Heron's Flight Inc. (Trading as “Spice Isle Coffee”) v The Airports Authority

• Jurisdiction: Grenada
• Judge: Farara JA
• Judgment Date: 13 March 2025
• Judgment citation (vLex): [2025] ECSC J0313-1
• Year: 2025
• Court: Court of Appeal (Grenada)
• Docket Number: GDAHCVAP2024/0006

Between:

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

Appellant

and

The Airports Authority

Respondent

Before:

The Hon. Mde. Vicki Ann Ellis Justice of Appeal

The Hon. Mr. Trevor M. Ward Justice of Appeal

The Hon. Mr. Gerard St. C Farara Justice of Appeal [Ag.]

GDAHCVAP2024/0006

THE EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Civil Appeal — Appeal against decision of the learned trial judge to dismiss claim for damages for misrepresentation and breach of warranty — Rule 10.5 (3) and (4) of the Eastern Caribbean Supreme Court Civil Procedure Rules (Revised Edition) 2023 — Defendant's duty to set out case — Whether the appellant's pleading of the representation was denied by the defence or is deemed to have been admitted — Misrepresentation — Whether the expressions “food” and “beverage” included or was meant to include all “soft snacks and soft beverages” — Whether the learned trial judge erred in not applying the ordinary dictionary meaning of the words “food” and “beverage” — Evidence Act of Grenada — Admissibility of certain evidence formerly admissible at common law — Whether the learned judge made any finding on the adduced evidence or statements in violation of the rule against hearsay — Memorandum of understanding — Pre-contract representation — Whether the learned trial judge erred in law in deciding that the memorandum of understanding solely formed the basis for the contract without taking account of the alleged misrepresentation

This is an appeal against the judgment of a learned judge of the High Court in the State of Grenada dated 27 ^th February 2024 dismissing the appellant's (the claimant in the court below) claim for damages for breach of warranty and misrepresentation. The appellant's claim is grounded on an oral representation allegedly made by a representative of the respondent prior to and in order to induce the appellant to enter into and sign a memorandum of understanding on 4 ^th May 2026 (“1 ^st MOU”) for the operation of a food and beverage concession (‘Spice Isle Coffee’) located on the second floor of the Maurice Bishop International Airport, St. Georges, Grenada (“the MBI Airport”). The alleged representation as pleaded by the appellant at paragraph 4 of its statement of claim is in the following terms:

‘Before the MOU was signed, and in order to induce [the appellant] to sign the MOU, [the respondent] warranted and represented the following to [the appellant]:

a. That food and beverages would only be sold on the second floor of the airport; and

b. That the main food and beverage vendor currently on the ground floor would be relocated to the second floor and thereafter no food and beverages would be sold on the ground floor;

and which amounted to a continuing representation and/or warranty.’

The appellant's pleaded case was also that in reliance on the representation by the respondent, it prepared and presented its business plan to the respondent for approval and then signed the 1 ^st MOU. It was pleaded specifically, that its ‘forecasted earnings [at the business] were entirely premised on the representation that no food and beverages would be sold on the ground floor but only on the second floor.’ It was also pleaded by the appellant that in accordance with the representation made to it by the respondent, the main food and beverage vendor, Goddard Catering Grenada, was relocated from the ground floor to the second floor of the MBI Airport. On 2 ^nd August 2017, the appellant and the respondent entered into a second memorandum of understanding (“2 ^nd MOU”) by which, inter alia, the area of the proposed rental unit was reduced resulting in a consequential reduction in the stipulated rent, service charge and security deposit, and the intended term of the proposed lease of the rental unit increased from 3 to 5 years. All other terms stipulated in the 1 ^st MOU remained unchanged.

Upon the appellant's entry into occupation of the rental unit on 23 ^rd October 2017, the appellant through its director and representative Ms. Zofia Malisiewicz, noticed that the gift and duty-free shops situated on the ground floor were continuing to sell snacks and soft beverages. This the appellant relied on as constituting a breach by the respondent of warranty by way of the terms of the pleaded representation. The appellant also pleaded that the respondent had placed a cold drink vending machine on the ground floor, which they considered to be in breach of the representation and therefore in breach of the warranty. It was also pleaded that the placing by the respondent of its vending machine on the ground floor had ‘resulted in a reduction of foot traffic to the second floor’ which had a negative effect on the appellant's Coffee Shop business.

