The dispute saw the current tenants Belmiro de Freitas and Manuela Walter granted a three-year stay of eviction in September, allowing them to remain at the cafe until the end of the 2028 summer season.
However Policy & Resources then said it would try to recover its costs, having run up a bill with a local law firm over the saga which was known to be well in excess of £100,000.
Whether any of the States’ costs, which are ultimately borne by the taxpayer, have been recovered is unknown, as P&R has said the terms of the agreement will remain confidential, as is standard practice.
‘This agreement brings the remaining legal proceedings to a close in a way that is pragmatic in the circumstances,’ said P&R president Lindsay de Sausmarez.
‘Avoiding any further costs associated with another court hearing is clearly in everyone’s best interests and allows the tenants to focus on the continued operation of the cafe until 2028.
‘While the terms are understandably confidential, we are pleased to have this amicable resolution with Belmiro and Manuela and wish them well over the coming seasons.’
Deputy de Sausmarez said the agreement brought the matter to an end and means that a court hearing to determine any costs awarded will no longer be necessary, avoiding any further costs for either party associated with legal proceedings. A hearing scheduled for 12 January was cancelled at the last minute, which seemed to indicate that both sides were pursuing a agreement out of court.
The announcement draws a line under the dispute which started nearly two years ago when the lease for the cafe was put out to tender, with promotional material suggesting it could be redeveloped into a three-storey building.
The tenancy process was criticised as Mr de Freitas and Ms Walter had run the cafe for more than 20 years and it had been widely recognised as one of the island’s favourite beachside kiosks. A petition asking that they be allowed to stay was signed by nearly 3,000 people.
The lease was eventually awarded to another operator, Pearl Oyster, which operates St Peter Port cafes Lola and Coco.
However Mr de Freitas and Ms Walter refused to move out and have continued to trade at the kiosk ever since.
The States Property Unit started eviction proceedings at the beginning of 2025 but in September last year the Royal Court granted them a three-year stay of eviction.
At that time, P&R said it would try to recover its legal costs from the tenants. It was estimated that those costs could double if court action was continued.
Deputy de Sausmarez appeared to open the door to a more amicable outcome in November when she told a Scrutiny hearing that her committee would have taken a less bullish approach had it been in office when eviction proceedings were launched in 2024.
Mr de Freitas and Ms Walter, who did not wish to comment on the deal yesterday, will now continue to operate the cafe until the end of October 2028. They are due to reopen for the summer this weekend.
The States has confirmed that Pearl Oyster still intend to take over the tenancy of the cafe after this date.
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