Civil Appeal No. 17 of 2000
2001 March 6 and June 21.
Rowe, J.
Mottley, J.
Carey, J.

Mr. Fred Lumor for the appellant
Mr. Dean Barrow, S.C. for the respondent

Contract - Breach of contract for the lease of property - Whether the absence of minutes of the Board nullify the authority of the Chairman and Secretary of the Board to act - Assessment of damages for breach of contract - Factors to be considered in assessing damages - Application of the Exchange Control Act, Cap. 43 and Regulation made thereunder on the incorporation of a company - Power of the Minister to waive the provision of the Act and the Regulations - Pleading - Allegations of fraud and justification should not be pleaded unless there is clear and sufficient evidence to support it.

JUDGMENT

ROWE, P.

1. This is an appeal by Belize Airports Authority (appellant) from the decision of Shanks, J. that was entered on April 17, 2000 awarding to Ueta of Belize Limited (respondent) damages in the sum of $971,397.00 with costs to be agreed or taxed.

2. Two leases both dated August 18, 1998 were made "BETWEEN BELIZE AIRPORTS AUTHORITY, a body corporate established by the Belize Airport Authority Act 1988 (Act No.97 of 1988) of the one part and UETA OF BELIZE LIMITED, of the other part", were duly registered on August 26, 1998. The Leases were signed by Michael Godoy as Chairman of the appellant board of directors and by Geraldine Tillett, a member of the board. The seal of the appellant was affixed to the leases and it was recited in the attestation clause of each lease that:

"THE COMMON SEAL of the above-named BELIZE AIRPORTS AUTHORITY was pursuant to a resolution of the Board of Directors was (sic) duly affixed hereto by the Chairman and same was delivered in the presence of-"

Then follow two signatures. One lease granted to the respondent the right to occupy Duty Free Shop #1 consisting of 2,189 square feet and located on the lower fiat of the Philip S. W. Goldson International Airport in Belize City and the second lease was for an area of 645 square feet located on the lower fiat of the said airport described as the Departure Duty Free area. Each lease was for a period of five (5) years, that is to say, from August 13, 1998 to August 12, 2003, in the first instance with an option to renew for a period of 10 years.

3. The respondent entered into occupation of the demised premises, expended money in expansion, improvements and renovations and commenced payment of the rents reserved in the leases in a timely manner.

4. There was a General Election in Belize in September 1998. The members of the Airports Authority were changed. The new Board repudiated the Leases granted to the respondent. On April 30, 1999, the appellant entered the Duty Free Shop #1, took possession thereof, evicted the respondent, dismantled the premises and did severe damage to the respondent's goods.

5. In pleading its defence to the respondent's claim for damages, the appellant alleged that the respondent fraudulently prepared the lease, that the respondent knew that the attestation clauses in the leases were false and untrue and implied that the respondent knew that the board of directors of the appellant had not passed any resolution granting the leases to the respondent or authorizing the Chairman and Secretary to sign on behalf of the board. Shanks, J. commented that there was not a tittle of evidence to support the allegations of fraud and that at the hearing before him the appellant did not pursue these allegations. It is the duty of counsel not to enter a plea of fraud on the record unless he has clear and sufficient evidence to support it. In Associated Leisure Ltd. and others v Associated Newspapers Ltd. (1970) 2 All E.R. 754, 757, Lord Denning approved the statement from Gatley on Libel on Slander (6th Edn.) para. 1046 that:

"A defendant should never place a plea of justification on the record unless he has clear and sufficient evidence of the truth of the imputation, for failure to establish this defence at trial may properly be taken in aggravation of damages" and continued by saying:

I have always understood such to be the duty of counsel. Like a charge of fraud, he must not put a plea of justification on the record unless he has clear and sufficient evidence to support it" (emphasis added).

It is therefore most unfortunate that counsel for the appellant should have pleaded fraud in a most virulent form in this case and simply chose to ignore that pleading at trial without any explanation whatever for making the damaging allegations or for abandoning them.

6. The Belize Airport Authority is established pursuant to section 3 of the Belize Airport Authority Act, (BAA), Chapter 196B. Pursuant to section 17(2)(d) the Authority has power to grant leases, subleases or other interests or concessions in respect of land or buildings within a prescribed airport on such terms and conditions and subject to the payment of rent or other consideration as the Authority thinks fit.

