Volker Stevin Construction Europe Bv v Vos Ltd

JurisdictionGrenada
JudgeBarrow, J.A.
Judgment Date02 June 2008
Neutral CitationGD 2008 CA 7
Docket NumberCivil Appeal No. 013 of 2007
CourtCourt of Appeal (Grenada)
Date02 June 2008

Court of Appeal

Barrow, J.A.; Rawlins, J.A; Thomas, J.A.(Ag.)

Civil Appeal No. 013 of 2007

Volker Stevin Construction Europe Bv
and
Vos Limited
Appearances:

Mr. Karl Hudson-Phillips QC and Ms. Leslie-Ann Seon for the appellant.

Mr. James Bristol and Ms. Shireen Wilkinson for the respondent.

Burton v. The Great Northern Railway Company (1854) 9 Ex. 507 applied.

Contract - Building of cruise ship terminal — whether arrangement between the parties was a standing offer or a contract for provision of merchandise — Finding that an 18 month contract existed.

The appellant Company (“the appellant”) was contracted to build a cruise ship terminal in Grenada. The respondent Company (“the respondent”) is alleged to have been incorporated for the purpose of providing the appellant with skilled and unskilled labour pursuant to an oral agreement made between three individuals (‘the contractors”). The oral agreement allegedly provided for the provision of labour by the contractors/respondent for the duration of the appellant's contract to construct the new port. The respondent provided labour from 14th February to 4th March 2003 but its services were terminated by the appellant on 17th March, 2003. The respondent argued successfully in the Court below that the appellant's termination was a wrongful repudiation of the agreement. The appellant's appealed on the ground that no contract existed between the parties.

Held, allowing the appeal and awarding costs to the appellant:

The agreement between the parties was the acceptance by the appellant of a standing offer made by the respondent to provide such numbers of workers as were required from time to time. This did not create an exclusive or absolute obligation on the parties, or in other words, this was not an absolute contract. Each time a certain number of workers were required of the respondent, a separate contract would be created. There was a contract only to the extent of that requisition; otherwise there was no contract.

Barrow, J.A.
1

Both parties submitted to the judge that the sole issue he was required to decide was whether there was a contract between the parties to supply labour for eighteen months or whether there was a contract to supply labour for the completion of a specific building. Notwithstanding that the appellant had so conveyed to Benjamin, J., the appellant contends on appeal that the judge should have found the contract between the parties was not of either such description but was a contract to supply labour as periodically requested.

THE STATEMENTS OF CASE
2

The judge found there was a contract to supply labour for eighteen months. He awarded damages of $2,402,244.08 to the respondent, who was the claimant below, for breach of contract. The claim made in the amended statement of claim was that in January 2003 an oral agreement was made between Bruce Hutton, Stuart Hutton and Jan Van Der Steen (together “the contractors”) and the defendant (hereafter the appellant). The respondent alleged it was agreed that pursuant to a quotation faxed to the appellant on 21st January 2003 at 2:43 p.m. the contractors would provide the appellant with skilled and unskilled labour for the 18 months duration of the appellant's contract to build a cruise ship terminal in St. George's, Grenada.

3

The respondent further alleged it was agreed between the parties that the contractors would incorporate the respondent Company to perform the contract but in the interim the contractors would perform the contract. At all material times, the respondent said in their statement of case, the contractors were represented by Jan Van Der Steen (hereafter Steen). The quotation, it was said, included the respondent's provision for profit on the said labour at 71%. The respondent stated it anticipated the cost of labour as EC$4,086,732.00 and the profit on that sum was EC$2,901,579.00.

4

Pursuant to the agreement, the respondent stated, the contractors provided labour from 14th February 2003 to 4th March 2003, when the respondent Company was incorporated. Thereafter, it was stated, the respondent and appellant agreed that the respondent would provide the said labour on the same terms and conditions as were agreed between the contractors and the appellant. Invoices were thereafter issued by the respondent and duly paid by the appellant.

5

By letter dated 17th March 2003 the appellant terminated the agreement, wrongfully the respondent stated, before the appellant completed its contract to build the terminal. On that same date Steen terminated his relationship with the respondent. The respondent stated the appellant's termination was a wrongful repudiation, which it accepted, and claimed damages.

