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Another ruling from Actie – Part II

Attorney-at-law Shireen Wilkinson – was also on the team

High court judge Justice Agnes Actie has delivered a ruling in a matter involving the Grenada Airports Authority (GAA) and one of its clients operating a coffee shop at the Maurice Bishop International Airport (MBIA).

Spice Isle Coffee approached the court to seek damages for misrepresentation and breach of warranty, as well as special damages for a refund of maintenance fee in the sum of $5,760.00 together with costs.

In papers filed, the claimant told the court that on 4th May 2016 it entered a memorandum of understanding with the defendant for the operation of a food and beverage concession, Spice Isle Coffee, located on the second floor of the Airport.

“The claimant argues that the defendant provided no air conditioning unit in its rental space but has been billing the claimant for the monthly sum totalling $5,760.00 and continuing. The claimant seeks a reimbursement,” said the documents filed in court.

As a public service, THE NEW TODAY reproduces in full the Justice Actie ruling on the matter:-

37] Clause 10 of the 1st MOU describes the use of the premises exclusively for the development and operation of a coffee shop facility to provide: Expresso coffee drinks/Brewed Coffee, fresh roasted coffee beans, teas, pastries, sandwiches, yogurts, non-alcoholic beverages, salads and small snacks.

[38] The claimant’s business plan which it alleges had to be approved before the 1st MOU lists a start-up inventory of coffee beans, coffee filters, baked goods, salads, sandwiches, teas, beverages etc. The equipment listed were expresso machine, frozen beverage dispenser, blender, refrigerator, iced tea brewer, ice maker etc. The product description states that the menu will be built around expresso-based coffee drinks such as lattes, mochas, cappuccinos etc. The plan was to provide a quality drink demand of high coffee and extra ordinary fresh quality cups of coffee to guests using the best coffee preparation techniques. The focus of the claimant’s business plan and MOU was based on providing premium coffee drinks.

[39] The defendant states that what was represented to the claimant was the removal of the exclusivity arrangement it had with its previous tenant, Goddard’s Catering, for the sale of food and beverage as the sole concessionaire at the airport. The defendant states further that it always understood “food” and “beverage” to exclude snacks and soft beverages.

[40] The defendant contends that the claimant never requested a variation of its arrangements with the tenants on the ground floor to reflect the alleged misrepresentation, and also the items identified in the claimant’s business plan were not items that were in competition with the snacks and soft beverages sold by the other tenants on the ground floor.

[41] The court accepts the defendant’s evidence as it is noted that the only reference to possible competition in the claimant’s business plan was in relation to the Snack Bar operated by the Goddard’s where it is stated:

“Competition – Spice Isle Coffee recognizes Snack Bar (next door) as a potential competition because of its strong financial position and established operational practices. However, despite of the Snack Bar [sic] established market position, many customers favor smaller bars that offer different atmosphere and excellent coffee together with friendly and profession [sic] service”.

[42] The claimant presents no evidence other than her assertions of what she perceived as the misrepresentations made by the defendant. The claimant argues that it was reasonably entitled to believe that the words “food” and “beverages” carried its ordinary meaning and not as excluding snacks and soft drinks which were being sold on the ground floor of the airport. The claimant relies on the Oxford Dictionary’s definition of food, as: “things that people or animals eat” and beverage, which is: “any type of drink except water”.

[43] There are no other witnesses, nor documents in support of the claimant’s position. It is also worth noting that there is no reference to any representation in the claimant’s business plan, under the headings “Keys to Success” and “Competition”, that there will be no snacks and soft beverage of any kind being sold on the ground floor.

[44] In the circumstances therefore, the claimant has not provided any evidence to prove that as a matter of fact the said alleged representation was made. The defendant’s conduct in removing the exclusivity clause held by Goddard’s accords with the defendant’s posture that no further undertaking was given in relation to the other shops on the first floor. The absence of such expressed consensus for exclusivity cannot be inferred except with the conduct in relation to Goddard’s catering which was recognized in the claimant’s business plan.

Whether there was a breach of warranty by the defendant by placing a vending machine on the ground floor

[45] Chitty on Contracts describes a warranty as follows:

“The use of the word ‘warrant’ in this sense is reserved for the less important terms of a contract, or those which are collateral to the main purpose of the contract, the breach of which by one party does not entitle the other to treat his obligations as discharged.”

