Gov’t to pay over $286K in airport case – COURT

The government has lost a long-running legal battle brought by businessman Glanville Penn, who has been awarded $286,796 as well as legal costs.

Penn, who operates the Turtle Dove Restaurant at Terrance B Lettsome International Airport, had taken the Attorney General to court for breach of contract.

At the time the businessman filed the suit in June 2012, he had sought $4,426,511 and legal costs.

The case came after the government – among other things – stooped over backwards to accommodate various requests, and sometimes ended up with loose ends in contracts and tender documents.

“The history of the matter shows that the claimant (Penn) took issue with every agreement document put forward by the government,” noted High Court judge, Justice Gerhard Wallbank (QC).

No contract document

According to the judge, Penn started to operate his business at the airport when it was known as the Beef Island Airport.

Several years later, Government started to build a new terminal building at the facility.

A few days after the new building eventually opened, Penn received a notice in March 2002 to quit operating at the old terminal, because operations were being transferred to the new terminal building.

Penn was ‘justifiably’ vexed about the notice, according to Justice Wallbank.

The judge explained: “The letter told him (Penn) that the [old] terminal was going to close two days later on 21 March 2002, and that he had to remove his equipment within one week of the cessation of operations. The letter did apologize for the short notice, but this was cold comfort.”

The letter put relations between Penn and the government on a wrong footing, and they stayed that way throughout the exchanges that followed.

There were several protracted discussions, demands and assurances that culminated in Penn taking the government to court in June 2012 for breach of contract, claiming effectively that he was not given enough notice to move.

Penn contended that, based on his contract, there was an agreement for 24 months’ notice.

But the Government contended that a notice for one month was agreed.

According to the judge, it is not precisely clear what legal arrangement existed. Neither of the two parties produced the relevant document as proof in court.

“There were some other shops or outlets at the original terminal, but the government did not produce any document in these proceedings for those either, to be able to show the probable legal basis for the claimant’s presence,” added the judge.

“The claimant (Penn) claimed to have had a lease, and to have had a document, but that this had been lost in hurricane Hugo in 1989. The government claimed that the claimant had a mere license. In any event, whatever strict legal regime governed the claimant’s relationship with the government, the parties’ commercial relationship worked well enough until it went seriously awry in 2002.”

Considering that the contract was not available in court, the judge relied on other procedures to arrive at a conclusion.

“The Finance Secretary, Mr Neil Smith, considered six months to be reasonable [time for Penn to have vacated the old terminal]. I agree with Mr Smith’s assessment. One, or even three months would be too short if the claimant had to give employees notice of termination of their employment contracts.”

“On the other hand, the government cannot reasonably be expected to timetable redevelopment of an airport complex with accuracy two years in advance. Overruns – and even on smaller developments – often do occur. Mr Smith’s period strikes a balance which I agree is reasonable,” said Justice Wallbank.

He eventually accepted Penn’s claim for losses of $1,125 per day, resulting from the short notice given.

“I will therefore award the claimant $205,312.50 under this head, being $1,125 multiplied by 182.5 days,” the judge further said.

No bar stool; not working washer

The government, on 12 January 2004, proposed that it would have constructed a bar and provided stools at the new terminal building. That was not done.

As such, the judge awarded Penn $70,424 for loss of profits due to the absence of a bar.

Penn, in the meantime, also contended that he was forced to hire two additional workers to wash dishes because the dishwasher, which is the property and responsibility of the government, did not work.

Penn declared that he had no right or obligation to have repaired or replaced the dishwasher. As such, the judge awarded him a total $11,060.

Gov’t fights back

The government tried to strike back at Penn, but Justice Wallbank dismissed the counter-claim.

The Government tried to recover loss of rental income at $3,500 per month from September 2002 to April 2005, in an amount of $108,500.

It claimed that the new airport premises were ready for occupancy as at September 2002.

The government said Penn was under a contractual obligation – pursuant to the tender documents – to enter the building after being notified that it was ready.

The judge disagreed.

He explained: “The premises were not in fact ready for occupancy in September 2002. The tender documents – when properly construed – required the Government to construct and the eventual licensee to fit out and equip the premises.”

“In addition, the rights and obligations of the parties then evolved until the agreement of 28 April 2005 was reached. The premises then only became ready for occupancy in around July 2005,” the judge said.

To read the written judgment in full, CLICK HERE