before the court for its determination in the claimants...

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THE REPUBLIC OF TRINIDAD AND TOBAGO

IN THE HIGH COURT OF JUSTICE

Claim No. CV2013-04806

Between

WATTS ELECTRICAL CONTRACTORS COMPANY LIMITED

Claimant

AND

THE STAR HOTEL LIMITED

Defendant

Before The Honourable Mr. Justice Frank Seepersad

Appearances:

1. Mr. R. Rajcoomar and J. Rajcoomar, instructed by Alisa Khan for the Claimant

2. Mr. N. Ramnanan for the Defendant

Date of delivery: 4th July, 2016

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DECISION

1. Before the Court for its determination is the claim and counterclaim advanced by the

Claimant and the Defendant respectively.

2. By its claim form filed 22nd January 2013, the Claimant sought the following reliefs:

i. Payment due for works done in the sum of $1,123,333.58;

ii. Damages for breach of contract;

iii. Interest at the rate of .75% per month pursuant to Part 11.8 of the Appendix to the

Agreement and Section 25 of the Supreme Court of Judicature Act chap. 4:01;

iv. Costs;

v. Such further and/or other relief as the Honourable Court may deem fit.

3. By its Amended Defence and Counterclaim the Defendant sought the following reliefs:

i. Damages for breach of contract to be assessed based on the total cost of

completion less the contractually agreed sum.

ii. Liquidated damages for delay occasioned by the Claimant’s breach to be assessed

and/or alternatively in the sum of $450,000.00

iii. Damages to be assessed for defective works.

iv. Repayment of advance payment mobilization in the sum of $240,000.00

v. Interest pursuant to section 25 of the Supreme Court of Judicature Act Chap. 4:01

vi. Costs

vii. Such further and/or other relief as the Court deem just in the circumstances.

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Factual background

a. The Parties entered into a contract for the execution of the Works set out in the

invitation to tender on or around 26th July, 2007.

b. The Parties thereafter executed a contract, which incorporated the FIDIC Short

Form of Contract.

c. The cost of works was $7,000,000.00 exclusive of VAT, however, with respect to

the valuation of works, the contract provided for the re-measurement of the works

with tender bill of quantities.

d. The time for completion was stated as being 12 months.

e. Shortly thereafter, on or around 26th July 2007, the Claimant commenced

execution of the Works.

f. The Works continued beyond the contractual period for completion and well into

2009.

g. The Claimant contended that certain sums were expended by it in performing the

Works beyond the contractual period and these sums were referred to as

preliminaries. There is a dispute between the parties as to whether these

payments were to be borne by the Claimant or by the Defendant.

h. During the period of execution of the Works, the Claimant submitted seven

Valuations to Defendant’s Project Manager. These seven Valuations of the Works

were paid after they were reviewed by the Defendant’s Mechanical and Electrical

Consultant Engineer and the Defendant’s Quantity Surveyor.

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i. On or around 30th July, 2009, the Claimant submitted Valuation No. 8 which was

certified by the Defendant’s Quantity Surveyor in the sum of $94,997.22. The

Defendant paid $80,000.00 of this certified sum and the balance of $14,997.22

was never paid to the Claimant.

j. The Claimant further submitted a claim for $223,563.76 + VAT for the

preliminaries on or about 27th October, 2009 and contended that these

Preliminaries represented expenses which were incurred by it in executing the

Works beyond July, 2008.

k. On or around 28th October, 2009, the Claimant submitted Valuation No. 9 and the

sum of $617,500.00 was certified by the Defendant’s Quantity Surveyor; but this

sum was not paid by the Defendant.

l. By letter dated 6th November, 2009, the Claimant wrote to the Defendant and

indicated inter alia that the Claimant intended to stop their employees from

reporting to work from 9th November, 2009 due to nonpayment of the outstanding

valuations.

m. The Claimant subsequently ceased Works and there is a dispute as to the date that

the works were stopped.

n. On or around 23rd December, 2009, another electrical contractor, R2K

Engineering Ltd, was retained to continue the Works.

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o. The Defendant subsequently hired a firm to measure the Works, which had

already been certified by its former Quantity Surveyor.

p. Based on this valuation, the Defendant has claimed that it overpaid the Claimant

for the Works performed up to the stoppage of the Works.

4. The Claimant’s claim therefore relates to:

i. Payment of Valuations 8 and 9;

ii. Payment of the retention withheld by the Defendant;

iii. Payment of expenses incurred in carrying out the works beyond the 1-year

contractual period (“the Preliminaries”) due to the delay in completion being

attributable to the Defendant; and

iv. Loss of Profits on the balance of the contract.

5. The Defendant contends that it is not liable to pay the preliminaries because the delay in

completion was attributable to the Claimant and that it was not liable to pay Valuations 8

and 9 on the ground that these valuations were rubberstamped and it had in fact overpaid

the Claimant. The Defendant’s counterclaim is for the cost incurred for the completion

of the works after the Claimant wrongfully terminated the contract and for the cost

associated with the repairing of defective works that was allegedly executed by the

Claimant, as well as for the sums allegedly overpaid.

