Shade Construction Company Ltd v The Cepep Company Ltd
| Jurisdiction | Trinidad & Tobago |
| Judge | Mr Justice James C. Aboud |
| Judgment Date | 20 January 2020 |
| Neutral Citation | TT 2020 HC 18 |
| Court | High Court (Trinidad and Tobago) |
| Docket Number | Claim No. CV2017-03282 |
| Date | 20 January 2020 |
the Honourable Mr Justice James C. Aboud
Claim No. CV2017-03282
IN THE HIGH COURT OF JUSTICE
• Ms Lesley-Ann Lucky-Samaroo for the claimant
• Mr Colvin E Blaize and Mr Farai Hove Masaisai instructed by Mr Issa Jones for the defendant
The defendant has applied to set aside a default judgment and to stay a writ of execution. After the default judgment was obtained the claimant applied for and attempted to execute the writ of execution. In a bid to escape the asset seizure the defendant paid over two cheques roughly in the amount of One Million dollars. The grounds of the defendant's application are that the default judgment was entered prematurely and that any application for a default judgment without the court's permission is improper. It says this because the defendant maintains that it is an arm of the State. According to the defendant, the default judgment should also be set aside because the defendant has a realistic prospect of success in the claim and it acted as soon as reasonably practicable after finding out that judgment had been entered. The defendant's argument on the delay is that immediately after the 2015 election all of its politically appointed officers abandoned the company leaving a pile of high court claims and no proper records or ability to defend them. The claimant opposes the application on each of the grounds mentioned above.
According to the claimant, in or about early 2015, the defendant allegedly invited tenders for refurbishment works to be undertaken at the La Horquetta Health Centre (‘the health centre’) on behalf of the North Central Regional Health Authority. Pursuant to the invitation to tender, the claimant was, by a letter of award of 10 April 2015, awarded a contract to refurbish the health centre at the fixed price of $742,100 plus VAT. There is no written contract in evidence before the court. The letter of award specified a lump sum payment without any of the usual terms of payment for contracts of this type, for example, a retention sum, a mobilisation fee, or payments upon an engineer's certification of successful completion.
Pursuant to the letter of award the claimant said that it completed the refurbishment works and a completion certificate was issued on 14 August 2015. The defendant says that the certificate was issued by an officer who was unauthorised to do so. Payment was due 90 days from the date of completion. Thereafter, the claimant made numerous unsuccessful attempts to collect payment from the defendant.
On 24 November 2015 the claimant's attorney sent a pre-action letter to the defendant setting out the details of the claim. The defendant responded by letters dated 4 and 14 December 2015. These letters indicated that the defendant needed time to respond and that it was in communication with its attorneys, Messrs Hobsons. By letters of 24 May 2016 and 9 December 2016 the claimant's attorney made further requests for payment. The defendant informed the claimant, by letter of 8 February 2017, that it was awaiting funding to make payments to all contractors.
The Claim Form and Statement of Case were filed on 14 September 2017. The claimant sued the defendant for $853,415 (VAT inclusive) together with statutory interest and costs. This sum was claimed in respect of works done for the refurbishment of the health centre pursuant to the purported agreement or letter of award of 10 April 2015.
On 19 September 2017 the Claim Form and Statement of Case were mailed to the defendant by registered post. A registered mail receipt evidences its posting on 19 September 2017. There was no return from the postal service to indicate that the envelope was not delivered. Ms. Mark, an employee of the claimant's attorney, Ms Lucky-Samaroo, said in her affidavit of service that she had a conversation with Ms. Lucky-Samaroo who told her that an unnamed paralegal at the defendant's office “verified receipt of the documents” in the registered mail envelope. However, Ms Mark did not say when this communication took place. According to CPR Part 5.17(1) when a Claim is served by post the deemed date of service is the fourteenth day after the date of posting.