During a meeting between the parties on 12 ^th March 2019, the respondent admitted to representing that no food and beverages would be sold on the ground floor of the terminal building at the MBI airport, however, it asserted that ‘its definition of “food” and “beverages” differs from that of [the appellant] in that [the respondent] maintains that it does not include snacks and soft drinks.’

The appellant also pleaded that the representation made by the respondent to induce it to enter into the 1 ^st and 2 ^nd MOUs was false and made fraudulently or recklessly, the respondent not caring whether it was true or false, and as a result the appellant had suffered loss and damage ‘in that the customer footfall on the second floor was severely reduced due to the availability of food and beverages on the ground floor and the [appellant's] projected income severely reduced.’

The respondent denied that the placement of the vending machine on the ground floor of the terminal building was in breach of warranty or representation. It pleaded that the said vending machine had been placed on the ground floor by the respondent in the interest of “customer service” since all food and beverage outlets close by 9:00pm and at times there are scheduled airline departures delayed and an outcry from customers for the availability of snacks and drinks. Further, it was the respondent's defence that the MBI Airport is an international airport which has to operate by international standards, and edible items must be available at various locations at all times throughout the airport. This notwithstanding, the respondent had the vending machine moved to the second floor “to placate the [appellant].”

Regard what transpired at the 12 ^th March 2019 meeting between representatives of both parties and their respective lawyers, the respondent pleaded that it is only at the said meeting, coming some 3 years since the 1 ^st MOU was signed by the parties, that the appellant raised the issue of the interpretation of the expression “Food and Beverage”. They asserted that it was the appellant who was coming into an already established environment at the terminal building ‘who had a duty to clearly identify its requirements to the [respondent’, and put the appellant to strict proof that the respondent ever represented to the claimant that food and beverage, included snacks and soft beverages, would not be sold on the ground floor and that the respondent had undertaken to vary its relationship with the existing tenants on the ground floor (except Goddard Catering Grenada) to facilitate the appellant.

In the court below, the learned judge considered the following issues: (i) whether the respondent had misrepresented to the appellant that food and beverage was only being sold on the second floor; (ii) whether there was a breach of warranty by the respondent by placing a vending machine on the ground floor; (iii) whether the appellant is entitled to the relief sought given that it never executed a lease agreement with the respondent and (iv) whether the respondent had wrongfully charged the appellant for the provision of air conditioning maintenance. By a judgment dated 27 ^th February 2024, the learned judge dismissed the appellant's claim for damages for breach of warranty and representation, found the claim for damages in relation to the charges for the air conditioning proved, and awarded the appellant prescribed costs on the total sum to be reimbursed for the charges for air conditioning maintenance.

Dissatisfied with the decision of the learned judge in the court below the appellant appealed to the judgment by notice of appeal filed on 5 ^th April 2024. The appellant relies on 7 grounds of appeal. It is also asserted (both in the notice of appeal and appellant's skeleton) that the learned judge made certain erroneous findings at paragraphs 38, 41, 44, 53, and 54 of the judgment in coming to her decision in dismissing the claim for damages for breach of warranty and misrepresentation.

Held: dismissing the appeal, affirming the judgment and decision of the learned trial judge dismissing the appellant's claim for damages for misrepresentation and breach of warranty, with costs to the respondent to be assessed by a judge of the High Court or Master, if not agreed by the parties within 21 days of the date of delivery of this judgment, that:

• 1. Rule 10.5(3) and (4) of the Civil Procedures Rules 2000 (“CPR”) does not mandate the use by a defendant of the word “denial” in the defence when denying a matter pleaded in a claimant's statement of claim, nor is it stipulated that if not used the defendant would be deemed to have admitted an allegation of fact pleaded in the statement of claim. Moreover, CPR 10.5 does not provide any consequence for a failure or shortcoming in how an allegation in the statement of claim is responded to or denied in the defence. The gravamen and meaning of these provisions is that in the defence, if an allegation is not admitted, it must, by the language used, be clearly denied or the claimant put to strict proof of it. As to the requirement at r.10.5(4) that if there is a denial the defendant must state the reasons for doing...