Issa Nicholas [Grenada Ltd] Appellant v Electrotec Services Ltd Respondent [ECSC]
| Jurisdiction | Grenada |
| Judge | BYRON J.A,DENNIS BYRON,Justice of Appeal,SIR VINCENT FLOISSAC,Chief Justice,SATROHAN SINGH |
| Judgment Date | 13 May 1996 |
| Judgment citation (vLex) | [1996] ECSC J0513-1 |
| Date | 13 May 1996 |
| Court | Court of Appeal (Grenada) |
| Docket Number | CIVIL APPEAL NO.12 OF 1995 |
IN THE COURT OF APPEAL
The Rt. Hon. Sir Vincent Floissac Chief Justice
The Hon. Mr. C.M. Dennis Byron Justice of Appeal
The Hon. Mr. Satrohan Singh Justice of Appeal
CIVIL APPEAL NO.12 OF 1995
Mr. K. Hudson Phillips, QC and Mr. Jayaram instructed by Ernest John for the Appellant
Sir Harold St.John, QC & Mr. J. Bristol, instructed by Henry, Henry and Bristol for the Respondent
This is an appeal against the decision of St.PauI J. delivered on the 16th June 1 995 in which he gave judgment for the respondent in the sum of $325,921.00 EC with interest at 6% per annum until payment and costs to be agreed or taxed.
In brief the respondent had sued on an alleged oral contract made between the 5th November 1985 and 11th July 1986 with the appellant to do electrical and plumbing work on its Ramada Renaissance Hotel. It alleged that the appellant engaged Project Control Associates [PCA] to act on its behalf with regard to the said works, and orally advised that payment would be certified by the said PCA.
In its defence the appellant denied any contractual relationship with the respondent, and alleged a contract with PCA for the construction/renovation of the Hotel and a sub-contract between PCA and the respondent to perform the electrical and plumbing work.
The respondent did not join PCA as a party nor raise any issue of quantum meruit. An obvious result of this omission is that no order can be made to give effect to any finding of a contractual relationship between PCA and the respondent. Another, is that failure to prove the alleged contract is critical as the respondent would not be entitled to judgment for a reasonable sum, on proof of work done at the request of the appellant.
Contrary to the allegation of agency in the pleadings, counsel for the respondent agreed that their case would stand or fall on the issue of whether there was a direct contract between the appellant and the respondent. The proposition that the pleadings confine the court in this manner was expressed by Goff J. inBritish Steel Corporation v Cleveland Bridge Co. Ltd. [1984] 1 All E.R. 504 at p.509:
"In most cases, where work is done pursuant to a request contained in a letter of intent, it will not matter whether a contract did or did not come into existence, because, if the party who has acted on the request is simply claiming payment, his claim will usually be based on a quantum meruit, and it will make no difference whether that claim is contractual or quasi-contractual. Of course, a quantum meruit claim [like the old actions for money had and received and for money paid] straddles the boundaries of what we now call contract and restitution, so the mere framing of a claim as a quantum meruit claim, or a claim for a reasonable sum, does not assist in classifying the claim as contractual or quasi contractual. But where, as here, one party is seeking to claim damages for breach of contract, the question whether any contract came into existence is of crucial importance."
The main issue raised by the appellant in the grounds of appeal was that there was no privy of contract between the appellant and respondent in relation to the said works, but rather that the respondentwas a sub-contractor of PCA.
The respondent relying on a line of cases which includedBookers Stores v Mustapha Alley [1972] 19 WIR 230; Adolphus v Popper [1986] 39 WIR 76; Singh v Chase Manhatten [1991] 45 WIR 220 submitted that the findings of the learned trial Judge should not be disturbed. These cases affirm the principle that an appellate court recognising the advantage of a trial Judge in determining the credibility of witnesses, having actually seen and heard them, would not normally substitute its judgment on this issue.
This proposition, however, is not applicable to this appeal as no evidence was adduced on behalf of the appellant and the findings of the learned trial Judge did not turn on his evaluation of the credibility of any witness. His decision was based on the inferences he drew from uncontradicted oral and documentary evidence.
An appellate court is in as good a position as a trial Judge to determine the proper inferences to be drawn from such evidence and should form its own independent opinion.