6. The issues that fell to be determined by the Court were as follows:

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i. What was the cause for the delay that resulted in the time for the completion of

the works extending beyond the one-year period fixed under the contract;

ii. Whether multiple variations and additions to the Works were requested by the

Defendant;

iii. Whether Valuations 8 and 9 were rubberstamped as alleged;

iv. Whether the Claimant abandoned the Works on 9th November, 2009 and

demobilized thereafter as alleged by the Defendant or whether the Claimant

continued working until mid-December, 2009 and whether the service of the

Claimant was effectively terminated when the Defendant hired R2K Engineering;

v. Whether the alleged additional expenditure by the Defendant on electrical works

was spent on completing the original scope of works that was required to be

performed by the Claimant and/or on remedying the defects in the Claimant’s

work.

The Law

7. The Court had to consider inter alia the law as it relates to the following areas:

i. The manner in which the contract between the parties had to be construed.

ii. The law in relation to Breach of Contract with respect to non-payment, Retention

Money, Variations, Preliminaries.

iii. The issue of Limitation.

The Law in relation to the Construction of Contracts

8. In Civil Appeal 214 of 2009 S & D Construction Limited v Caribbean Insulation

Services Limited CV No. 2007/00303, Moosai J, (as he then was) in the context of a

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lease agreement, considered the rights and reliefs that were available to the parties by

considering the principles hereinafter laid out:

“47. In construing a contract, the instrument must speak for itself, but the

words used must be understood to bear the meaning which they would

convey to a reasonable person having all the background knowledge

which would reasonably have been available to the parties in the

situation in which they were at the time of the contract.23 It is this

objective meaning which is referred to as the intention of the parties. In

the most recent decision emanating from the UK Supreme Court, Arnold

v Britton, [2015] UKSC 36 Lord Neuberger provided the following

guidance on the interpretation of contractual provisions:

“[14] Over the past 45 years, the House of Lords and Supreme Court

have discussed the correct approach to be adopted to the

interpretation, or construction, of contracts in a number of cases

starting with Prenn v Simmonds [1971] 3 All ER 237, [1971] 1

WLR 1381 and culminating in Rainy Sky SA v Kookmin Bank

[2011] UKSC 50, [2012] 1 All ER 1137, [2011] 1 WLR 2900.

[15] When interpreting a written contract, the court is concerned to

identify the intention of the parties by reference to “what a

reasonable person having all the background knowledge which

would have been available to the parties would have understood

them to be using the language in the contract to mean”, to quote

Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd [2009]

UKHL 38, [2009] 1 AC 1101, para 14, [2009] 4 All ER 677. And it

does so by focussing on the meaning of the relevant words, in this

case cl 3(2) of each of the 25 leases, in their documentary, factual

and commercial context. That meaning has to be assessed in the

light of:

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(i) the natural and ordinary meaning of the clause,

(ii) any other relevant provisions of the lease,

(iii) the overall purpose of the clause and the lease,

(iv) the facts and circumstances known or assumed by the parties at the

time that the document was executed, and

(v) commercial common sense, but

(vi) disregarding subjective evidence of any party’s intentions.”

9. The Court should, therefore, when tasked with the responsibility of ascertaining the

contractual intent of the parties, apply an objective test and address its mind as to what a

reasonable person, duly informed with the requisite background knowledge, would have

understood the contractual language to mean. Consequently, the subjective interpretation

of provisions in the contract by the parties should not guide the Court in its determination

as to the contractual intent.

Breach of contract

10. In CJ Elvin Building Services v Noble and Noble [2003] EWHC 837 (TCC), the

Claimant, a contractor, commenced proceedings against the Defendants after the

Defendants stopped payments during the course of the execution of the Works. The

issues in dispute were the value of the works carried out and completed, the employer’s

allegation of defective work, and the occurrence of an accepted repudiation by the

Claimant in stopping the works on account of nonpayment. The Court held:

“90. Although it is not alleged by the Claimant that the Defendants

repudiated the contract let alone that the Claimant accepted any such

repudiation, it is my view that the Defendants were in repudiatory

breach of the contract. They were in breach of what to the Claimant

was a most important term of the contract, namely that reasonable sums

due should be paid at reasonable intervals. Not only were the

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Defendants in breach of contract by late October 2001 for not paying,

they were threatening (in breach of contract) not to pay any further

sums until the works were completed. Although the Claimant was

financially able to complete the works, it is undoubtedly the case that the

Claimant’s suspension was brought about directly as a result of the

Defendants’ breach of contract in failing to pay. In those

circumstances, the Claimant was entitled to suspend the work. It

certainly cannot be said that the suspension triggered as it was by the

Defendants’ own breach was itself repudiatory. The Defendants cannot

rely upon its own breach to justify a contention that the Claimant was

itself in repudiatory breach.

