PacLII Home | Databases | WorldLII | Search | Feedback

High Court of Fiji
You are here:  PacLII >> Databases >> High Court of Fiji >> 2009 >> [2009] FJHC 153

Database Search | Name Search | Recent Decisions | Noteup | LawCite | Download | Help

Pathak v Sami [2009] FJHC 153; HBC168.1998L (24 July 2009)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION


Civil Action No. HBC 168 of 1998L


BETWEEN:


LAXMI CHANDRA PATHAK (f/n Jagdish Sharma) and SHERIN VANITA PATHAK (f/n Micheal Dass) both of Lautoka, Fiji, Landlords.
Plaintiffs


AND:


NARAYAN SAMI (f/n Armogam) of Tavakubu, Lautoka trading as A S N Builders, Building Contractor.
Defendant


FINAL JUDGMENT


Of: Inoke J.


Counsel Appearing: Mr. Faiz Khan for the Plaintiffs.
Ms. M. Muir for the Defendant.


Solicitors: Yash Law for the Plaintiffs.
Mishra Prakash & Associates for the Defendant.


Date of Hearing: 23/1/07
Date of Judgment: 24/7/09


INTRODUCTION


[1] The Plaintiffs are the husband and wife owners of a ‘Housing Authority Lease’ in Lautoka. They engaged the Defendant building contractor to build a residential dwelling on their land. The Plaintiffs allege that in breach of the building contract the Defendant failed to complete the dwelling and abandoned it. The Plaintiffs also allege that the Defendant unlawfully removed the whole roof and converted it to his own use.

[2] The Plaintiffs filed a Writ of Summons on 4 June 1998 against the Defendant claiming for:

1. An order restraining the defendant, whether by himself or his servants or workmen or agents to otherwise howsoever from doing the following acts or any of them, that is to say, proceeding with erection of a house now in course of construction in Lautoka and from interfering and intermeddling with the plaintiffs or their servants or workmen or agents in erecting and completing the same;


2. The return of the building materials unlawfully removed and detained by the defendant and converted to his own use, or their value in the sum of $13,160.00 under paragraphs 5 and 6 hereof;


3. Damages for the said detention and conversion of the building materials under paragraphs 5 and 6 hereof;


4. Damages to be quantified at the trial;


5. Further or other relief;


6. Costs of the action.


[3] The Defendant denies the claim saying that he was ‘locked out’ of the site by the Plaintiffs and counter-claims for $7,630 being the value of certain items belonging to him which he alleges were left on site and which the Plaintiffs stopped him from retrieving, plus unpaid contract sums totaling $14,540, as well as damages and costs.

[4] The matter went to trial on 23 and 24 January 2007.

[5] Unfortunately, the trial Judge was not able to write and deliver the judgment and the matter lay dormant since.

[6] I became seized of the matter in July 2009 and on my direction the Registry wrote to the solicitors involved on 8 July 2009 seeking their views as to how they wished the matter to be dealt with i.e. (a) by hearing de novo, or, (b) judgment to be delivered by me based on the trial Judge’s comprehensive notes taken at the hearing, or, (c) the matter be discontinued and struck out.

[7] Wisely and properly, in my view, when the matter was called before me on 13 July 2009, both Counsel consented to my delivering judgment based on the trial Judge’s notes and the trial papers and Counsels’ submissions.

[8] This judgment is delivered under those circumstances.

[9] It is my judgment that the Plaintiffs’ claim fails and judgment be entered for the Defendant’s counter-claim for $14, 540.00 and costs of $2,000.00.

[10] My reasons follow.

