(First of Two Parts)
One of the crown jewels of the world-famous Boracay island has become embroiled in a series of legal problems that began with a court case involving the heirs of the property where it stands, sending jitters down the spine of other foreign investors in the Philippine tourism industry.
Club Panoly Resorts put up one of the first high-end tourism facilities in the island during the administration of then President Cory Aquino after working out a deal to lease the three-hectare property owned by siblings Wenceslao Bito-on, Dionisia Casidsid, Matilde Sacapano, and Javier Bito-on.
During the early part of the first Aquino administration, Boracay was nothing more than an island in Aklan province with a handful of low-end resorts catering to backpackers.
Flights to nearby Caticlan island were few and far between. Its most popular product were the puka shells that could be gathered in one part of the island, and which became a global fad after a handful of Hollywood celebrities were seen wearing puka necklaces and bracelets.
Legend says that the crew of the Hollywood film “Too Late the Hero” were the first foreigners to recognize the potential of the island. Parts of the movie were filmed there, as well as Caticlan. This was in 1970. The film starred Michael Caine, Henry Fonda and Academy Award winner Cliff Robertson.
Presenting himself as a representative of the siblings, Jesus Casidsid met with the legal counsel of Club Panoly to work out a lease agreement. After a year of negotiations, the deal was signed on August 10, 1987.
The agreement, signed during the term of Tourism Secretary Jose Antonio Gonzales, was for a 30-year lease. After the initial period of 10 years, the agreement had an automatic renewal clause for the succeeding two 10-year periods.
For the first 10 years of the agreement, Club Panoly agreed to pay the siblings P67,000 per year, to be distributed equally among the four of them. The amount would be paid every November.
After the end of the first 10 years, the lease would automatically increase every five years thereafter. Thus, from 1997 to 2002, the siblings would receive P73,700 per annum; then P81,070 a year from 2002 to 2007.
At the end of the 20th year, the lease would rise to P98,094 per year for the remaining 10-year period from 2007 to 2017.
All went well for the first 10 years of the lease. In fact, during the construction period, Club Panoly had negotiated with some of the owners and their heirs to lease an additional portion of land owned by the siblings. This parcel was adjacent to the lots originally leased.
Meanwhile, Boracay had become one of the country’s premiere tourism destinations, with other high-end resorts and even a golf course being announced, and construction commencing.
The cool white sands and the pristine waters surrounding the island had earned for Boracay a reputation as one of the best beaches in the world.
At the end of the first 10-year period the legal woes of Club Panoly started.
The company had sent a letter to the owners and heirs informing them that the company was exercising its right to renew the contract of lease for another 20 years.
Instead of agreeing, some of the owners filed a civil case terminating the contract.
The legal action would split the family such that Civil Case No. 98-89150 was filed on Jan. 12, 1997 before the Regional Trial Court of Manila’s branch 13.
The plaintiffs in the case were the heirs of Wenceslao Bito-on Sr. and that of Dionisia Casidsid. Bito-on had seven heirs at the time the case was filed, plus two legal counsels. Casidsid had five heirs, and their own pair of lawyers.
The defendants in the case were Club Panoly, as well as heirs Consoladora Aguirre, Jesus Casidsid, along with Matilde Sacapano and Javier Bito-on, both of whom passed away while the case was pending. Of the two who had died, the former had five heirs while the latter had one.
The owners who filed the lawsuit claimed that the original contract was unenforceable because Jesus Casidsid and Consoladora Aguirre had not been authorized to enter into a legal agreement in behalf of the family.
They also argued that as per their understanding, the contract would only be for 10 years, and not 30. The owners accused Club Panoly of gross misrepresentation of the deal.
The owners also claimed that Club Panoly had overstepped its limits by occupying 33,550 square meters, instead of the agreed 30,000 square meters. They also accused Club Panoly of fencing off the leased premises, thereby depriving them of access to and from their other parcels of land on the Boracay shoreline.
The defendants countered by saying that they had, in fact, informed their relatives of their decision to lease the land to Club Panoly, and that the owners had approved of it, foregoing the usual legal documents.
Then came the clincher.
The defendants also claimed that they did not understand the terms and conditions of the contract because it was written in English.
In so doing, the defendants seemingly agreed with the plaintiffs that there was something amiss in the 30-year agreement.
However, they had also earlier stated that they had actually hired lawyers prior to the signing of the contract.
Testifying for Club Panoly, a certain Attorney Quimpo had categorically stated that he had explained to the family in the local dialect of Aklanon what they were signing. The defendants then consulted with their own lawyer from Kalibo. That lawyer advised them to have some portions of the contract either deleted or changed.
Despite these, the plaintiffs and the defendants would claim that Club Panoly had taken advantage of their ignorance.
Because there was no possibility of a settlement, a trial commenced.
It would take all of a dozen years before the regional trial court issued a ruling in favor of the plaintiffs.
The adverse ruling would only be the beginning of the legal problems of Club Panoly While taking all possible measures to retain control of their resort, Club Panoly would be blindsided by the legal actions of their own employees.
(Next: No court relief for Boracay’s first Triple A luxury resort hotel)