91. Reliance has been placed by the Defendants on an unreported case,

D.R. Bradley (Cable Jointing) Ltd v. Jefco Mechanical Services Ltd

(1998), referred to in the footnote in Chitty on Contracts, 28th Edition,

para. 37-199. I have been unable to find or obtain a copy of this case. I

am not convinced that the learned editors’ statement in the book (“non-

payment by the employer is not generally a breach which will entitle the

contractor to treat the contract as at an end”) is correct or, at least,

unconditionally correct. Failure or refusal to pay sums due under a

building contract can amount and often does amount to repudiatory

conduct on the part of the employer. This will obviously depend upon

the terms of any construction contract. Many construction contracts

have termination clauses which, invariably, permit the Contractor to

terminate under the provisions of the contract on the grounds of non-

payment by the Employer. The obligation to pay on the part of the

construction contract employer is one of the most important

obligations which the Employer has. A refusal to honour payment

obligations, at least insofar as it relates to a relatively sizeable

sum of money due or the threat not to pay further sums due in

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accordance with the contract must be capable of being

repudiatory….”

11. In Hudson’s Building and Engineering Contracts 12th Ed at paragraph 8-017 it is

stated that:

“Mere breach of a payment obligation does not constitute a common law

repudiation. Principles to consider whether the circumstances of the

nonpayment show an intention not to be bound: “the principle to be

applied in these cases is whether the non-delivery or the non-payment

amounts to an abandonment of the contract or refusal to perform it on

the part of the person making the default…”

Retention sums

12. The nature of retention money is explained by the authors of Emden’s Construction

Law as follows:

“6.135 Express terms usually provide for the employer to retain a

percentage of interim valuations, as security for the due performance of

the contractor's obligations. Commonly, one half of the retention is

released at practical completion and the remainder at the end of the

defects liability period.”

Variations

13. Hudson’s Building and Engineering Contracts 12th Edition at paragraph 5-027

states the position in relation to variations in the following terms:

“Differences between as built quantities and those stated in bills … frequently

come about without any alteration in the work being called for by the…

Employer because of errors in taking off (sic) quantities from the drawings

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first this all because of unpredictable or because of the inherently

unpredictable or provisional extent of the particular work in question. “

14. In relation to additional works, in a re-measurement contract, the extract from Hudson’s

further states that:

“The difference between a lump sum contract and a measured contract in this

situation lies in the fact that, in the former case, both parties carry the risk of

these types’ differences and the price will not alter, whereas in the latter the

contract sum will be adjusted, up or down, to take account of the differences.”

15. In Emden’s Construction Law at paragraph 8, the author cited the decision of Patman

and Fotheringham Ltd v Pilditch (1904) 2 Hudson's BC (4th edition) 368 where the

following proposition was stated:

“8.60 The bills of quantities may be incorporated into the contract so as to

operate as part of the contractual definition of the work to be carried

out. In such a case, the contractor is entitled to additional payment if the

work is more extensive than described in the bills. Thus where the

contract specified that work was to be done for a lump sum 'according to

the plans, invitation to tender, specification and bills of quantities', it

was held that the effect of these words was to incorporate the terms of

the bills as part of the contract. Accordingly the contractor was entitled

to extra payment when he had to do more work than that mentioned in

the bills.”

16. The Court of Appeal of England and Wales has reaffirmed the principle in the decision of

Globe Motors Inc. v TRW Lucas [2016] EWCA Civ. 396 and held that a contract

containing no oral variation clause can still be varied orally. The Court stated at

paragraphs (104 & 107) as follows:

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“[104] In the World Online Telecom case the appeal was against the refusal of

Mitting J to give summary judgment to World Online Telecom.

Dismissing the appeal, Sedley LJ stated (at [11] – [12]) that the question

whether parties could override a clause in an agreement in writing

excluding any unwritten variations of the contract was, as a matter of

English law, sufficiently unsettled to be unsuitable for summary

determination, and that the successful respondent's skeleton argument

deployed textbook and judicial support for a flexible approach. He also

stated (at [10]) that “[i]n a case like the present the parties have made

their own law by contracting, and can in principle unmake or remake

it”. Mr. Downes noted that the United Bank case was not referred to.

The World Online Telecom case is nevertheless positive support for the

effectiveness of an oral variation or one by conduct despite such a

clause, and with fuller reasoning than that in the United Bank case.

