Ferry operators Bertrand and Jennifer Burke of Jenny Tours have been ordered to pay EC$340,386.74 plus interest to the Government of Montserrat for defaulting on several contracts.
In Montserrat High Court the couple argued that when they ran a transport service from Antigua to Montserrat, all the relevant required funds were delivered to officials.
However, they were unable to produce relevant supporting documents during the two-day civil trial and Justice Dale Fitzpatrick concluded they were guilty of the breaches.
The matter went to court on 5 February with Crown counsel Renee Morgan appearing for the attorney general as the claimant, and attorney David Dorsett for the defendants.
In his judgment delivered on 30 April, Fitzpatrick explained that the claimant, the attorney general, is authorised to commence civil proceedings on behalf of the government.
Contract breach
On detailing the case, the acting high court judge said the Burkes had entered into a series of same terms contracts with the government from January 2018 to March 2020 to provide ferry agent services.
The terms included the collection and remittance of passenger and cargo revenue for transport from Antigua to Montserrat, and accounting of all fares and transactions.
The claimant alleged that the Burkes breached their contractual obligations respecting the accounting for, collection and remittance of ferry revenues.
They initially said this resulted in total losses of $304,441.74, but this was revised down to $297,386.74 during closing submissions.
The Burkes denied all allegations of contract breach and related losses to the government.
Hand-written notes
During the trial, the claimant called three witnesses access coordinator Ashley Lindsey, permanent secretary Daphne Cassell and auditor Mary Romilly Murrain Daley.
Lindsey, who was responsible for day-to-day management of ferry operations, told the court the service used an electronic booking system to account for passenger and cargo transport.
It was the responsibility of the Burkes to account for all passengers and cargo by entering information into the system, he said, adding that they had also used hand-written notes.
He said he became aware of discrepancies with the computerised records following a communication from the Montserrat customs comptroller in February, 2020.
The comptroller had inquired about the arrival of ferry passengers who were not accounted for in the manifest.
Lindsey reported this to Cassell, who requested that a rapid audit be undertaken which the access coordinator completed over three months from December 2019 to February 2020.
His testimony was that, based on this audit, the Burkes had failed to remit ferry service revenues owing to the government.
Lindsey submitted his report to Cassell to review and then take whatever measures she deemed appropriate.
Comprehensive audit
On February 26, 2020, the permanent secretary wrote to the Burkes requesting their explanation regarding these discrepancies, and in response, they paid $11,360.
Cassell then contacted the financial secretary to recommended a more comprehensive audit, which the finance ministry’s Internal Audit Unit undertook.
The unit’s new audit report dated 27 October, 2020, identified losses to the government of $304,441.74.
This was broken down as broken down as $126,208.58 in deposits, $33,503.16 in unrecorded cargo revenue, and $156,090 in unrecorded passenger revenue.
Cassell wrote the Burkes a letter dated 6 November, 2020, identifying the amount owed.
Bertrand Burke telephoned her on 30 November to advise that he was working on a response, noting that his records had been water damaged, but no response came.
Compliance weaknesses
Daley, chief internal auditor with the Internal Audit Unit, testified she did not contact the Burkes in connection with the audit, relying instead on documents from multiple sources.
She said the audit revealed “concerns” about the government’s management of the ferry service and, in particular, its dealings with the Burkes.
The auditor detected weakness in monitoring compliance and in taking timely action to sanction and correct deficiencies.
During their testimony, the Burkes said that Bertrand assisted his wife Jennifer with the ferry service operation.
It was mostly Jennifer who handled fare collections, deposits and managed the manifests, they claimed.
A campaign
Bertrand said it was “unfair” for the Internal Audit Unit to carry out an audit without their knowledge, Fitzpatrick wrote in his judgment.
The defendant alleged the audit was a campaign by Cassell to punish the Burkes for Jenny Tours securing the ferry service contract that her relatives had bid on but did not receive.
Jennifer, in her testimony, said much of the cargo transported was done with the understanding that payment would be made by the Montserrat agent, Jemmotte Shipping.
She also said that much of the Jenny Tours business records were lost.
In his conclusion, the judge said: “The claimant has proven on the civil standard that the defendants breached their obligations pursuant to the contracts to account for, collect and remit ferry revenues…”
He ordered the Burkes to pay damages of $297,386.74, plus costs of $43,000 and 4% interest.
