Petromar Construction Services Ltd v The Mayor, Aldermen, Councillors and Electors of the Chaguanas Borough Corporation and the Attorney General

JurisdictionTrinidad & Tobago
JudgeHarris, J.
Judgment Date26 March 2012
Neutral CitationTT 2012 HC 104
Docket NumberH.C.A. No. S 1411 of 2000; H.C.A. No. 2979 of 2000
CourtHigh Court (Trinidad and Tobago)
Date26 March 2012

High Court

Harris, J.

H.C.A. No. S 1411 of 2000; H.C.A. No. 2979 of 2000

Petromar Construction Services Limited
The Mayor, Aldermen, Councillors and Electors of the Chaguanas Borough Corporation and the Attorney General

Mr. Abdel Ashraph instructed by Mr. Rennie Gosine for the plaintiff.

Mr. Cowie instructed by Mrs. Badree-Maharaj for the first defendant.

Mr. Byam instructed by Ms. V. Tangpack for the second defendant.

Contract - Parties — Legal capacity to enter into contract — Whether first defendant was a principle contracting party.

Harris, J.

The plaintiff is a Limited Liability Company duly incorporated in Trinidad and Tobago and having its registered office in La Romaine and carries on the business of inter alia providing goods, equipment, labour, materials and services in the construction industry. The first defendant (“the Corporation”) is a statutory entity governed by the Municipal Corporations Act, Chap. 25:04 and is located and operates out of Chaguanas. The second defendant (“the State” or “the Government of Trinidad and Tobago”) is sued pursuant to the State Liability and Proceedings Act, Chap. 8:02.


The plaintiff purportedly entered into several contracts with the Government of Trinidad and Tobago, more specifically with the Ministry of Local Government, to effect certain construction works (the “works” or the “project(s)”) under the central Government's Unemployment Relief Program (“URP”). The contracts were oral and evidenced by a course of conduct and series of related documentation passing between the parties. Much of the related documents contain clear reference to the State in a manner which suggests the State as a contracting party. The plaintiff received interim payments from the Government of Trinidad and Tobago. The projects appeared to have been administered through the CEO of the first defendant Borough Corporation who testified that in relation to the URP works, he was acting under the direction of the Permanent secretary of the Ministry of Local Government and not the Corporation. The CEO's signature and first defendant's stamp appears on much of the project documentation exhibited and relied upon in this matter. The projects were located in areas outside of the geographic limits of the said Corporation and in the circumstances of this case, outside the jurisdiction of the Corporation. Through a web of connected procedures and documents between the three entities, none of which, it was argued, appeared to have a statutory sanction, the works, the subject of this action, were completed. The plaintiff is suing for the balance due and owing in the principal total sum of $704,594.65, for goods and services supplied for four (4) projects by the plaintiff and received by the first and second defendants. There is no dispute and no evidence to the contrary, that the works were commissioned and carried out to completion. The Unemployment Relief Program (“URP) works were administered by a combination of persons in the employ of the Central Government and at the very least, along with the CEO of the Corporation, albeit, as he contended, not as agent of, or under the direction of the Corporation. There is no dispute over the quantum of the balance due and owing to the plaintiff. At trial, some 12 years after the commencement of this matter, the plaintiff unsuccessfully applied for leave to amend its pleadings at trial to include a redefined claim; that the plaintiff contracted directly with the State as the principal and not through the first defendant as agent/servant of the State.


The first defendant denies liability on the basis that it does not have the statutory authority to either commission the works, the subject of this action, which fell outside of it statutorily defined geographic limits or to contract with a party to do so. Further, the said first defendant submits that it does not have the statutory authority to undertake and discharge the liability for Central Government's financial obligations or have the capacity to act as the agent for the State as alleged by the plaintiff, in the circumstances of this case. Finally, the Corporation contends, that on the facts and upon consideration of the course of conduct of the parties, including the project documents moving between the parties – the existence of which were not contested by the second defendant, the plaintiff clearly contracted directly with the State as a principal, to carry out the subject works.