This principle was explained inBenmax v Austin Motor Co.Ltd. [1955] 1 A.E.R. 326 at 329, by Lord Reid thus:
"But in cases where there is no question of the credibility or reliability of any witness, and in cases where the point in dispute is the proper inference to be drawn from proved facts, an appeal court is generally in as good a position to evaluate the evidence as the trial judge, and ought not to shrink from that task, though it ought, of course, to give weight to his opinion."
The legal principles which govern privity of contract in building contracts are not in dispute. The general principle is that no privity of contract, between a building owner and a contractor, can arise out of a sub-contract concluded between the building owner's main contractor and that other contractor.
I adopt the statement in Hudson's Building and Engineering Contracts 1 995 edition volume 2 paragraph 13—016:
"It cannot be over-emphasised that no privity of contract between an owner and another contractor can arise out of asub-contract concluded between the owner's main contractor and the other contractor. Where the sub-contractor has been selected by the owner, as in the case of a nominated sub-contractors, early attempted were made to argue that the main contractor on the A/E had on the facts contracted as an agent or trustee of the owner, and at one time this view appears to have prevailed in the courts, at least in relation to nominated or selected subcontractors. However, the later cases made it clear that in only in the most special and unusual facts, showing that the owner expressly or by some unusual conduct authorised the main contractor or the AlE so to contract, would justify such a finding, which is contrary to the purpose of the usual main contract and the practice and expectation when negotiating contracts informally between the various parties in the construction industry."
An employer may, however, become liable to a sub-contractor on an express promise to pay the sub-contractor where he gives him a direct order to carry out work. I also adopt the statement in Keating on Building Contracts fifth edition at page 285:
"Orders by employer. If the employer gives a direct order to a sub-contractor to carry out work or deliver goods he may make himself liable to the sub-contractor on an express promise to pay the sub-contractor.
A sub-contractor, suing the employer for work extra the original contract, must put in that contract if in writing, and also prove a separate and distinct contract with the employer to do the work sued for.Eccles v Southern [1861] 3F&F 142, NP."
Mr. lmtiaz Hosein, a civil engineer and a director of PCA, gave evidence for the respondent. He stated that the appellant and PCA of Trinidad had entered into a written contract on 7th August, 1985 [which was exhibited in evidence] to renovate 1 86 rooms for a the sum of US $3,361,270.00. PCA and the appellant also orally contracted on the same terms for construction of new central facilities at a price of US$3,000,000.00, and also for certain external works and variations in the area of US$2,000,000.00. He was apppointed by Hafeez Karamath Construction to act on behalf of PCA for the supply of equipment, labour and materials for the project and to make arrangements for all shipments and foreign purchases. He said that PCA subcontracted the respondent to do electrical and plumbing works as specialist electricians and plumbers approved by Mr. Nicholas.
He added, that there were works relating to external works separate from the original works which PCA supervised, as requested by Mr. Nicholas verbally.
Mr. Lindsay Gay, the representative of the respondent acknowledged sending letters to Messrs Hafeez Karamath on 12th August 1985 quoting the price of $256,400.00, "exclusive of the Main Contractor's discount", for carrying out the electrical and plumbing works for the reinstatement of the 186 rooms, and on 18th September 1985 enclosing documents indicating that the total sum for its work on the Renovations Contract would be $256,400.00, on the New Central Facilities Contract $335,000.00 and for works additional to those contracts $85,860 for the external works contract $1,271,300.000 and for works additional to that contract $182,000.00, and referring to projected cash drawings on these contracts on dates which included 20th September, 4th & 18th October, 1st, 15th & 29th November.
The written or main contract between the appellant and PCA exhibited in evidence contained the following provisions:
Clause 59(1):
"All specialists, merchants, tradesmen and others executing any work or supplying any goods, materials or services for which Provisional Sums are included in the Contract, who may have been or be nominated or selected or approved by the Employer or the Engineer, and all persons to whom by virtue of the provisions of the Contract the Contractor is required to sub-let any work shall, in the execution of such work or the supply of such goods, materials or services, be deemed to be subcontractors employed by the Contractor and are referred to in the Contact as "nominated Sub-Contractors".
Clause 59[5]:
"….. the Employer shall be entitled to pay such nominated Sub-Contractor direct, upon the certificate of the Engineer, all payments, less retentions, provided for in the Sub-Contract, which the Contractor has failed to make to such nominated Sub-Contractor and to...
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