our view, the learned Chief Justice was correct in his findings. As he rightly noted, the respondent's [Good Earth Nursery] claim against the appellant [BAIC] in the court below was a claim in contract based on the assertion that the appellant was in breach of its covenant for quiet enjoyment contained in its written lease with Good Earth.

"It was clear on the evidence that Albury-Bowe was allowing activities on her premises which were creating a severe nuisance for the respondent, and causing damages to its business. It is also clear that the appellant, as landlord, had the ability and the duty under the contract to cause those offending activities to cease.

"It is of significance that the rock-crushing business was not the purpose for which the appellant [BAIC] leased the premises to Albury-Bowe. It was an activity which commenced after the respondent [Good Earth] had been granted its lease for its property to carry-out its business, the nature of which was known to the appellants."