The owner of the Turtle Dove restaurant at the Terrance B. Lettsome International Airport is suing government for more than $4.4 million over a contract dispute that reaches back nearly 14 years.

Glanville Penn, who operated a restaurant and bar in the former airport building from 1975 until its closure in 2002, claims that government breached multiple provisions of a contract he signed to open a restaurant in the current terminal.

Due in part to disagreements with government over who should construct what, Mr. Penn’s business did not get up and running again until November 2005 even though he signed the contract more than three years earlier.

Mr. Penn, 80, is now claiming the government failed to provide promised facilities and reneged on a promise not to allow competing businesses to operate in the terminal building.

Moreover, he was offered just $189,000 in compensation even though a Cabinet-appointed committee recommended that he should receive $4.1 million.

The Crown, however, is challenging many of his allegations. During a trial held last week in Commercial Court, government lawyers and witnesses took issue with the finer points of Mr. Penn’s arguments, contending that he is due far less money than he claims.

Insufficient notice

Among Mr. Penn’s allegations is a claim that he wasn’t given sufficient notice of the closing of the former terminal building.

On March 19, 2002, he received a letter from government stating that he would need to cease operations in the former terminal because it was scheduled to close two days later.

At the trial, Solicitor General Jo-Ann Williams-Roberts, representing the Crown, asked Mr. Penn if he knew the former terminal was shutting down before he received the letter. Mr. Penn acknowledged that he did.

However, Financial Secretary Neil Smith, who was called as a witness by Ms. Williams-Roberts, said government should have provided Mr. Penn with six months of notice, and that he deserved to be compensated to some extent for the shortage.

Construction and bar

Mr. Penn is also alleging that government failed to build all of the necessary facilities for him in a timely manner.

After he won the tender for the new restaurant space in September 2002, Mr. Penn claims, government failed to construct the set-up for a restaurant or bar for him by the start of his contract as promised.

According to Mr. Penn, the contract stipulated that the government would construct the space, and he would “furnish” and “outfit” it.

By the beginning of the contracted period, however, there was no electrical set-up, running water, plumbing or lighting, according tothe testimony of Mr. Penn’s son, David Penn. A restaurant space was eventually constructed by November 2005, but there still is no bar to this day, his fathertestified.

David Penn, reading from the tender document at the trial, said the passenger concession tender space was defined as “passenger catering by way of restaurant, buffet and/or snack bar.” He testified that it was his belief that this included a bar as part of the guarantee.

Justice Gerhard Wallbank, who was overseeing the trial, questioned whether this definition bounded government to provide a bar.

David Penn responded that a bar is the most important component of their airport-based business.

“The bar is the most profitable part of the business, and without it, the said business cannot survive,” he said.

Mr. Wallbank asked whether the business is currently surviving, having never had a bar.

“We are not particularly surviving because of our obligations that are now outstanding, including rent, monies being owed to social security, monies being owed to vendors, employees, etcetera, so we are not surviving,” David Penn responded.

While they can serve certain alcoholic beverages over the counter in their current set-up, without a true bar they miss out on the sale of highly profitable drinks like piña coladas and highballs, he added.

Raised rent

When government did complete a space for the restaurant, government furnished and outfitted it as well, something the Penns never asked them to do, David Penn said.

In the process of completing the outfitting, government unilaterally increased Mr. Penn’s monthly rent from $3,500 to $4,753.33, David Penn testified.

“What we have at the airport is a substandard facility — not what we contracted to put in for the territory,” he said at the trial. “And it has put us in a far more difficult position than it would have otherwise.”

The Crown, however, disagreed with his account.

Crown witness Anthony McMaster, permanent secretary for the Ministry of Communication and Works, testified on behalf of government, explaining that based on his understanding of government contracts,“outfitting” and “construction” mean the same thing. Thus, he contended, it was the Penns’ responsibility to construct their own bar and restaurant.

David Penn countered by testifying that this responsibility was not described in the tender document.

Exclusivity

Glanville Penn is also claiming that government violated his right to exclusivity.

To demonstrate this, his attorney Gerard Farara, QC, read from a letter that Theodore Fahie, then the permanent secretary for the Ministry of Communication and Works, sent Mr. Penn’s lawyers in February 2003.

“Firstly, we are prepared to say that there will be no other restaurant opened within the envelope of the current building,” Mr. Farara read, noting that the 2002 building had the same external footprint as it does today.

He went on to read, “The government must protect itself in the event of large-scale increases in traffic through the airport. The government, therefore, reserves the right to open catering outlets such as coffee shops or snack bars in any extended part of the building.”

However, Mr. Farara explained that this letter had not been honoured.

“The government did allow other coffee shops to open within the existing footprint,” he said.

Mr. Farara also read from a part of the letter promising Mr. Penn’s restaurant exclusive rights to airport passenger cateringfor five years. Both Mr. Farara and Mr. Smith agreed this also did not happen.

Compensation Committee

In April 2011, Cabinet established a compensation committee to recommend the appropriate amount that government should pay Mr. Penn.

Using a financial model created by Roy Jackson, a United States Virgin Islands-based accountant, the committee recommended that government pay Mr. Penn about $4.1 million.

However, Mr. Smith, a member of that committee, disagreed with Mr. Jackson’s methodology: At the trial last week, he explained that he thought Mr. Jackson did not accurately project the amount of airport traffic.

In his capacity as financial secretary, Mr. Smith made a separate recommendation to Cabinet, suggesting that government pay Mr. Penn about $189,000.

Mr. Smith said this compensation took into account the original lack of notice for termination; government’s failure to provide Turtle Dove with a functioning dishwasher; the delay in finalising the space; and the midstream change of rent.

In January 2012, government sent a letter to Mr. Penn with a cheque for $189,000, which Mr. Penn did not accept.

In June 2012, Mr. Penn filed his claim against government.

Technicalities

Much of the trial focussed on the technical aspects of Mr. Jackson’s report, which the Crown contended was not an accurate assessment of how much Mr. Penn was owed.

The trial was held Monday, Tuesday and Wednesday of last week. After hearing arguments from both sides, Mr. Wallbank asked that a written submission of each side’s closing arguments be submitted by Sept. 16. Each side will then get the opportunity to submit a written reply by Sept. 23.

This article originally appeared in the July 28, 2016 edition.