Moreover, as a result of the Court of Appeal's decision in the World

Online Telecom case there was a trial in the Commercial Court. At the

conclusion of that trial, Steel J held that, notwithstanding the clause, the

conditions in the contract in that case had been varied by the oral

agreement:

[107] There are, moreover, other decisions which support the approach taken

by Sedley LJ in the World Online Telecom case and favoured by Gloster

LJ and Stuart-Smith J in Energy Venture and Virulite. For example, in

Liebe v Molloy (1906) 4 CLR 347 the High Court of Australia

considered a building contract containing a clause that extra items

should not be paid for unless ordered in writing. Griffith CJ, delivering

the judgment of the Court, stated (at 354) that notwithstanding the

clause, the conduct of the parties may mean that an implied contract to

pay for the extra items is to be inferred. This is a question of fact. Thus,

an oral agreement or the conduct of the parties to a contract containing

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such a clause may give rise to a separate and independent contract

which, in substance, has the effect of varying the written contract.”

Preliminaries

17. Hudson’s (supra) states at paragraph 6-075:

“Site or other job related overheads include the nonproductive costs which

a contractor will view as necessary expenditure to carry out the works.

These costs will include such items as supervision and on-site

accommodation and will include elements of plant such as craneage and

transport. It is obvious that, if these costs are time– related, any delay to

the project will be likely to increase the costs to the contractor of

undertaking the work and should be reimbursed to the extent that the

employer has caused the overall delay to the project.”

Limitation period

18. A limitation defence has to be pleaded and in this jurisdiction the Limitations of

Certain Actions Act Chapter 7:09, section 3(1)(a) provides that a claim founded

in contract should be proceeded with within four years from the date of the accrual

of the cause of action. The legislation provides that where a Defendant has

acknowledged the existence of the debt, the limitation period can be calculated from

the date of such an acknowledgement.

19. In Langrish v. Watts (1903) 1KB at pages 640-641 the English Court of Appeal

stated as follows:

“But the learned judge proceeded to deal with the case from another point of

view. He was of opinion that the effect of the correspondence was that there

was an invitation by the defendant to the plaintiff to have the account gone

into between them, and a promise by the defendant to pay what, on that being

done, might prove to be the amount due from him. That is an invitation

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which a man may give, and a promise which he may make, although he may

previously in the correspondence have denied his indebtedness to the amount

claimed, and have suggested that certain specific payments have been made

by him on account of the original debt. The effect of the correspondence as a

whole may, notwithstanding those statements, be that he makes a fresh

promise, if an account be taken, to pay what is found to be due from him on

that account. This case appears to me to be on the border line, but I am not

prepared to say that the construction so put by Bruce J. upon the Defendant's

letters was wrong. The cases of Prance v. Sympson (1), Sidwell v. Mason (2),

and Skeet v. Lindsay (3) are ample authority to shew that such a promise,

that is to say a promise to pay the balance which may be ascertained to be

due in respect of the original debt upon an account being taken, is a

sufficient promise to take a case out of the Statute of Limitations.”

Analysis of the evidence in relation to the issues to be determined

20. In his witness statement, Phillip Watts, on behalf of the Claimant, at paragraph 15,

stated as follows:

a. “The final layout drawing and all plans for the electrical layout for the

rooms of the building were never provided.

b. Constantly and without warning unilaterally changing the requirements

for electrical installations for example by changing the location of plug

outlets and lighting fixtures.

c. Did not provide the electrical final layout plan and outlay in relation to

the proposed architectural layout.

d. Varying and adding to the electrical installation set out in the original

contract which resulted in an increase in the total loading by adding more

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plugs, lights in hotel rooms and I did more rooms of the hotel including

four Penthouse suites.

e. Did not supply working drawings for the new lighting layouts.

f. Failed to commence block work on the first and second floors of the hotel.

By the end of 2008, local work on the first and second floors of the hotel

was not yet been completed (sic). This block work was already completed

in 2009.

g. Failing to pay several of the subcontractors, which led to the withdrawal

of the said subcontractors for non-payment of fees resulting in a decrease

of productivity of the civil works and delays. These subcontractors would

Josh Dhanesar, Belmar Construction Limited on a contract (sic) only

known to me as Bobby. These contractors eventually abandoned the job.”

21. In opposition to the contentions advanced by Mr. Watts, Mr. Ricardo Nanan, at

paragraph 44 of his witness statement, stated that the delay was wholly attributable

to the Claimant and he stated that:

a) “We duly provided or required plans and schematics prior to

commencement of the works.

b) There were no changes/additions/variations to the electrical insulation

as set out in the original contract in any event the variation procedure

pursuant to the contractor is not invoked.

c) There was never any new lighting layout as alleged by the claimant.

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d) The block work was substantially completed of the material time and

whatever was incomplete could not materially affect the progress of the

works. In fact at the time the claimant had not even completed works on

the ground floor and outside the building which could not have been

affected by any alleged failure to complete block work.

e) At all material times works were being done on the site by the

respective contractors.

f) There were no variations requested as alleged and as stated above the

variation procedure pursuant to the contract was not followed.”

