Climate Control Ltd v C.G. Construction Services Ltd
| Jurisdiction | Trinidad & Tobago |
| Judge | Kokaram, J. |
| Judgment Date | 21 March 2016 |
| Neutral Citation | TT 2016 HC 45 |
| Docket Number | CV 2015-03486 |
| Court | High Court (Trinidad and Tobago) |
| Date | 21 March 2016 |
High Court
Kokaram, J.
CV 2015-03486
Mr. Matthew Gayle for the claimant
Mr. Stephen Salandy for the defendant
Civil practice and procedure - Application by the defendant to stay the proceedings and have the judgment vacated pursuant to section 7 of the Arbitration Act, Chapter 5:01 or alternatively to set aside the judgment — Application by the defendant be given leave to file its defence pursuant to Rule 13.1 of the CPR and or the inherent jurisdiction of the Court — Whether the defendant demonstrated that he had a realistic prospect of success — Whether the defendant acted as soon as reasonably practicable when they found out the judgment had been entered against him.
On 19th November 2015 the claimant, Climate Control Limited, obtained judgment in default of appearance against the defendant, C.G. Construction Services Limited, for the sum of $376,795.87. The defendant has now applied to the Court, by application dated 22nd December 2015, to stay the proceedings and have the judgment vacated pursuant to section 7 of the Arbitration Act Chapter 5:01 (the Act) or alternatively to set aside the judgment and for the defendant to be given leave to file its Defence pursuant to Rule 13.1 of the CPR and or the inherent jurisdiction of the Court.
There was a heated debate by Counsel for both parties as to which application should properly be heard first, whether the application to stay the proceedings on the basis that the dispute is the subject of an arbitration clause or whether the judgment ought to be set aside should first be heard. I understood Counsel for the defendant to be concerned that an application to set aside judgment may be construed as a step in the proceedings and therefore a submission to the jurisdiction of the Court rendering the application for a stay otiose. Accordingly in the defendant's view, the Court should first consider whether the proceedings should be stayed first. A stay of the proceedings, without setting aside the judgment, can only properly mean a stay of the execution of a properly entered judgment. If the proceedings are stayed without setting aside the judgment, it would mean that there is a properly entered judgment against the defendant at the same time it is pursuing its arbitration proceedings.
In my view the application to set aside the judgment in default of appearance should be dealt with first before any consideration of a stay can be entertained. The jurisdiction to stay proceedings under section 7 of the Act is premised upon a defendant “entering an appearance” in the proceedings. In this case unless the judgment is set aside to permit the defendant to enter an appearance this aspect of the statutory regime to stay proceedings would not be satisfied. In any event, the answer to the debate is largely academic as I have found no merit in either application made by the defendant to stay the proceedings or set aside judgment and for the reasons explained in this judgment its application would be dismissed with costs.
The claimant commenced these proceedings against the defendant on 21st October 2015 as a simple debt collection claim. It was contracted by the defendant to deliver and install industrial air conditioning systems in “Toyota facilities” located at South Park, San Fernando pursuant to a sub contractor sub contract document dated 3rd May 2011. Some material terms of that contract which were exhibited to the Statement of Case were as follows:
“Net Value of the Works: $871,319.97 - Eight Hundred and Seventy One Thousand Three Hundred and Nineteen Dollars and Ninety Seven Cents.
Main Contract Start and Finish Dates: February 2011 - July 2012
Sub-Contractors Start and Finish Dates: 22/3/11 - 11/7/12
Project Name and Address: New Toyota Facilities - South Park, San Fernando
Form of Contract: This sub-contract shall be governed under the same rules that govern the main contractor, i.e.:- “Federation Internationale Des Ingenieurs Conseils” (FIDIC) 1988. A copy of this contract is held by the main contractor and may be perused at the Contractors office. However, the Sub-Contractor attention is down to the following clauses:-
a. Defect Liability Period: Six (6) months
b. Fixed Price Contract:
c. Insurance: Sub-Contractors to provide both Contractor's All, Risk and Workmen Compensation Cover.
d. As Built Drawings: Sub-Contractor will produce these as works proceed.
e. Liquidated Damages: $6,000.00 per day to a maximum of 5% of contract sum.
f. Retention: 5% to a maximum of 5% of the contract sum.
g. Programme: Sub-Contractor must provide a programme prior to his work commencing using Microsoft Project.”
