Heron's Flight Inc. v The Airports Authority

• Jurisdiction: Caribbean States
• Court: Eastern Caribbean Supreme Court
• Judge: Actie, J.
• Judgment Date: 27 February 2024
• Judgment citation (vLex): [2024] ECSC J0227-2
• Docket Number: CLAIM NO. GDAHCV2019/0439

Between:

Heron's Flight Inc. (Trading as “Spice Isle Coffee”)

Claimant

and

The Airports Authority

Defendant

Before:

The Hon. Mde. Justice Agnes Actie High Court Judge

CLAIM NO. GDAHCV2019/0439

IN THE SUPREME COURT OF GRENADA

AND THE WEST INDIES ASSOCIATED STATES

HIGH COURT OF JUSTICE

(CIVIL)

Appearances:

Mr. James Bristol K.C. with him Ms. Melissa Modeste Singh for the Claimant

Ms. Shireen Wilkinson for the Defendant

Actie, J.

1 The claimant claims damages for misrepresentation and breach of warranty, special damages for a refund of maintenance fee in the sum of $5,760.00 together with costs.

The claimant's claim

2 The claimant, trading as Spice Isle Coffee, operates a coffee shop at the Maurice Bishop International Airport. The claimant avers that on 4 ^th May 2016 it entered a memorandum of understanding (1 ^st MOU) with the defendant for the operation of a food and beverage concession, Spice Isle Coffee, located on the second floor of the Airport.

3 The claimant contends that it was induced into making the 1 ^st MOU upon the defendant's warranty and representation that food and beverages would only be sold on the second floor of the airport and that the main food and beverage vendor currently on the ground floor would be relocated to the second floor.

4 The claimant avers that it prepared and presented its business plan to the defendant for approval with forecasted earnings entirely premised on representations that food and beverages would not be sold on the ground floor.

5 The claimant states that on 2 ^nd August 2017, the parties amended the 1 ^st MOU and signed a 2 ^nd MOU that lengthened the term of the proposed lease from 3 to 5 years and decreased the rental fee, since the rental unit procured was smaller than originally intended. By the terms of the MOUs, the parties were to enter into a formal lease agreement to govern their relationship.

6 The claimant commenced operations on 23 ^rd October 2017 before the lease was executed. The claimant states that it noticed that the gift and duty-free shops on the ground floor were selling food, namely snacks and beverages. It was also noticed that the defendant placed a cold drink vending machine on the ground floor resulting in a reduction of foot traffic to the second floor in breach of the warranty.

7 The claimant states that the defendant in a meeting held on 12 ^th March 2019 admitted to representing that no food and beverages would be sold on the ground floor. However, the defendant asserts that its definition of “food” and “beverages” differed from that of the claimant, in that it did not consider snacks and soft drinks to be food and beverages.

8 The claimant states that by reason of the representation and/or breach of warranty, it suffered loss and damage as sales on the second floor were severely reduced due to the availability of food and beverages on the ground floor resulting in its projected income also being severely reduced.

9 The claimant contends that it was agreed that the claimant would pay a monthly sum of $240.00 for air conditioning maintenance if a unit was provided by the defendant, however the defendant has not provided such service yet has billed the claimant said monthly sum from November 2016 to October 2019.

Defendant's case

10 The defendant contends that there was no inducement on its part and that all interactions between the parties were fairly negotiated.

11 The defendant contends that Clause 10 of the 1 ^st MOU identified the types of food the claimant wished to sell, and the 2 ^nd MOU did not revise the items, however the claimant has proceeded to sell the other items without seeking the leave of the defendant.

12 The defendant states that it removed the exclusivity on the sale of food and beverage with its long-standing tenant, Goddard's Catering Grenada, and varied the contract with Goddard's and other tenants to exclude snacks and soft beverages including drinks such as water. The defendant avers that snacks and soft beverages have always been sold by the tenants on the ground floor notwithstanding Goddard's exclusivity arrangement relative to the sale of food and beverages.

13 The defendant states that it never undertook to vary its tenancy agreements with the other tenants to prevent the sale of soft beverages and snacks, as such variation in order to facilitate the claimant would be too onerous, especially in light of this request never being specifically made and not forming part of the MOUs.

