Estate Management and Business Development Company Ltd v Junior Sammy Contractors Ltd
| Jurisdiction | Trinidad & Tobago |
| Judge | R. Boodoosingh JA |
| Judgment Date | 20 July 2022 |
| Neutral Citation | TT 2022 CA 31 |
| Docket Number | Civil Appeal Number: CA S020/2020 & CA S021/2020 |
| Court | Court of Appeal (Trinidad and Tobago) |
| Year | 2022 |
I. Archie, Chief Justice
C. Pemberton, J.A.
R. Boodoosingh, J.A.
Civil Appeal Number: CA S020/2020 & CA S021/2020
CIVIL Number: CV2018-04840
IN THE COURT OF APPEAL
Mr Jonathan Acton Davis QC leading Mr Colin Kangaloo instructed by Ms Danielle R. Inglefield for the Appellant
Mr Ramesh Lawrence Maharaj SC leading Mr Jagdeo Singh and Mr Kiel Taklalsingh instructed by Ms Karina Singh and Ms Shastine Motilal for the Respondent
Delivered by R. Boodoosingh JA
The appellant is the Estate Management and Business Development Company (EMBD). The respondent is Junior Sammy Contractors Limited (JSCL). EMBD is a State company involved in managing the lands of the former sugar company, Caroni (1975) Limited, which closed some years ago. In early May 2010, EMBD appointed H Lewis Construction Limited (Lewis) to carry out land development works in connection with a project called the Caroni Savannah Residential Development. The works were to be completed by October 2011. The works were either not done or not completed by Lewis. In 2014 EMBD terminated the Lewis contract. In January 2015 EMBD invited fresh tenders which included a scope of works. JSCL submitted a tender for $231,235,125.36 plus VAT and was awarded the contract to undertake or complete the work of the Caroni Savannah Residential Development. In February 2015 the contract was formalised in a written agreement incorporating the Standard Form FIDIC contract terms, as amended. VIKAB Engineering Consultants Limited (VIKAB) was appointed by EMBD as the consultant to assess JSCL's tender and as the engineer of the works. Under clause 3 (1) (a) the engineer was deemed to act for the employer in relation to carrying out duties or exercising authority specified or implied in the contract. VIKAB was therefore effectively EMBD's agent.
JSCL did various works during 2015. JSCL submitted invoices for payment and these were certified by VIKAB. Thirteen Interim Payment Certificates (IPCs) were issued by VIKAB. EMBD paid six of the IPCs in full; one was paid partially and IPCs 8 to 13 were not paid. These payments took place during 2015. Having not been able to secure payment for some of the invoices, in February 2016, representatives of EMBD, JSCL and ANSA Merchant Bank Limited (ANSA) met. JSCL informed EMBD that the unpaid invoices were assigned to ANSA and that JSCL would formally notify EMBD of this assignment.
In August 2016, VIKAB presented a list of defects of the works done and stated which of these were remedied and which were outstanding. In October 2016 JSCL wrote to EMBD indicating that a joint inspection team of the parties had shown the defects were remedied. In November 2016, EMBD wrote to JSCL indicating that the money outstanding on the invoices could only be settled pending an audit by an independent third party as directed by the relevant line Ministry having responsibility for EMBD. EMBD did not raise any issue that the defects had not been remedied or that the inspection team had not concluded that the defects were remedied.
Meanwhile, in July 2018, Lewis filed a claim against EMBD in respect of the terminated contract. After a pre-action letter was sent, JSCL instituted these proceedings on 20 December 2018 seeking to recover $82,804,219.19 plus interest for sums due and owing on account of the unpaid invoices. EMBD filed its Defence.
In March 2019 JSCL filed an application for summary judgment. The day after, EMBD filed an application for specific disclosure. The first case management conference originally scheduled for 15 May 2019 was rescheduled to 25 September 2019. In November 2019 the judge heard the summary judgment and disclosure applications. In January 2020 the judge granted JSCL summary judgment and dismissed EMBD's disclosure application. The judge's written reasons were provided in March 2020.
EMBD has appealed the judge's order for summary judgment and the judge's refusal of the disclosure application. The grounds of appeal were based on the judge's findings of fact and law.
The judge identified Part 15.2 of the CPR as the relevant rule. Under this Part, the court may grant summary judgment on the whole or part of the claim or on a particular issue, if the court finds, on an application by the claimant, that the defendant has no realistic prospect of success on the defence to the claim, part of the claim or issue. The test applied was as stated in the judgment of Kangaloo JA in Western Union Credit Union Cooperative Society Limited v Corrine Ammon, Civil Appeal No. 103 of 2006.