The second defendant, the State, filed a Defence, but did not file a witness statement in the matter. The State pleaded and at trial argued, very simply, that in Law, the Corporation cannot act for or bind the State other than in statutorily defined situations that allow for the delegation of that authority to the Corporation. They argue that those situations are defined in the Statutes and there is no evidence in the case in support of its invocation nor, in any event, were the factual basis of those circumstances pleaded or indeed even argued. The State contends further, that even if the Corporation could act as agent of the State in the circumstances of this case, the Central Tenders Board Act, Chap. 71:91 does not allow for the State to enter into agency contracts other than express contracts as opposed to implied contracts such as the subject contracts. Further, that on the evidence, including the documentary evidence, the plaintiff clearly contracted with the first defendant as a principal and not with the first defendant as agent of the State. They contend that the ingredients of the formation of a contract between the plaintiff and the first defendant was proved.


The State submits as its principal defence; that the pleaded case for the plaintiff is that he contracted with the first and second defendants, where the first defendant “…was at all material times a servant and/or agent…” of the State. The State contends the plaintiff did not plead that it contracted directly and independently with the State, neither did it plead the alternative case for unjust enrichment or any other equitable relief. On the pleadings, submits the second defendant, and having regard to the Law and/or the evidence led by the other parties, the pleaded case for the plaintiff against the second defendant must fail.


The plaintiff submitted in response to the second defendant's claim that (i) the first defendant cannot bind the State and (ii) the plaintiff's pleadings are limited to an action based on the Corporation acting as an agent of the State and therefore do not allow a case for the plaintiff that it contracted with the second defendant directly, thus; that the evidential burden is on the defendants to show that any relevant person or authority acted outside the scope of the relevant Statutes or that any relevant person/party was not a delegate of the Ministry or Permanent Secretary. Further, the plaintiff contends that contrary to the submissions of counsel for the State, it is open to the Court on the facts and pleadings to find that the plaintiff contracted with the State directly.


The Court holds that the pleadings for the plaintiff, upon proper construction, at para 2, 3 and 5 of the Statement of claim, discloses an allegation and claim against either or both of the defendants and contrary to the State's submission, does leave it open for a finding against the State on the cause of action pleaded if in the absence of the Corporation's role as “agent”, there is sufficient evidence to conclude the constituent elements of a contract between the plaintiff and State. The State's participation in the process and benefit from the works cannot be disputed. Further, the course of dealing of the first and second defendant affirmed the plaintiff's understanding and its principal pleaded case that he contracted with the second defendant through the agent, the first defendant. The Court holds however, that neither defendant had the legal capacity to enter into the implied contracts (particularly the contract of agency), the subject of this action. The Court holds also, that the URP works were that of the Central Government. Further, the court holds that on the evidence, the Corporation was not in fact, the principal ‘contracting’ party. The court further holds that on the evidence, there is insufficient evidence to found a contract in fact, between the plaintiff and the State as direct principal contracting parties and that in any event, the law does not permit the formation (or enforcement) of such a contract. I so find. No alternative case was pleaded for the plaintiff for the ostensible authority of the Corporation to Act as the agent of the State; unjust enrichment or any other equitable remedy. The case for the plaintiff against all the defendants is hereby dismissed. That in the circumstances of this case and the law, the plaintiff is ordered to pay fifty percent of each of the defendant's taxed costs.


The plaintiff pleaded that there were several oral contracts between it and the first (the Municipal Corporation) and the second defendants (the State) arising from dealings between it, the second defendant and it and the first defendant — a Statutory Corporation — in which the first defendant (the Corporation) acted as the second defendant's (the State) agent at all material times.


The plaintiff led evidence of the course of dealings he had with the parties. His evidence was in effect that he contracted with and had a course of dealings with, the State and the Corporation. He acknowledged that the four projects were located outside of the geographic jurisdiction of the defendant Corporation. He testified and produced several exhibits in support of his case: (i) He exhibited Invoice Orders bearing the Corporations letterhead and signed and stamped by the CEO of the Corporation; (ii) he...

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