[46] The claimant argues that the defendant placed a cold drink vending machine on the ground floor of the airport in breach of its warranty.

[47] The defendant on the other hand states that the vending machine was placed in the interest of Customer Service. The defendant further states that it is an international airport, and that edible items and beverages cannot be confined to one area, but must be available at various locations at all times throughout the airport.

Related:  Another ruling from Actie

[48] Though the defendant asserts the above position, it is the evidence that it moved the vending machine to the second floor after the claimant’s complaint.

[49] This gives perspective to the extent of the agreement between the claimant and the defendant, since if the placement of a vending machine was not contemplated by the discussions of the parties, why else would the defendant move same to the first floor where the claimant’s business was located, when its rationale for placing the vending machine on the ground floor was to have edible items throughout the airport.

[50] In any event, the court having considered the evidence accepts the defendant’s evidence that the removal of the vending machine was to placate the claimant but did not by itself suggest that it was in breach of any warranty to entitle the claimant to treat its obligations under the MOUs as discharged. The court also accepts that food and beverages are to be made available on both floors in keeping with international airport standards.

Whether the claimant is entitled to the relief sought given that it never executed a lease agreement with the defendant

[51] The defendant argues that in the absence of an executed lease, the claimant’s claim ought to fail as there is no landlord-tenant relationship existent.

[52] The emails to the defendant seeking to enlarge the items described in the MOUs suggest that the terms are not conclusive of the agreement between the parties. The agreement before the court, that is the MOUs and the complaints of the claimant, stem not from the unexecuted lease, but from discussions alleged to have been had between the parties prior to the execution of the MOUs and continuing post the signing of the MOUs. It is obvious that the parties are not ad idem on the final terms of the lease.

[53] The court notes that the claimant is unilaterally seeking to enforce terms not expressed in the MOUs. The court also accepts the defendant’s evidence that it would be unreasonable to restrict sales of food, snacks and beverages only on the top floor as the claimant suggests. It is the claimant’s own evidence of the difficulty to reach the second floor when the lift is dysfunctional or where persons have heavy luggage. The court accepts the defendant’s evidence that a restrictionnot to sell food and beverages on the ground floor would not be in keeping with international airport standards. The MOUs, which form the basis of the contract are silent on the purported exclusivity which the claimant asserts.

[54] The court having heard the evidence and applying the law to the facts finds that the claimant has failed on a balance of probabilities to establish its case for breach of warranty or misrepresentation. It is an expressed term in the MOU that the parties are to enter into a mutually acceptable lease agreement setting forth the term and conditions to govern their landlord and tenant relationship. This will be in keeping with statutory requirements in relation to a lease for the term of years agreed by the parties.

Whether the defendant wrongfully charged the claimant for the provision of air conditioning maintenance

[55] The final issue is whether the defendant wrongfully charged the claimant for the provision of air conditioning maintenance. It is a clear term in the 1st MOU that payment for air condition maintenance be billed separately at the monthly rate of “$240.00 (If unit is provided by the GAA).”

[56] The claimant argues that the defendant provided no air conditioning unit in its rental space but has been billing the claimant for the monthly sum totalling $5,760.00 and continuing. The claimant seeks a reimbursement.

[57] The defendant in its pleadings averred that the claimant benefits from centralised air-conditioning but did not assert that a separate unit was provided as expressed in the MOU. However, the defendant has failed to discharge that burden of proof and accordingly the court finds in favour of the claimant for the reimbursement of the sums paid under this head.

Order
[58] For the forgoing reasons, It is ordered and directed that:

(1) The claimant’s claim for damages and breach of warranty is dismissed.

(2) The claimant’s claim for the payment of $5,760.00 for air conditioning maintenance and continuing at the monthly sum of $240.00 is granted with interest at the rate of 3% per annum from the date of filing the claim until judgment and at rate of 6% per annum from the date of judgment until payment in full.

(3) The parties agreed on costs in the sum of $5,000.00 on the claim. However, the claimant having had partial success on the special damages is accordingly awarded prescribed costs on the total sum to be reimbursed by the defendant pursuant to Part 65.5 Appendix c.

Agnes Actie
High Court Judge
By the Court
Registrar

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