7. Pursuant to section 5(1) of the BAA a board of directors is established which shall be responsible for the policy and the general administration of the affairs of the Authority. The Minister responsible for civil aviation is empowered to appoint the members of the Board. It is provided in section 5 (3) that the Financial Secretary, the Permanent Secretary to the Ministry responsible for civil aviation and the chief executive officer of the Authority Shall be ex-officio members of the board. However only the Financial Secretary has a right to vote.

8. Meetings of the board of directors are regulated by section 13 of the Act. Under this regime the Board was required to meet at least once monthly and at other times at the discretion of the Chairman or at the written request of a board member within 7 days of the request. The quorum for a meeting of the Board is four members with voting rights. Section 12(3) states as follows:

"Minutes in proper form of each meeting of the Board shall be kept by the secretary."

9. Section 34 of the BAA empowers the Authority to delegate to any of its directors, its secretary or to any of its employees such of its functions as it may determine.

10. Mr. Lumor argued Grounds 2, 3 and 4 of the Grounds of Appeal together. These grounds complained that:

(a) the learned trial judge erred in deciding that the former Chairman of the Authority had ostensible authority to enter into the two leases with the respondent;

(b) the learned trial judge erred in treating the appellant as an incorporated private company to admit of ordinary company law principles; and

(c) the learned trial judge misapplied the "ostensible authority" doctrine.

11. The evidence led at trial disclosed that there were no minutes of the board of directors showing that the Board granted the leases to the respondent or that the Board authorized the Chairman and Secretary to sign the leases and affix the seal of the Authority to those leases. Oral evidence was led from the representative of the respondent who stated that she negotiated with the Board over a period of time, attended meetings of the board, had various discussions with the Chairman and other members of the board in anticipation of the grant of the leases and eventually signed the leases. The former Chairman of the Authority testified on behalf of the respondent that the board approved the grant of the leases and authorized him to sign the leases and affix the seal of the Authority thereto. He challenged the appellant to call members of the board to deny his evidence that the board had itself granted the leases to the respondent and had authorized him to sign the leases on behalf of the board. The appellant did not accept this challenge. Shanks, J. accepted the evidence of Mrs. Sylvestre, the respondent's representative and Mr. Godoy, the former Chairman. He found as a fact that despite the lack of minutes, the respondent had established that the Board approved the grant of the leases to the respondent and that the board had authorized Mr. Godoy, its Chairman, to sign the leases on behalf of the Authority.

12. Mr. Lumor submitted that the lack of minutes of a board meeting authenticating the evidence of Mr. Godoy that he was authorized to sign the leases rendered the act of the Chairman ultra vires. He said that the Interpretation Act makes provisions for the circumstances in which the powers of a Board may be affected by defects and irregularities but these only relate to vacancies in the membership of the board, defects in the appointment or qualifications of the members and minor irregularities in the convening of meetings. Failure to keep minutes, he submitted did not fall into any of these categories. The keeping of minutes, he said1 was a mandatory provision of the BAA, and must be strictly complied with in order to make valid the actions and decisions of the Board. In my view, the simple answer to that proposition is that the duty to keep minutes is placed on the Secretary of the board and not on the board itself. There is nothing in section 13 of the BAA to indicate that the production of the minutes of the board is the only method by which the proceedings and decisions of the board can be authenticated or proved. It would be a most unreasonable interpretation of section 13(2) of the BAA to hold that any omission from the minutes of a properly constituted meeting of the board could invalidate the decisions of the board that were taken at that meeting.

13. Section 12(1) of the BAA provides that "The Seal of the Authority shall be authenticated by the signature of the chairman, or one director authorized to act in that behalf and the secretary." In this case, the leases were without a doubt signed by the Chairman and Secretary of the appellant and the Seal was undoubtedly authenticated by the signature of the chairman and the secretary.

14. It was further submitted by Mr. Lumor that the fact that the Authority had apparent authority to enter into an agreement like the leases in the instant case, was not a basis for the assertion that the former Chairman had legal authority to enter into leases on its behalf. In this case the facts as found by the trial judge are that the board of directors of the Authority approved the leases and then empowered the Chairman to sign on its behalf. At no time was the chairman of the Authority purporting to have the delegated authority of the board to negotiate the leases with the respondent and to sign the leases so negotiated. His evidence and that of the respondent's representative was that the Board did the negotiations with the respondent the board approved the lease and the board, through the instrumentality of its chairman signed the leases and affixed the Seal of the appellant thereto. This is exactly the procedure that was approved in General Medical Council v U.K. Dental Board, (1936) Ch. 41.