22. During the course of the trial, the Court permitted Mr. Watts to amplify matters which were

set out in his witness statement, and he further stated that:

a. Initially the hotel was to have 3 floors, a ground and 2 levels above.

b. When the Claimant entered onto the site to commence the hotel was at the

foundation stages.

c. The electrical works are dependent on the civil works and unless the civil

works are completed, the electrical works could not be 100% completed.

d. The process for installation involved placing floor conduits in the foundation

and in the walls followed by 2nd fix involving sub circuit wiring and finally a

3rd fix which involved installation of plugs, lights and switches.

e. The electrical fixtures installed were taken on credit from other suppliers.

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f. After the 1 year contractual period had expired, the floor slab for the 1st floor

was still being installed and the block work on the ground floor was still

ongoing.

g. The additional works the Defendant requested went beyond the initial scope of

works and included:

i. The installation of lights on the perimeter wall.

ii. The addition of rooms to the ground floor, the first floor, as well as

penthouses, which had to be wired.

iii. Electrical to a guard booth and traffic bar.

v. Work in the kitchen and bar area for which no designs were initially

submitted.

h. The Claimant stated that these additions to the works were requested by

Ricardo Nanan, Patricia Nanan and then Project Manager Ashmeed Piralli.

23. During cross examination, the witness also stated that:

i. At the time the initial contractual period had expired, Mrs. Nanan met with him

and asked him to continue working and that he agreed to continue working based

on assurances advanced by the Defendant that expenses incurred due to the

extension of work beyond the 1 year period would be paid; and

ii. Prior to the undertaking of the additional works, he provided quotations and the

Defendant agreed to them.

24. During the course of his cross examination, Mr. Nanan, on behalf of the Defendant,

maintained that there were never any variations to the original scope of works and he insisted

that no delays were occasioned by the Defendant. The witness did admit that there were

problems with other contractors and he accepted that R2K Engineering was hired to complete

the work that should have been done by the Claimant. The witness accepted that, in

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accordance with the contract, delays occasioned by the owner which resulted in the inability

of the contractor to complete the contracted works within the agreed contractual period,

would lead to a circumstance where the owner would be liable to pay for the contractor’s

expenses.

25. Mr. Nanan testified that the block work was substantially completed in July, 2008 and he

accepted that he had requested a quote for a Vincard system but said that the Claimant

abandoned the job before the system was implemented. He also accepted that a request had

been made to change the types of switches that had to be installed.

26. In response to questions posed by the Court, Mr. Nanan admitted that the 2nd floor of the

structure was still incomplete and that the public had no access to same. He also accepted

that under the contract the Claimant had to engage in works on the said 2nd floor. Mr. Nanan

also accepted that the initial period for construction of the hotel was one year but as at the

date of his evidence, some nine years after work had commenced, the hotel was still not

complete.

27. He admitted that there had been a request for a change in the types of switches which were

being installed and accepted that valuations 1-7 were paid in full and agreed that they were

paid without protest The witness was shown a letter from the Quantity Surveyor, Willi

Roopchand, dated 14th September, 2009 which stated that Valuation 8 was primarily for

variation works and he accepted that this valuation was paid almost in full and without any

queries as to the matters of variation claimed.

28. The Court considered the evidence adduced by Mr. Tasram Maharaj who was the

representative of Mechanical and Electrical Engineers Limited, which was the company that

was retained by the Defendant to design the electrical system and to oversee the installation.

29. This witness testified that the project had ‘evolved’ and accepted that there were changes to

the original design. A major change, according to the witness, was the addition of the wings

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to the lower floor and he also testified that there were changes to the architectural layouts.

Mr. Maharaj confirmed that additional rooms were built and the Claimant was requested to

work on same and that these additional works were valued by using the agreed tender rates

as contained in the original tender.

30. Mr. Maharaj further testified that he played a reduced role in the project after December,

2009 and that there were design changes to the electrical system after Mr. Watts left the

project.

31. In response to questions posed by the Court, Mr. Maharaj testified that block works were

still ongoing as at January, 2010.

32. The Court found Mr. Maharaj to be an extremely helpful witness; his responses were

forthright and he engendered in the Court the feeling that he was a witness of truth. The

Court was acutely aware that it had before it two diametrically opposed versions as

advanced by Mr. Watts and Mr. Nanan and therefore tested the veracity of their evidence as

against the objective evidence adduced by Mr. Maharaj. The Court then considered all the

evidence before it with a view of determining which version was more probable in the

circumstances. Having engaged this exercise, the Court found that it was inherently

improbable that the block work was completed within the time period as advanced by Mr.

Nanan, given that the 2nd floor of the hotel is still incomplete.

33. The Court found as a fact that there was substantial delay in the construction of the hotel

which was attributed to the Defendant and this resulted in the Claimant’s inability to

complete the contracted works within the one year period stipulated under the contract. The

Court also found that there were multiple variations and additions to the scope of work that

had to be undertaken by the Claimant and the Claimant had to inter alia do electrical work

upon the additional rooms that were constructed. Although variations were effected, they

were not reduced into writing but the Claimant undertook them. The contract did not

expressly state that as condition precedent variations had to be reduced into writing. The

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Court found that the position in relation to the variations advanced by the Claimant was

inherently more probable than the position advanced by the Defendant and noted that the

Defendant did in fact pay a substantial part of the valuation No. 8 which dealt primarily with

variation works.