Pursuant to the agreement the claimant delivered and installed air conditioning systems to the defendant at the Toyota facilities and submitted several invoices to the defendant. The invoices were annexed to the Statement of Case and a term of the invoice was that payment was due within 30 days after the invoice date. The defendant paid some sums but not all the invoiced sums and the balance due on the invoices amounted to $246,716.56 plus interest at the contractual rate of 2%.
The Claim was served on 21st October 2015. On 27th November 2015, no appearance having been filed, judgment was entered against the defendant.
The defendant in its application to stay or set aside the judgment briefly sets out its grounds for its application as follows:
“i. The defendant is a contractor which secured a contract (hereinafter referred to as “the main contract”) to construct a building on behalf of “Toyota” (hereinafter referred to as “Toyota”) at South Park, San Fernando, subject to the terms and conditions of the Federation Internationale Des Ingenieurs Conseils (FIDIC).
ii. The defendant sub-contracted the procurement and installation of the Air Condition system to the claimant, and it was a term of the agreement between the claimant and the defendant that the sub-contract shall be governed under the same rules that govern the main contract i.e. Federation Internationale Des Ingenieurs Conseils (FIDIC).
iii. The Terms and Conditions of the Federation Internationale Des Ingenieurs Conseils (FIDIC) as amended made provisions for the settling of disputes and in the event such provisions failed that the matter proceed to Arbitration.
iv. A dispute arose between the claimant and defendant regarding defects in works undertaken by the claimant and its demands for payment therefore.
v. To secure payment, the claimant failed to adopt the process outlined in its Terms and Conditions of contract to settle the dispute and in breach thereof proceeded directly to litigation.
vi. Further, by exchange of correspondence the claimant knew that the Client's Architect identified defective work in the Air-Condition installation, occasioning damages to its compound for which the claimant would ultimately be liable.
vii. Due to administrative error and inadvertence the Claim Form and Statement of Case filed were not forwarded to the defendant's attorneys. As soon as it was brought to the defendant's attention that Judgment was entered against it, steps were taken to vacate or set aside the Judgment and stay the proceedings.
viii. The defendant has a good defence and or set off and or counterclaim to the claimant's claim.”
Insofar as the defendant seeks to stay the proceedings in furtherance of a dispute settlement procedure, the terms of the FIDIC which deals with the settlement of disputes provides as follows:
“Settlement of Disputes
Engineers Decision:
If a dispute of any kind whatsoever arises between the Employer and Contractor in connection with, or arising out of the contract or the execution of the Works, whether during the execution of the Works or after their completion and whether before or after repudiation or other termination of the Contract, including any dispute as to any opinion, instruction, determination, certificate or valuation of the Engineer, the matter in dispute shall, in the first place, be referred in writing to the Engineer, with a copy to the other party. Such reference shall state that it is made pursuant to this Clause. No later than the eighty-fourth day after the day on which he received such reference the Engineer shall give notice of his decision to the Employer and the Contractor. Such decision shall state that it is made pursuant to this Clause.
Unless the Contract has already been repudiated or terminated, the Contractor shall, in every case, continue to proceed with the Works with all due diligence and the Contractor and the Employer shall give effect forthwith to every such decision of the Engineer unless and until the same shall be revised, as hereinafter provided, in an amicable settlement or an arbitral award.
If either the Employer or the Contractor be dissatisfied with any decision of the Engineer, or if the Engineer fails to give notice of his decision on or before the eighty-fourth day after the day which he received the reference, then either the Employer or the Contractor may, on or before the seventieth day after the day on which the said period of 84 days expired, as the case may be, give notice to the other party, with a copy for information to the Engineer, of his intention to commence arbitration, as hereinafter provided, as to the matter in dispute. Such notice shall establish the entitlement of the party giving the same to commence arbitration, as hereinafter provided, as to such dispute and, subject to Sub-Clause 67.4, no arbitration in respect thereof may be commenced unless such notice is given.
If the Engineer has given notice of his decision as to a matter in dispute to the Employer and the Contractor and no notice of intention to commence arbitration as to such dispute has been given by either the Employer or the...
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