15. Shanks, J. based his decision squarely on his finding that the Chairman and the Secretary were authorized by the Board to sign the leases on behalf of the board. He then went on to give alternative bases for his decision in paragraph 8 of his judgment. He said that the appellant would be estopped in the circumstances of this case from denying the authority of Mr. Godoy and further that Mr. Godoy's appointment as Chairman clearly amounted to a representation that Mr. Godoy had authority to enter into a contract of this nature on behalf of the Authority. Those expressions of the law were in the circumstances of this case clearly obiter. They were not necessary for his decision and were in fact dealt with by him in a summary way in a single paragraph of his judgment. I have therefore refrained from discussing Mr. Lumor's ample submissions on the issue of ostensible authority.

16. Ground 1 of the grounds of appeal relate to the capacity of the respondent to bring suit in the court. It stated that the respondent, Ueta of Belize Limited, was incorporated contrary to the prohibitions in sections 8, 9 and 13 of the Exchange Control Regulations - S.I. 30 of 1976 and section 6 of the Exchange Control Regulations Act, Chapter 43 and therefore Ueta of Belize Limited had no legal capacity to institute an action. In support of this ground Mr. Lumor submitted that UETA, Inc., the parent company of the respondent subscribed to the memorandum of association of the respondent and took 7,500 of the 10,000 shares issued by the respondent in contravention of the provisions of the Exchange Control Regulations Act. This point was not raised before the court below but Mr. Lumor submitted that this Court had the right not only to hear this ground but it had an obligation to raise the issue of illegality itself.

17. Section 3(1) of the Exchange Control Regulations Act (the Act) enables the Minister to make regulations as he may deem expedient in any matter or thing connected with exchange control. In section 3(2) of the Act specific power is given to the Minister to make regulations relating to "securities" which term is defined in regulation 42(1) of the Exchange Control Regulations Act to include "shares". Regulation 8(2) of the Exchange Control Regulations (the regulations) prohibits any person resident outside Belize from subscribing to the memorandum of association of a company formed under the Companies Act of Belize without the permission of the Competent Authority, that is, the Central Bank. The appellant introduced at trial a letter from the Central Bank of Belize dated February 22, 1999 which stated that:

"According to our records, there are no indications of any approval granted between 1994 and present to UETA, Inc. to subscribe to the Memorandum of Association or to take shares in UETA of Belize Limited."

18. The appellant led no evidence as to who were the subscribers of the memorandum of association of Ueta of Belize Limited. It did not produce a copy of the memorandum of association of that company or any oral evidence on that point. There was therefore no basis for the very ample submissions from Mr. Lumor on the subscription point. But if Mr. Lumor had adduced evidence to support his submission that UETA, Inc. had subscribed to the memorandum of association of UETA of Belize Limited, he would be met with the provisions of regulation 8(2) of the regulations which provided in express terms that such an act would not invalidate the incorporation of the company. Regulation 8(2) is in these terms:

"8(2) The subscription of the memorandum of association of a company to be formed under the Companies Act, by a person resident outside the scheduled territories, or by a nominee of another person so resident shall, unless he subscribes the memorandum with the permission of the Controller, be invalid in so far as it would on registration of the memorandum have the effect of making him a member of or shareholder in the company, so however that this provision shall not render invalid the incorporation of the company; and if by virtue of this paragraph the number of the subscribers of the memorandum who on its registration become members of the company is less than the minimum number required to subscribe the memorandum, the provisions of the said Act relating to the carrying on of business of a company the number of whose members is reduced below the statutory minimum shall apply to the company as if the number of its members had been so reduced."

19. Not only is the Minister given a power to make regulations by section 3 of the Act, he is empowered pursuant to section 4 of the Act to "exempt any person or body of persons from the provisions of the exchange control regulations". A person who contravenes or fails to comply with any of the regulations commits an offence and is punishable on summary conviction by a fine. Mr. Lumor submitted that the attempt by the Minister to provide in regulation 8(2) for the sanctions which should follow when a person resident outside the scheduled territories subscribes to the memorandum of association of a local company without the permission of the Controller was ultra vires. He based this submission on section 6(1) of the Act that sets out the penalties for a contravention of the regulations and said that the penalty provided in this section of the Act much attach to any breach of the regulations. Such a sanction was in his submission automatic and could not be varied or modified in any way by a regulation made by the Minister pursuant to his regulatory power. He stressed the paramountcy of Acts of Parliament over subsidiary legislation. The short answer to these disingenuous submissions is that the Act must be read as a whole. Section 4 of the Act gives the Minister express power to make exemptions from the provisions of the regulations which must include exemption from sanctions that would ordinarily impact upon failure to act in conformity with a particular regulation. That is exactly what the minister did in respect to the subscription of the memorandum of association of a local company by a non-resident person. The Act could not be clearer in its intent and regulation 8(2) is clear and unambiguous. When a non-resident subscribes to the memorandum of association of a local company he does not by that act alone commit an offence under the regulations. These arguments were, however, academic because there was no evidence that UETA Inc. had subscribed to the memorandum of association of UETA of Belize Limited.