6

In its amended defence the appellant denied the agreement or any agreement alleged by the respondent. The appellant stated “an offer was made” by the appellant “for the construction of a site office building for the Cruise Ship Terminal Project only.” In or about the month of December 2002, the appellant stated, its project manager held discussions with Steen, and then at a later date with Bruce Hutton and Steen, about providing certain services for the construction of the terminal. These discussions included, among other things, the supply of labour to the appellant for the Project and the supply of labour for the erection of a building to be used as the appellant's site office.

7

The amended defence stated the respondent sent various quotations to the appellant including a letter dated 21st January 2003 to supply labour for the construction of the office building and a second letter of even date showing a breakdown of the labour costs, which the appellant stated it had requested verbally. The appellant stated that its project manager indicated to the respondent then that the cost was too high but directed that the respondent could start the work on the site office building, for which payment would be on an hourly basis. Save as stated, the appellant said, it denied the agreement asserted by the respondent. The defence admitted that the appellant “terminated the services” of the respondent and gave the reasons for doing so.

Facts found by the judge

8

Guided by the appellant's statement of the issue, with which the respondent agreed, which was whether there was a contract to supply labour for 18 months during the construction of the terminal or a contract to supply labour for the construction of a site office building only, the judge reviewed the evidence to determine which was the true version of the agreement. He concluded that “the evidence has established overwhelmingly that there was an oral contract between the parties for the Claimant to supply the labour for the entire duration of the contract and not, as pleaded and argued on behalf of the defendant for only the erection of a site office building.” ( Vos Ltd. v. Volker Stevin Construction Europe BV Grenada GDAHCV 2003/0479 (delivered 23 March, 2007); paragraph 36)

9

In a number of instances the judge considered the conflict in the testimony of witnesses for the appellant and the respondent and provided a reasoned basis for resolving the conflicts in favour of the respondent's witness. Mr. Hudson Phillips QC, counsel for the appellant, who did not appear in the Court below, does not seek to challenge these determinations by the judge. This Court is therefore not being asked to interfere with such findings of fact. The Court is being asked to find, however, that the evidence, unchallenged though it is, failed to establish a number of core factual assertions.

No evidence of a contract

10

Mr. Hudson-Phillips challenged the factual premise of the decision by first acknowledging that in closing arguments counsel on both sides “appeared to restrict themselves” to the question whether or not there was a contract for the construction of a site office building only or for the supply of labour for a period of eighteen months. But, he submitted, whether the arrangement was to provide labour for the limited purpose of the construction of the site office or for the entire period of the main contract, the Court first had to find that there was evidence that a contract had come into existence.

11

Counsel submitted the respondent based its claim to an eighteen-month contract on “a quotation faxed to the defendant on 21St January 2003 at 2.43 p.m. (See paragraph [2], above).” However, counsel submitted, the evidence indicated that as late as 13th March 2003 negotiations were taking place on manpower requirements and rates of pay for workers. (Record of Appeal, bundle III, pp 440, 441 paras 41, 42 and 43.) This fact was the foundation slab for Mr. Hudson-Phillips' argument that no contract between the parties ever came into existence.

12

In particular, counsel submitted, there was no evidence of the following:–

  • (i) Of the duration of the main contract to construct the Cruise Ship Terminal.

  • (ii) Any agreement on the rates of pay of skilled and unskilled workers to be employed.

  • (iii) Any requirement that the appellant, Volker Stevin Limited, undertook to employ labour exclusively from the respondent or at all. Rather at best the evidence showed that a contract, whether to erect the site office or for the entire contract, only came into existence on each occasion that Vos Limited was requested to supply labour and agreed so to do.

  • (iv) That there was any obligation on the part of Volker Stevin to request Vos Limited to supply labour. Nor was there any obligation, enforceable by Volker Stevin, on the part of Vos Limited to supply labour if requested.

EVIDENCE OF A CONTRACT
13

In response, the respondent noted that the judge was never asked to consider “the bare issue of the existence/non-existence of a contract”, and so he never addressed or examined this issue in his judgment. However, the respondent submitted, proof of the existence of a contract was...

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