In the defendant's 1 March 2018 set aside application (that I will come to in detail below) one of the grounds is that the application for default judgment was premature. The claimant however filed an affidavit by one Ms Hector, an employee of the Trinidad and Tobago Postal Corporation. She said that on 22 September 2017 she personally delivered the registered envelope to the defendant's registered office by giving it to one A. Sankar, an employee who was held out as entitled to receive mail on its behalf. In light of this affidavit I will therefore have to resolve whether the deemed date of service or the actual date of service is paramount in terms of calculating time when service of a claim is effected by registered post.
No entry of appearance was filed. On 10 October 2017, the claimant went to the court office and formally requested judgment against the defendant in default of appearance. Judgment in default of appearance was entered on 31 October 2017. (The delay in its issuance was caused by an immaterial query from the court office.) The defendant was ordered to pay the claimant the sum of $939,609.26 for the debt, interest and costs to the date of entry of the judgment together with interest at the statutory rate of 5% per annum from the judgment date to the date of payment. The defendant admitted by affidavit that it received a copy of the default judgment on 13 November 2017 from its then attorneys, Messrs Hobsons. The defendant's application to set aside the judgment was filed on 1 March 2018. Time therefore starts running from 13 November 2017. The time it took to apply to set aside the judgment is three and a half months.
On 29 November 2017, almost a month later, the claimant applied for a writ of execution from the court office to recover the judgment sum, calculated, as at the date of that application, to be $943,613.26. According to the affidavit of Perry Shade, the managing director of the claimant company, on 8 December 2017 the bailiff went to the head office of the defendant for the purpose of executing the writ of execution and seizing its assets. While Mr Shade and the bailiff waited, the defendant procured two cheques to cover the judgment debt and costs of the levy in the amounts of $939,609.26 and $249,902.32. These cheques were accepted in lieu of the intended levy. The cheque for $249,902.32 was however later dishonoured by the defendant's bank and the claimant has since instituted separate proceedings against the defendant concerning that cheque.
On 16 February 2018 Hove & Associates were appointed to act as the attorneys-at-law for the defendant instead of Messrs Hobsons. A notice of change of attorney was filed on 23 February 2018, although, since an appearance had never been filed by Hobsons, such a notice was unnecessary.
On 1 March 2018 the defendant applied to set aside the default judgment. In addition it sought to suspend the writ of execution, presumably as a defence to the claimant's second claim for the dishonoured cheque obtained at the levy. The defendant mistakenly or otherwise referred to the judgment obtained against it as a judgment in default of Defence. In fact it was a judgment in default of Appearance. The application sought these orders:
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(a) The judgment in default of [Appearance] entered on 31 October 2017 be set aside in accordance with Part 13.3 of the Civil Proceedings Rules 1998 (as amended);
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(b) The time for filing and serving the Defence be extended to a date subsequent to the hearing of this application;
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(c) That the monies received by the Claimant on 8 December 2017 under the Default Judgment granted on 31 October 2017 be paid into court until the determination of the matter;
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(d) The costs of the Application to be costs in the cause.
According to the defendant's application, the contract alleged and pleaded by the claimant was not binding on the defendant company since it was not duly signed in conformity with section 19(1) of the by-laws of the defendant. It was also not in conformity with section 20.1 of the by-laws appended to the Companies Act or any other section or sections of the bylaws. The Board of the defendant company did not pass any resolution permitting any deviation from the by-laws and no such resolution was pleaded as having been passed. Further, the claimant did not plead the actual performance of the works required to be done. According to the defendant the works were not in fact competently done or completed.
The defendant further contended that the alleged modification of the unsigned draft contract at clause 3 as mentioned in the alleged letter of award was ineffective to exclude clauses 3.2 and 3.3. The result of this was that the defendant was entitled to withhold payment until it was satisfied that the works had been competently completed. The alleged completion certificate upon which the claimant relied was not a document duly signed in accordance with the required by-laws. Therefore, it does not bind the defendant company. Further the company was never provided with an opportunity to inspect the works or approve them. As a result, the alleged completion certificate did not represent the company's approval as per the alleged contract. The alleged completion certificate was described as not binding in law.
The defendant further contended that the alleged contract is void or illegal from its inception as being against public policy. The board and management of the defendant failed to follow the requirements of the State Enterprise...
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