The Defences identified by the judge were:
(i) JSCL assigned the debt resulting from the invoices to ANSA. EMBD contended this was an absolute assignment. Thus JSCL could not sue on the debt. It was for ANSA to do so (the Absolute Assignment Defence).
(ii) EMBD alleged that VIKAB's Interim Payment Certificates (IPCs) did not absolve JSCL from proving that the payments were due and that a debt was owed. EMBD contended that JSCL over-stated what was due on the invoices and was reckless in doing so. Put another way, the issue was whether the IPCs were conclusive in the circumstances of this case to show JSCL's entitlement to payment (OverCertification or Reckless Over-Claiming Defence).
(iii) Another matter identified by the judge was the issue of specific disclosure. EMBD requested and had not received specific disclosure of JSCL's payment applications, including the following: substantiation and measurement of the works undertaken; full details of certification by VIKAB, including substantiation and measurement of works done; and, all measures of works undertaken if not included in the applications or certifications. EMBD contended that it was unable to conclude its analysis of the IPCs until it received disclosure of these matters. This resulted in EMBD being unable to develop a potential defence of abatement (Specific Disclosure Issue).
(iv) The final key matter related to the judge making a finding that a letter dated 9 October 2015 by EMBD to First Citizens Bank acknowledging a debt of $77,658,948.71 to JSCL was a clear admission of the debt due. Having therefore acknowledged the debt, substantially, there was no room for EMBD to now defend the claim (Acknowledgement of Debt Issue).
These matters will be considered in turn.
EMBD's Defence stated that JSCL assigned its cause of action in relation to the sums certified under IPCs 7-13 inclusive ($77,658,948.91) to ANSA. Thus, JSCL does not have any legal standing to bring these proceedings for this substantial part of the sums claimed.
The judge noted that it was common ground between the parties that if there was an absolute assignment, JSCL would have no authority to initiate proceedings as this would fall to ANSA to do. It was also common ground that the embargo against JSCL would only be operative in the case of an absolute assignment.
The judge found that the determination of whether there was an absolute assignment was a question of construction of the relevant instrument as a whole. The relevant instrument in this case was the Assignment of Receivables and that assignment stated that it was subject to a Factoring Agreement, which was annexed to the Assignment. The Factoring Agreement at Clause 4.1.5 reserved to JSCL the right to institute proceedings. Therefore, while the Assignment was stated to be absolute, it was not in actuality so in relation to bringing a claim to enforce the debt. It was conditional on the Factoring Agreement, and in particular, the right and obligation of JSCL to institute proceedings if required. Further, even if the court accepted that there could be an equitable assignment, as contended by EMBD, ANSA would be authorised to commence proceedings only if the assignor was joined. The judge found there was no learning to suggest that an assignor could not institute proceedings. Accordingly, the judge found that the assignment defence was unmeritorious and had no realistic prospect of success.
EMBD submitted that JSCL assigned its entitlement (if any) to all sums claimed, except for retention, to ANSA. This assignment affected $77,658,948.91 of the principal sum claimed of $82,804,291.19.
EMBD's primary case was that on a proper construction, the assignment was an absolute legal assignment such that JSCL had no standing to claim the affected sums at all. The judge was wrong to find that because JSCL had the right to bring proceedings under the Factoring Agreement that this prevented the assignment from being absolute. The correct approach was to consider whether ANSA had the sole right or control of the funds assigned. The provisions of both the Assignment and Factoring Agreements made it plain that ANSA remained in control of the debt. Therefore, the assignment was absolute.
EMBD's secondary case was that the assignment was an equitable assignment, such that JSCL as assignor would only have standing if it was a joint claimant with the assignee, ANSA. ANSA was not a party to these proceedings. Therefore, the proceedings were defectively brought. Accordingly, EMBD submitted, the assignment defence had a realistic prospect of success.
JSCL submitted that EMBD cannot rely on the Notice of Assignment to thwart the clear words and intent of the Factoring Agreement because that Notice did not form part of the agreement.
It was not an absolute assignment because, on the clear words of the Factoring Agreement, the right to sue was expressly reserved to JSCL. The court must consider the document as a whole to determine whether it is an assignment or a charge. The right to sue for the debt was governed by Clauses 4.1.4...
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