20. The final ground argued on behalf of the appellant by Mr. Lumor was that the court below erred in awarding damages to the respondent or in assessing damages failed to take into consideration all relevant factors. Shanks, J. in his very careful way, took into consideration the evidence adduced by the respondent in support of its claim for damages. The appellant did not give the respondent the opportunity to be present when its fixtures and fittings and inventory were being removed from the Philip Goldson International Airport building and the circumstances of the removal drew adverse comment from the trial judge. He said:

"There were negotiations between the parties which came to nothing so the Plaintiff started this action on 31 March 1999. An application was made for an interlocutory injunction to stop the BAA seeking to resile from the terms of the lease. Their application failed and on the same day (30 April 1999) the BAA simply removed all the Plaintiff's fixtures and fittings and inventory without any kind of warning damaging them severely in the process. Notwithstanding that the application for an injunction had failed this was, in my view, oppressive and unacceptable behaviour on the part of those responsible for running a public authority."

In my view these comments were fully justified. The trial judge might very well have said that this was a case in which the judge, before whom the application for an injunction came to be heard, properly exercising his judicial discretion, ought to have granted the interlocutory injunction on the evidence that was presented before him and which forms a part of the record.

21. The respondent adduced evidence of its profits for the six month period of operation prior to the eviction on April 30, 1999. That figure of $167,000.00 was not an estimate but rather it was the amount verified by Price Waterhouse a reputable accounting firm. With this figure as a starting point, the trial judge made various calculations and arrived at a loss of profit of $850,000.00 over the life of the two leases and on the assumption that the respondent would have exercised its option to renew at the expiration of the five year lease for the further 10 year period. He took into consideration the submissions of the appellant that contingencies including increased crime, possibility of future competition in the Airport's Lounge, and the need for respondent to continuously fulfill the terms of the lease. In addition to these contingencies, the trial judge heavily discounted the gross figure for loss of profit to reflect the fact that a 15 years stream of income would be received in a lump sum and arrived at the figure of $850,000.00. He deducted the sum of $167,000.00 the amount of rent payable for the period 30 January to April 30, 1999 and gave credit to the respondent for loss and damage to its stock by the appellant amounting to $195,391.00. After applying interest on the balancing figure of $108,391 at 12% for one year, the trial judge arrived at the sum of $121,397.00 as the loss sustained by the respondent that ought to be added to the loss of future profits. The total damages awarded to the respondent therefore amounted to $971,397.00.

22. Contrary to the submissions of Mr. Lumor, I can find no error of principle in the manner in which the trial judge assessed the damages in this case. As the trial judge said the evidence of the respondent as to the loss of profit went unchallenged. Mrs. Sylvestre was not shaken in cross-examination on the figures that she presented and the appellant adduced no evidence of its own in relation to damages. I find no merit in this submission.

23. For the reasons contained herein I would dismiss this appeal and affirm the judgment of Shanks, J. The appellant must pay the costs of the appeal to be agreed or taxed.

MOTTLEY, J.A.

1. The issue that arises on this appeal is whether the leases granted by Belize Airport Authority (the Authority) to Ueta of Belize Limited (UETA) dated 18 August 1998 were valid.

In deciding the question whether the leases were valid, it is necessary to examine whether they were properly executed in accordance with the provisions of the Act.

2. The Authority is a statutory corporation established by the Belize Airport Authority Act Cap 196B, (the Act). It is empowered to enter into contracts and may acquire, hold, mortgage, lease and dispose of all kinds of property. The Authority has a Board of Directors which has the responsibility "for the policy and general administration of the affairs of the Authority. The Board of Directors of the Authority (the Board) is appointed by the Minister responsible for civil aviation and shall consist of not less than five and not more than 9 persons. The chairman of the Board is appointed by the Minister from among the directors.

3. Under the Act, whenever the seal of the Authority is used, it has to be "authenticated by the signatures of the chairman, or any director authorized to act in the behalf, and the secretary." Every document under seal must therefore be signed by the secretary and the chairman or a director so authorized to sign. In order for a director to sign he must be specifically authorized to do so by the Board.

