News

$33-m suit filed in bitter Access battle

BY KARYL WALKER Editor - Crime/Court Desk walkerk@jamaicaobserver.com

Tuesday, August 05, 2014    

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ACCESS Financial Services Ltd has filed a $33-million lawsuit against its Chief Executive Officer Marcus James, his father Neville James, Renew Limited, and Nenan Limited.

The suit, filed on July 14, accuses Marcus James of breach of contract, alleges breach of fiduciary duty on the part of Renew Ltd, claims negligence on the part of Nenan Limited and accuses Neville James of conspiracy to injure.

The suit states that Marcus James had leased the two buildings at 41a and 41b Half-Way-Tree Road to Access from Renew and Nenan and caused the company to spend $17 million in expansion works to acquire additional office space and physically upgrade the existing office space in March 2013, knowing that the lease agreement would soon expire.

Access said it leased 41a and 41b Half-Way-Tree Road from Renew on August 9, 2009 and August 26, 2013 under the condition that repairs, maintenance and cleaning of the floors, walls, ceilings, interiors finishes, additions and improvements, fixtures and fittings, air conditioning units and generators would be undertaken by the tenant.

"If it becomes necessary to keep the windows, entrances and doors of the leased premises and the glass and glazed surfaces therein clean and in good condition and promptly replace all broken or cracked glass, and when it becomes necessary, to substitute fixtures of a similar description, quality and value to the satisfaction of the landlord and, in particular, at least once every week to clean the inside and outside of the window frames," the document stated.

The agreement also required the tenant to paint the building with a double coat every 27 months in its original colour.

The document said Marcus James made no mention that there was no obligation on Access' part to carry out such works, that the lease would soon expire, that the tenant had no right to renewal of the lease, that the landlord did not own the freehold to the premises and had no power to grant a renewal, and that Marcus James was the sole director and shareholder of the landlord and therefore was its alter ego.

"By doing so, inducing the board to undertake the works at the premises, the first defendant acted in breach of his fiduciary duty to the company," the document stated.

The company is claiming that Marcus James placed himself in a position of conflict of interest with those of Access Financial, and failed to disclose that position to the directors. And that he placed himself in a position to make a profit and failed to act in the best interest of the company.

Marcus James is the major shareholder in Access Financial Services, with 48 per cent shares, and the sole director of Renew Ltd, the document stated.

The suit also states that Marcus James' wife is the secretary of Renew Ltd.

Neville James and his wife Nancy have been named as the only shareholders and directors of Nenan Ltd.

In making the $33-million claim, the company said Renew and Nenan were:

"Unjustly enriched by the payments made by the claimant in respect of the work carried out on the premises and by the increase in value of the premises."

"... the claimant says that the second and third defendants (Renew and Nenan) are liable to compensate it to the extent that the second and third defendants benefited from the said unjust enrichment," the document also stated.

The company has also claimed for six per cent interest on the $33 million from the date of the works until the court case ends.

When contacted by the Jamaica Observer, Neville James dismissed the claims as frivolous and vexatious.

He pointed to a Supreme Court injunction which restored full powers to Marcus James as CEO of Access Financial.

The injunction also imposed a freeze on the board trading in the company's shares.

Marcus James had turned to the courts in April to stop the Access Financial board from ousting him as CEO.

Later, wrangling between the parties led, at one stage, to the board stripping James of his responsibilities as CEO, but not his title, and conferring those powers onto another board member.

"It's the action of desperate men clutching at straws," Neville James said.

He also shot down claims that Renew and Nenan had unjustly enriched themselves.

"That is foolishness, utter rubbish. We don't have to do that. We have the resources to allow us not to do that. It is foolishness," he said.

Marcus James could not be reached for comment because he is abroad.

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