34. On the facts, therefore, the Court found that after the expiration of the one year contract

period, the Claimant continued working based on verbal requests and assurances advanced

by the Defendant and the Claimant executed additional works as requested by the

Defendant.

35. The Court considered the contract and examined the clauses that dealt with payments and

applied the principles laid down in S& D Construction (supra) to assist in its formulation

as to the contractual intent. Having embarked on this exercise, the Court found that a

proper construction of clause 11.3, provided that:

a. The Claimant was entitled to be paid interim payments on Works measured by the

Claimant and re-measured by the Defendant’s agents.

b. Where the Defendant intended to pay less than the sum claimed by the Claimant

in an interim valuation, it was required to provide reasons for paying less.

c. The sum due, less any amount not certified by the Employer’s agents had to be

paid within 28 days of submission of the interim bill.

d. The provision did not enable the Defendant to refuse to make interim payments

indefinitely.

e. The Court also found that the sentence ‘The Employer shall not be bound by

any sum previously considered by him to be due to the contractor” was

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inserted so as to specifically avoid the argument that the Employer having paid

the sums was thereafter debarred from disputing the quantum so paid.

36. The main reason advanced by the Defendant for the nonpayment in relation to valuations 8

and 9 was that the same was merely rubberstamped by Mr. Willi Roopchand and the

Defendant’s case was that the sums contained therein were not truly reflective of the value

of the works undertaken by the Claimant.

37. Mr. Tasram Maharaj testified as to the process that governed the valuation of works and he

stated that the Claimant would first submit a claim for works that was completed. Secondly

the work would be visually inspected so as to determine whether there was compliance with

the designs and the company, Mechanical and Electrical Engineering Limited, would

thereafter prepare a valuation. This valuation would then be forwarded to the quantity

surveyor who would prepare payment certificates for onward submission to the Defendant.

38. Mr. Maharaj was asked to explain Valuations 8 and 9, and he stated that the tender sum

column contained the estimate from the tender and the valuation sum contained the estimate

based on the inspection of the works completed. He testified that if these figures matched

the particular item of the works was completed. If however the valuation sum was less, it

meant that the works for that particular item were not duly completed. Mr. Maharaj also

indicated that if items were brought on site but were not installed, the Employer would be

liable of the cost of the said items.

39. In cross examination it was put to the witness that he had wholly accepted the Claimants

claims without assessing them and he responded by saying:

“We can’t do that. Remember we have our professional liabilities and all of

these things… We will always visit the site once a claim is there. We will

not just accept the claims as they are. We would go through the claims by

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inspection on the site to ensure and to certify that these claims are actually

correct.”

40. During the cross examination of Mr. Nanan, Counsel for the Claimant was able to establish

that both Valuations 8 and 9 were substantially reduced when Mr. Roopchand generated the

certificates after Mr. Maharaj had conducted inspections. Valuation 8 was initially for

$176,702.58 but the certificate was for $94,997.22. Valuation 9 was initially for

$617,500.00 but the certificate was for $580, 392.14.

41. Having considered the evidence, the Court found that the Defendant’s contention of “rubber

stamping” in relation to Valuations 8 and 9 was unfounded and devoid of merit.

42. On the evidence, there was no dispute that a balance remained unpaid under Valuation

8 and sums owed under Valuation 9, as well as request for preliminaries were also not

paid by the Defendant. In cross examination, Mr. Nanan was taken to clause 11.3

initialed Interim payments which provided:

“11.3 Within 28 days of delivery of each statement, the employer shall pay to

the contractor the amount shown in the contractor statement last

retention and the rate stated in the appendix, and less any amount for

which the employer has specified his reasons for disagreement. The

employer shall not be bound by any sum previously considered by him to

be due to the claimant.”

43. Mr. Nanan accepted that nothing within the clause entitled the Defendant to withhold

payment indefinitely or at all, other than in respect of specific items for which reasons for

the disagreement had been given. The witness also accepted that no such reasons were

ever advanced to the Claimant.

44. Mr. Nanan was also referred to clause 15.1. This clause outlined the contractual procedure

for the determination of disputes. Disputes in relations to valuations had to be referred to

an independent adjudicator and the process required the participation by both parties and

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could not be undertaken simultaneously with the execution of works and the decision of the

adjudicator would settle any such dispute. The contract provided that the adjudicator

should be jointly appointed and should have the requisite expertise to adjudicate on the

matter. Mr. Nanan accepted that the issue re the said valuations had not been referred to an

independent adjudicator in or around August, 2009 when Valuation 8 was payable but he

suggested that the subsequent appointment of Mr. Cannutte Edd Spencer was done so as to

comply with Clause 15.1.