4. In the exercise of its function the Authority is authorized (inter alia) to:

"grant leases, subleases or other interest or concessions in respect of land or buildings within a prescribed airport on such terms and conditions and subject to the payment of rent or other consideration as the Authority may think fit."

This discretion is wide and is circumscribed only by the requirement that rent or some other consideration should be paid.

Thus it is clear that the Authority has power to grant leases. When such leases are required to be under seal, and the seal of the Authority is to be affixed to the lease, it has to be authenticated by the signature of the chairman or one director authorized to sign and the secretary.

5. In the leases to UETA, the seal of the Authority was affixed to the lease and authenticated by the signatures of the chairman and the secretary. This is in accordance with the provisions of the Act.

6. The Authority is empowered by the Act to delegate to any of the directors, secretary or any of its employees such function as the Authority may from time to time determine.

7. Counsel for the Authority appellant concedes that, under the Act, the Authority has the power to grant the leases. However, he questions the legal capacity of the chairman to sign the leases. He contends that no meeting of the Board of the Authority took place on the date in question at which the chairman claimed his authority. He further contends that there are no Minutes of Meetings of the Board of the Authority showing:

(i) the leases were granted;

(ii) the terms of the leases were approved;

(iii) authority was delegated to the chairman to negotiate and grant the leases;

(iv) a resolution passed authorizing the chairman to affix the common seal of the Authority to the leases.

He submits that it was clear that the Authority did not conform to the specific provision of the Act which it was required to follow. The judge ought to have applied the provision of the Act more particularly the provision of sections 17 (2), 13 (1), (2) (4). He points out that under section 13 (4) the decision of the Board "shall be by majority vote."

He states that the Authority is a statutory corporation enacted by Act of Parliament, and its duties and powers are set out in that Act. The Minutes of each meeting of the Board shall be kept by the Secretary. In the absence of any references in the Minutes to the granting of the leases to UETA, then, the inference he contends, must be drawn that the Board did not take any decisions relating to the leases.

The Minutes of the Board of Directors of the Authority do not contain any mention of the Board consenting to grant the leases to UETA. Counsel submits that the absence of this consent in the Minutes has the effect of making the lease null and void.

Counsel further submits that the trial judge erred in deciding that the former Chairman of the Authority had been authorized to enter the leases with UETA. He contends that the judge erred in treating the Authority as an incorporated private company and applying principles of company law. The judge, he says, misapplied the "Ostensible Authority Doctrine."

8. The requirement for Minutes of each meeting of the Board to be kept by the Secretary is, in my view, no more than a requirement for the proper administration of the Board. Failure to keep the Minutes in proper form, while it may be the subject of adverse comment on the conduct of the secretary, cannot, in my opinion, rise to the level of invalidating leases which have been properly authenticated. The Act does not contain any provision requiring that a resolution must be passed by the board and duly recorded in the Minutes before the leases are granted. Nor does it contain any provision that, the failure to record in the Minutes a decision to grant leases invalidates those leases if they were otherwise properly authenticated.

9. The Act is a Public Act and the powers of the Board of the Authority are set out under the Act. UETA must be taken to have had knowledge what the Act required before the Authority could enter into a lease. No restriction was imposed other than the requirement that the seal of the Authority must be authenticated by the signature of the chairman or a director so authorized and the secretary. The seal of the Authority was in fact authenticated by the chairman and the secretary. UETA was therefore entitled to conclude that the Authority had fulfilled all internal conditions required to enter into the leases.

10. In my view, the failure to record in the Minutes of the meeting of the Board the decision to grant the leases to the UETA in the circumstances of this case is nothing more than an omission on the part of the secretary and cannot be used by the Authority to invalidate the leases signed by the chairman.

11. It is my opinion that, having regard to the requirement of the Act, the leases signed by the Authority were in fact valid. Had the Act set out as a condition precedent those factors for which the appellant was contending, then other considerations would have applied.

12. In ground I of the amended grounds of appeal it is complained that UETA was incorporated contrary to the prohibition contained in sections 8, 9 and 13 of the Exchange Control Regulations S.I. 30 of 1976 and section 6 of the Exchange Control Regulation Act Cap 43 and therefore has no legal capacity to institute an action.