14 The defendant states that it was only at the meeting held on the 12 ^th March 2019, nearly three years after the 1 ^st MOU was signed, that the claimant raised the issue of the interpretation of “food and beverage”. The defendant states that the claimant had a duty to clearly identify its requirements to the defendant.

15 The defendant states that the claimant's projections were made on the claimant's erroneous interpretation. The defendant further avers that the claimant is not the only vendor of food and beverage on the second floor, and that none of the other tenants have raised an issue of the sale of snacks and soft beverages on the ground floor or on any floor affecting their bottom line.

16 The defendant states that the vending machine complained was not placed in breached of warranty, but was placed in the interest of customer service on the ground floor as all food and beverage outlets closed by 9:00pm. There being times where the last scheduled airline departure is delayed creating a necessity for the availability of snacks and drinks as part of international airport standards. The defendant states that in any event, the vending machine was eventually moved to the second floor to placate the claimant and as a good will gesture.

17 The defendant avers that clause 16 of the MOU requires the parties to enter into a lease agreement and to date the claimant has failed to respond to the fulsome comments on the lease agreement sent to the claimant's attorney on 2 ^nd April 2019.

18 The defendant states that the claimant agreed to contribute towards the payment of air-conditioning in both MOUs and while there may not be an actual vent in the claimant's unit, it benefits from centralised air conditioning.

The Evidence

Zofia Malisiewicsz

19 Zofia Malisiewicsz, Director of the claimant's company, in her witness statement states that she approached the representative of the defendant in 2014 to discuss her interest in opening a coffee shop to sell snacks, coffee and other beverages, however there were no units available for rent at the time. She states that the departure lounge was located solely on the ground floor with a few shops such as Goddard's Catering Group, Snack Bar and other shops selling snacks, beverages and ice creams. She said that in 2016, she explicitly sought and was given the assurance that no food and beverages would be sold on the ground floor so as to drive passenger traffic to the second floor. Thereafter she formulated the coffee shop business plan that included the coffee shop's forecasted earnings, which was a mandatory part of the approval based on the representation.

20 She states that Goddard's Catering “Snack Bar” was relocated to the second level and renamed Island Deli but the rest of the establishments selling food and beverages were left downstairs where they have the greatest possible exposure to passenger traffic. She states that access to the second floor was not exposed to passenger traffic and proved difficult as the escalator which was convenient for passengers carrying baggage was frequently out of service. She contends that the claimant's coffee shop suffered loss and was unable to meet its forecasted earnings.

21 On 26 ^th March 2018, the claimant wrote to the defendant requesting an expansion of the product range offered by the coffee shop in effort to boost sales and meet the forecasted earnings. By letter dated 4 ^th May 2018, the defendant approved her request for the sale of additional products save the request for the sale of alcohol. By email dated 7 ^th June 2018, permission was given to sell bottled beers.

22 An email dated 14 ^th October 2018 from the claimant to the defendant highlighted a myriad of issues and requested that the rent be adjusted to 6% of the claimant's gross earnings and a credit be issued for the excess paid, together with suggested lease amendments. On 9 ^th November 2018, she emailed the defendant notifying of the payment of the 6% of the claimant's gross sales to which the defendant responded by email dated 12 ^th November 2018 informing that no approval had been given for the reduced amount.

23 By email dated 19 ^th November 2018, the defendant informed that should the claimant continue the breach of the MOU by making the adjusted payments, a replacement tenant would be found for the coffee shop.

Mr. Lenworth Gordon

24 Mr. Lenworth Gordon, Marketing and Property Manager of the defendant, in his witness statement said that he was told by the former general manager that a meeting was held on 7 ^th October 2014 with Gearld Rothaus on behalf of the claimant, with a proposal to only sell coffee. The parties signed the 1 ^st MOU with the agreed items listed at clause 10. The 2 ^nd MOU did not revise any of the items that the claimant wished to sell, however, the claimant proceeded to sell other items. The terms of both MOU's required the parties to enter into a formal lease agreement to govern their landlord/tenant relationship.

25 Mr. Gordon said he was advised by the former general manager that the exclusivity was removed on the sale of food and beverage held by their longstanding client, Goddard's catering. He states that snacks and soft beverages have always been sold by the tenants on the ground floor notwithstanding Goddard's exclusivity arrangement relative to the sale of food and other beverages including alcoholic drinks.

26 With respect to the vending machine, he...