45. In relation to the series of events that unfolded prior to the hiring of R2K, the Claimant’s

evidence was as follows:

a. By its letter dated 6th November, 2009, it threatened to suspend works on 9th

November, 2009. However, it did not suspend works on 9th November, 2009, having

engaged in discussions with the Defendant.

b. Work continued on the site until the middle of December, 2009, when all works on

the project stopped for Christmas.

c. On 4th January, 2010, Mr. Watts returned to the site with the intention of continuing

the work, provided that payment of the outstanding amounts was made and at a

meeting with Mr. Piralli and Mrs. Nanan, he was advised that the he would not be

paid the outstanding sums.

d. Mr. Watts subsequently learnt from 3rd parties that a contractor R2K Engineering had

been hired to complete the contract.

46. On this issue, the Defendant’s evidence was that:

a. The Claimant ceased working on 9th November, 2009 and removed its container and

demobilized from the site after 26th November, 2009.

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47. In relation to the removal of the container in November 2009, Mr. Watts testified that the

container was removed not as an act of demobilization but to effect repairs to same. He said

that the contents of the container were removed and stored in a room at the Defendant’s

hotel under the supervision of the project manager.

48. Clause 12.1 of the contract provided as follows:

“12.1 If the contractor abandons the works, refuses or fails to comply

with an instruction of the employer, or fails to proceed expeditiously and

without delay, despite a written complaint, in breach of the contract, the

employer may give notice referring to this sub clause and stating the

default.

If the contractor has not taken all practicable steps to remedy the default

within 14 days after the contractor’s receipt of the employer’s notice, the

employer may by a second notice be given within a further 21 days,

terminate the contract …”

49. If therefore, the Claimant had abandoned the job as advanced by the Defendant, the

procedure mentioned at Clause 12.1 should have been engaged and there is no evidence

before this Court to establish that the Defendant followed the procedure so outlined under

Clause 12.1

50. The Court considered the expert report of Mr. Cannutte Edd Spencer and noted that the

Report stated that:

“The client has indicated that the contractor, as of the 18th December,

2009, has not returned to the site to further progress his

works/obligations under the contract.”

51. In cross examination, Mr. Cannutte Edd Spencer confirmed that his instructions from the

Defendant was that Mr. Watts had stopped work on 18th December, 2009.

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52. The Defendant also placed before the Court log attendance records and these were tendered

as a court exhibit. There was no evidence as to who recorded the logs and no logs for the

period 11th November, 2009 to 7th January, 2010 were produced. The Court therefore found

that the logs provided no assistance in its determination of the issue as to when the Claimant

actually stopped working.

53. The Court noted that on the Defendant’s case there was a conflict as to whether the Claimant

stopped work on the 18th December, 2009 or in November 2009. Having reviewed all the

evidence, the Court found that the more plausible and probable position was the position

advanced by the Claimant and the Court therefore found as a fact that the Claimant

continued to work until all the works were stopped for Christmas and when Mr. Watts

returned to the site on the 4th January 2010 he met with Mr. Piralli and Mr. Nanan and was

subsequently informed that R2K had been hired.

54. Mr. Spencer was retained by the Defendant to measure the work done as at the 18th

December, 2009. Mr. Spencer stated that the Defendant instructed him and that he did not

have the previous measurements made by Mr. Maharaj. Mr. Nanan testified that he had

invited Mr. Watts via telephone to participate in the re-measurement exercise by Mr.

Spencer but that Mr. Watts declined to do so. Mr. Spencer’s report however stated that ‘all

attempts to contact the contractor were futile’. In cross examination the witness stated that

his statements were made based on information that he had received from the Defendant.

55. The Court, in the circumstances, found that the Claimant was not involved in the re-

measurement exercise and therefore the procedure adopted by the Defendant in relation to

Mr. Spencer’s report did not comply with the procedure outlined at Clause 15.1 of the

contract.

56. The Court further noted that Mr. Spencer is a Quality Surveyor and the work that was

undertaken by the Claimant was electrical in nature. Having considered the opinion

advance by Mr. Roopchand the Court formed the view that someone with the requisite

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knowledge in the field of electrical installation and/or engineering would have been better

suited to conduct the re-measurement exercise. The lack of compliance with Clause 15.1

notwithstanding, the Court questioned the ability of Mr. Spencer to have undertaken the

exercise, which he did. This Court was not satisfied that the person who Mr. Spencer said

accompanied him was necessarily qualified to measure the works. The methodology

adopted was not properly explained and the Court further found that the prerequisites, as

outlined under Part 33 of the Civil Proceedings Rules 1998 (as amended), was not

established. The Court therefore found that the opinions expressed in the said report were

unreliable and the Court found no assistance from same.