13. It is submitted by counsel that UETA Inc, a foreign company, subscribed to the Memorandum of Association of Ueta of Belize Limited and was allotted shares without the permission of the Central Bank of Belize or the Director of Exchange Control. It is also submitted that this failure on the part of UETA Inc. before subscribing to the Memorandum of Association is a crime by virtue of the provision of section 6 of the Exchange Control Regulation Act. It follows therefore, counsel contends, that while the Minister has power to exempt persons from the provision of the Regulations, he cannot waive a crime through the exercise of the powers delegated to him under the provision of sections 3 and 4 of the Exchange Control Regulations Act, which he alleged, that the Minister sought to do under the Exchange Control Regulations. Counsel relies on the maxims "Ex maleficio non contractus" or "Ex turpi causa non oritur actio."

14. Section 3 of the Exchange Control Regulation Act Cap 43 empowers the Minister to make such regulations as he deems expedient in respect of any matter or thing connected with Exchange Control. He made regulations known as the Exchange Control Regulations and they were published as S.I. 30 of 1976.

15. Regulation 8 (2) the Regulation provides as follow:

"The subscription of the memorandum of association of a company to be formed under the Companies Act, by a person resident outside the schedule territories, or by a nominee for another person so resident, shall, unless he subscribed the memorandum with the permission of Central Bank of Belize, be invalid in so far as it would on registration of the memorandum have the affect of making him a member of or a shareholder in the company, so, however, that this provision shall not render invalid the incorporation of the company …"

16. The effect of this Regulation is that the subscription of the memorandum of association by a person who is resident outside the schedule territories, is invalid unless he has the permission of the Central Bank of Belize. However, this invalidity is limited to preventing the subscriber from becoming a member of or shareholder in the company. But the invalidity does not extend to the incorporation of the company. The company remains a validly incorporated company. So, if a person does not obtain the permission of the Central Bank of Belize before subscribing to the memorandum of association of the company, he would not be able to be registered as a member of or shareholder in the company when the memorandum of association was being registered. However, the incorporation of the company however remains valid and effective.

17. The Authority alleges that Ueta Inc, a foreign company, owns 75% of the shares in Ueta of Belize Limited. It states that, when Ueta Inc subscribed to the memorandum of association of Ueta of Belize Limited and took allotment of 7,500 of the 10,000 issued shares of Ueta of Belize Limited, it did not comply with the Exchange Control Regulations Act and the Exchange Control Regulations.

18. Counsel for the Authority submits therefore that, "Ueta of Belize Limited, is not properly registered under the Exchange Control Regulations Act and the Regulations as a company to do business in Belize and as a result it is not a legal person with a legal capacity to mount an action in the Court of Belize." He states the company is the product of crime and therefore has no legal status. The offence to which reference is made is contravention of the provisions of Section 6 (1) of the Exchange Control Regulations which makes it an offence for any person to fail to comply with or contravene any regulation made under the Act.

19. In my view this submission must fail. Regulation 8(2) expressly states that failure of a person resident outside the schedule territories to obtain the permission of the Central Bank of Belize before subscribing to the memorandum of association prevents the person subscribing the memorandum from becoming a member of or shareholder in the company. It does not, as expressly stated in Regulation 8(2), affect the incorporation of the company. The company retains its legal persona and as such is competent to institute legal proceeding.

20. As regards the appeal against the award of damages I have read the judgment of my brother Rowe and I agree with the conclusion he has reached as regards this aspect of the appeal.

21. For these reasons I would dismiss the appeal with costs to be paid by the Appellant such cost to be taxed if not agreed. The judgment below is therefore affirmed.

CAREY, JA:

1. The respondent who was the plaintiff below, held leases of two premises described respectively as "Duty Free Shop #1" and "Departure Duty Free Area" both on the lower fiat of the Phillip Goldson International Airport Building and intended to be operated as Duty Free stores respectively at the Arrival and Departure areas. Both leases were for a period of five years commencing 13 August 1998. On 30 April 1999, as was averred in the respondent's statement of claim, the appellant wrongfully entered Duty Free Shop #1, took possession of and removed all the respondent's goods and evicted the respondent. On 25 May 1999 the appellant verbally and by letter of the same date declared the lease invalid and demanded the removal of the respondent by 18 June 1999. The respondent claimed damages, a declaration that the leases were both valid and an injunction. The defence was, to say the least, remarkable. The first line was a denial that the appellant at any time granted, approved or authorized the leases in question. The second line was that the leases were obtained fraudulently. Particulars of fraud were pleaded. The authority put in a counter-claim for damages for unlawful occupation.