57. In relation to the remedial costs associated with the Claimant’s alleged defective work, Mr.

Nanan, at paragraphs 37 and 38, of his witness statement, set out the matters and

documentation upon which he relied.

58. In cross examination he maintained that all of the payments set out in paragraph 38 were

solely incurred in completing the works that were left incomplete by the Claimant and he

maintained that none of the payments set out therein were in relation to any additions or for

work that deviated from the original scope of works. He also maintained that there were

absolutely no changes to the scope of the project from its commencement in 2007.

59. The Court had the benefit of the evidence of contractors who all worked on the site after the

Claimant, these included R2K, Lyndon Lackram, Maytech Engineering, F&P and Benjamin

Skinner.

60. With respect to R2K Engineering, this general contractor only undertook a portion of

electrical works and the evidence did not establish on a balance of probabilities that $1.5

million was paid for electrical works as advanced by Mr. Nanan.

61. With respect to Lyndon Lackram, only a portion of the works for which he was engaged

related to electrical work and there was no confirmation that $173,000.00 was paid for

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electrical works. The Court also noted that the scope of works included the installation of

the Vincard system, which did not form part of the Claimant’s scope of works.

62. In relation to Maytech Engineering, the evidence established that the works done by this

contractor formed part of the re-design work and included the installation of additional

plugs, lights and switches, which were also not included in the Claimant’s scope of work. .

63. Mr. Nanan suggested in cross examination that F&P did a report on the defects and the

matters which needed to be rectified, but that it did not undertake any works. This defects

report was dated 29th October, 2010 and was prepared months after the Claimant had left the

project and after 2 contractors had undertaken their own works.

64. Finally in relation to the works done by Benjamin Skinner, hand written pages were placed

before the Court but the Court was unable to decipher same.

65. Having reviewed the Defendant’s evidence in support of its counter claim, the Court was

unable to distinguish between the sums allegedly spent on remedial works from what was

actually spent on additional work engaged by the respective contractors. The Court was

also unable to ascertain what amounts were actually paid to contractors for electrical works

and what alleged defects were actually corrected. The Court was therefore unable to find as

a fact that the Claimant’s work was defective and had to be remedied.

66. The Defendant failed to prove the actual quantum that was alleged to have been spent by

way of remedial works so as to remedy alleged defects in the works undertaken by the

Claimant and the Court was therefore constrained to dismiss the Defendant’s counterclaim.

67. Although the Court found that the Defendant wrongly terminated the Claimant’s contract.

The Court found that the Claimant failed to adduce sufficient evidence so as to assist the

Court in quantifying the extent of the loss suffered. In its closing submission the Claimant

asked the Court to order the Defendant to pay loss of profits pursuant to 12.4 (c) of the

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contract but this clause did not apply to the circumstance of the instant case and the witness

statements contained no information as to the costs associated with the project and therefore

the Court was unable to make any award for damages for loss of profits as the Court could

not determine the quantum of profit under the contract.

68. In the circumstances, the Court found that the sum claimed of $1,123,333.58 is owed to the

Claimant and that the Defendant breached the provisions of contract when it failed to pay

the Claimant within the time stipulated under the contract. Further the Defendant repudiated

the contract when it hired R2K Engineering.

69. In the circumstances, and for the reason that have been outlined, the Court found that the

Defendant, by its delay, rendered it impossible for the Claimant to complete the works

within the contracted stipulated period and the Defendant also requested the Claimant to

undertake additional work that was not within the scope of works under the contract.

Valuations 8 and 9 were in relation to same and they were not rubber stamped but

represented the actual value of the works engaged. The Defendant failed or refused to pay to

the Claimant moneys that were legitimately owed to it. This nonpayment notwithstanding,

the Claimant did not abandon the job and when Mr. Watts returned in January 2010, the

company’s service was effectively terminated as a result of the Defendant’s retention of

R2K. Further the Defendant was unable to establish on a balance of probabilities that the

work undertaken by the Claimant was defective or that moneys were expended by it on

remedial works as alleged.

70. Accordingly the counterclaim is dismissed and the Court finds that the sum of $1,123,333.58

claimed by the Claimant is due and owing and hereby orders as follows:

a. The Defendant is to pay to the Claimant $1,123,333.58.

b. The Defendant is to pay interest on the quantum due under Valuations 8 & 9 at a rate

of 0.75% per month from the date of filing on the 22nd June 2013 to the date of this

judgment;

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c. The Defendant is to pay interest on the sums due as preliminaries at a rate of 1% per

annum from the date of filing on the 22nd June 2013 to the date of this judgment;

d. The Defendant is to pay to the Claimant costs on the Claim based on the quantum

awarded on a prescribed costs basis.

e. The Defendant is to pay to the Claimant cost on the Counterclaim calculated on the

prescribed costs basis on the quantum of $786,255.00.

f. There shall be a stay of execution of 42 days.

……………………………………..

FRANK SEEPERSAD

JUDGE

before the court for its determination in the claimants...

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