2. At the trial, the defence led no evidence of fraud. In those circumstance, what remained of the defence, was that the lease was void or of no effect because Mr. Godoy, the former Chairman, and Mrs. Tillett, a former Director of the Authority who participated in the execution of the lease had no authority to do so, there being no decision of the Board to enter into the lease or delegate to them power to do so. The judge described it as highly technical and unmeritorious but which, if proved valid, effect had to be given. It failed. By an order dated 17 April 2000 Shanks, J. entered judgment for the respondent in the sum of $B971,397.00 with costs. No mention is made in the order of the counter-claim which, presumably, was dismissed

GROUNDS 2, 3 & 4

"… (2) The Learned Trial Judge erred in deciding that the former Chairman of the Appellant had authority to enter into the leases with the Respondent.

(3) The Learned Trial Judge erred in treating the Appellant as an incorporated private company to admit of the application of ordinary company law principles.

(4) The Learned Trial Judge misapplied the "ostensible authority" doctrine.

These grounds were argued together.

3. With respect to ground 2, the learned judge in the course of a careful judgment set out provisions of the Belize Airports Authority Act constituting the Authority, and its powers relevant to this case. He then continued (at p.292):

"... It will be apparent that the BAA has ample power to enter into an agreement like the one in question. Mr. Lumor's defence is not therefore one of ultra vires in the strict sense but relates solely to the authority of Mr. Godoy and the internal management of the BAA..."

4. Mr. Lumor challenges this finding of the judge. He said that the fact that the Authority had apparent authority to enter into leases is not a basis for the assertion that the former Chairman had legal authority to enter into leases.

5. With all respect to the pertinacity of learned counsel, this challenge on his part misconceives the issue raised on this aspect of the pleadings. In its defence, the appellant denied paragraphs 1-9 of the statement of claim which consisted of nine paragraphs. In effect it denied the existence of any leases between the parties. Then he raised the issue of fraud in respect of which no evidence was adduced. Thirdly, by paragraph 9 of the defence, it was pleaded as follows:-

... The making of two leases alleged in paragraphs 1 and 2 of the Statement of Claim and their purported execution are acts which are ultra vires the Belize Airports Authority Act, Chapter 196B and therefore null and void and not binding on the defendant..."

I fail to appreciate how merely traversing the existence of a lease can possibly raise as an issue the capacity of the former Chairman to enter into leases on behalf of the Authority. Paragraph 9 raises as an issue whether the leases were made or executed in conformity with the Act.

6. It was accepted at trial that on the face of it the leases were in due form and that therefore the burden of proof lay on the defence (the appellant). The defence in my opinion endeavoured to show that neither Mr. Godoy nor the Chief Executive Officer or the Secretary were delegated or authorized by the Board to enter into the agreement to lease. No evidence to this effect was led, but an argument was mounted and reiterated before us to the effect that the recording of minutes was mandated by the Act and the absence of such a record must be regarded as an illegality. In the result, there was no decision. I trust I do no disrespect to the argument of counsel. The record of the proceedings was the only means of the proof and it was, as he maintained, crucial to the fact whether or not the Board took a decision.

7. I would have thought that the existence of a state of things may be proven in more ways than one. Doubtless, in the case of decisions of the Authority, minutes of the proceedings would be one method, but equally a member of the Board could give the same evidence. I am entirely unaware of any rule of law which would forbid it. At all events, Mr. Lumor was quite unable to provide any authority nor did he suggest any authority which bore on this matter.

8. The absence of minutes may be an irregularity but I do not think it can fairly be categorized as an illegality. But even if it can, that failure to take minutes as required is not visited with any sanction. It is unlike the rule which prescribes the quorum for a properly constituted Board. Thus a failure to comply would result in the incapacity of the Board to act but if it did, any decision would be without effect: it would be null and void. I do not suppose Mr. Lumor would go so far as to say that if at such a meeting lacking a quorum, some decision were to be taken and no minutes were recorded, that some person present could not give evidence of this lack of quorum. I cannot therefore accept that argument which, with respect to Mr. Lumor, is fallacious.

9. The trial judge accepted that Mr. Godoy had the approval of his Board to the signing of the lease. This was a finding of fact for which no reason has been advanced for any interference by this court. In my judgment, that is dispositive of the case.

10. With respect to grounds 3 and 4, Mr. Lumor seized upon the fact that the learned judge sought to rest his judgment on the alternative basis of estoppel and ostensible authority. In the light of what I have said, the submissions made in respect of those grounds which challenged his reasoning are, in my judgment, essentially academic. Thus although he deployed an attractive range of arguments in that regard, for my part, I do not think it is at all necessary to come to any conclusion with respect to them.

11. Mr. Lumor astute counsel that he is, realizing the frailty of his grounds, sought leave to add a fresh ground which was in the following form:

GROUND 1

"…The Respondent company, Ueta of Belize Limited, was incorporated contrary to the prohibitions in provision of Section 8, 9 and 13 of the Exchange Control Regulations S.I. 30 of 1976 and Section 6 of the Exchange Control Regulations Act Chapter 43 and therefore has no legal capacity to institute an action..."

No objection was taken by Mr. Barrow, S.C. The court granted leave and allowed Mr. Lumor to supply information which was not before the judge. It is of course a point which was not raised in the court below.

12. It can be said at once that the suggestion contained in the ground that the respondent is a product of a crime under section 8, 9 and 13(2) of the Exchange Control Regulations Act S.1. 30 of 976 is based on a misunderstanding of those provisions. The allegation being put forward is that Ueta Inc. a foreign company subscribed to the memorandum of association of the respondent and was allotted shares without the permission of the Central Bank or the Director of Exchange Control. Section 8 which is the provision allegedly breached, provides as follows:

"...8(1) Except with the permission of the Controller, no person shall in Belize issue any security or do any act which involves, is in association with or is preparatory to the issuing outside Belize of any security which is registered or to be registered in Belize, unless the following requirements are fulfilled, that is to say:

(a) neither the person to whom the security is issued nor the person, if any, for whom he is to be a nominee is resident outside the scheduled territories; and

(b) the prescribed evidence is produced to the person issuing the security as to the residence of the person to whom it is to be issued and that of the person, if any, for whom he is to be a nominee.

(2) The subscription of the memorandum of association of a company to be formed under the Companies Act, by a person resident outside the scheduled territories, or by a nominee for another person so resident, shall, unless he subscribes the memorandum with the permission of the Controller, be invalid in so far as it would on registration of the memorandum have the effect of making him a member of or shareholder in the company, so, however, that this provision shall not render invalid the incorporation of the company; and if by virtue of this paragraph the number of the subscribers of the memorandum who on its registration become members of the company is less than the minimum number required to subscribe the memorandum, the provisions of the said Act relating to the carrying on of business of a company the number of whose members is reduced below the legal minimum shall apply to the company as if the number of its members had been so reduced..."[Emphasis supplied]

13. As the Act provides, the failure to obtain permission renders the subscription to the memorandum invalid but does not render the incorporation of the company invalid. That is the sole effect of that section. It thus creates no offence punishable under the Exchange Control Regulations Act Cap. 43. The provision states precisely what are the sanctions for failing to obtain the permission of the Controller, which are twofold:

(a) the subscription is invalid and

(b) if the subscribers thereby fall below the minimum required to subscribe, there are risks.

There is nothing in the language of the provision which absolutely forbids the subscription of the memorandum of association. If that were done, it could be easily seen that an offence was intended. There is identified in this section a situation which if it occurs is attended with risks as set out at (a) and (b) above. The failure to comply is thus visited with consequences which are not of a penal nature. The language used is thus a relevant aid. As it seems to me, any argument founded upon sec 8(2) as creating an offence to make the respondent "the product of a crime", is therefore untenable.

14. Mr. Lumor sought to extend this ground of appeal by arguing that the Minister acted ultra vires the Act in modifying Act 43 by declaring that a company incorporated in contravention of section 8(2) shall not be invalid. I do not think this argument can legitimately be made under this ground and accordingly, should not be entertained. He must be confined to the ground in respect of which leave was granted. In the circumstances, I propose to say no more in that regard.

15. There was an appeal against damages. It was said that the respondent had not verified its losses by the production of any records and the evidence was altogether insufficient to prove the significant damages claimed and ultimately awarded.

16. I am not able to discover what amount was awarded which ought not and what factor, the learned judge failed to take into consideration. He considered all the objections raised by Mr. Lumor, and arrived at a figure of $850,000 for loss of profit after allowing a heavy discount and contingencies suggested by counsel. Mr. Lumor did not, so far as I can find, indicate any factor which the judge did not take into account, nor any factor which he brought to the court's attention which was ignored. The arguments in this regard did not have much substance with the result that this ground too fails.

17. In the result I would dismiss the appeal and affirm the judgment of the court below. The respondent would, of course, be entitled to costs to be taxed if not agreed.

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