THE CASE HISTORY


[11] The Writ and Statement of Claim was filed on 4 June 1998. A Defence and Counter-claim was filed on 12 August 1998. On 6 June 2000 the Defendant filed a Defence and Amended Counter-claim. The Reply to the Amended Counter-claim was filed on 10 January 2001. The Order on Summons for Directions was made on 6 June 2001. Minutes of PTC was filed on 15 August 2001. The Defendant died on 15 July 2001, which seems to have delayed the further prosecution of the claim, and the Administratrix of his estate was substituted as defendant on 5 April 2002. The then solicitors for the Plaintiffs withdrew their services by notice to the Plaintiffs and advised the Defendant’s solicitors accordingly. In March 2004 the Defendant’s solicitors wrote to the High Court Registry requesting the matter be listed for assignment of a hearing date. The Plaintiff’s new solicitors made contact with the Defendant’s solicitors in April 2005 although the Notice of Change was not filed until November 2005. The Plaintiffs failed to progress their claim in a timely fashion and on 26 October 2005, Justice Connors, in a hearing where neither the Plaintiffs’ nor their solicitors appeared, struck out the Plaintiffs’ claim for want of prosecution and entered judgment for the Defendant’s counter-claim for $27,170.00 and costs of $5,000: Pathak v Sami [2005] FJHC 327; HBC0168.1998L (26 October 2005).

[12] By Summons filed on 28 November 2005 the Plaintiffs’ new solicitors sought to set aside the 26 October 2005 Judgment and re-instate the Statement of Claim. The application was not heard until 28 March 2006 and on 7 April 2006 Connors J. set aside the 26 October 2005 Judgment and re-instated the Plaintiffs’ Statement of Claim. The matter was adjourned to 28 July 2006 to fix a hearing date. The matter was eventually heard on 23 January 2007. Submissions by Counsel were filed by the end of March 2007. I have set out the case management history of this matter in detail which I hope will explain some of the delays experienced in this Court in bringing matters to an early conclusion and hopefully lead to better case management in future.

THE AGREED AND ADMITTED FACTS


[13] The Pretrial Conference Minutes lists the agreed facts as follows:
  1. The plaintiffs are the registered proprietors of all that piece and parcel of land comprised and described in Housing Authority Sublease No. 212764 known as Lot 3 DP 4981 at Tavakubu, Lautoka containing twenty five perches.
  2. The defendant was at all material times a building contractor trading under the name and style of "A S N Builders".
  3. The Building Contract price under the contract dated 27/10/77 and Contract Variation dated 21/4/98 was $8500.00.

[14] There was no dispute that the contract documentation was made up of the Contract dated 27 October 1997 and Contract Variation dated 21 April 1998, collectively the "Contract".

[15] The Defendant in his Defence[1] admitted that he removed roofing iron, purlins, insulated paper, strapping, gutter, flushing and ridge caps, the total value of which was about $8,000 and not $10,300 as claimed by the Plaintiffs.

[16] The Completion Date was 8 months from 27 October 1997 i.e. by 28 June 1998.

THE MAIN ISSUE IN DISPUTE


[17] What was not agreed however was whether either of the parties had breached the Contract.

THE EVIDENCE AT THE HEARING


[18] The trial took 2 days and 4 witnesses were called.

[19] As is the usual case for trials in Fiji, the trial Judge has to write his or her own notes of evidence as there are no recording devices or transcribing services available or operating. I give full credit to the trial Judge for her full and comprehensive notes of the oral evidence, without which the Court would not have been able to proceed in this way. I am relying on those notes as if they are my own. I take into account as well, the trial Judge’s comments and observation of the witnesses and the evidence as noted. I have also considered Counsels’ submissions and the affidavit material that had been tendered by consent.

THE PLAINTIFFS’ EVIDENCE


[20] The First Plaintiff gave evidence at the trial. He said that he knew the Defendant beforehand. He bought the block of land, paid it off then mortgaged it to build their home. The Plaintiffs, as owners, entered into a contract with the Defendant, as contractor, dated 27 October 1997 in which the contractor agreed "to construct a residential dwelling house on the top floor on (the owners’ land) in accordance with the plans approved by the Lautoka City Council". The construction work was to start on 27 October 1997 and be completed within 8 months for the sum of $85,000.00 (the "Contract Sum"). By a Variation of Building Agreement dated 21 April 1998 the parties agreed that if the contractor did not complete the work within 8 months, he would pay a penalty of $40 per day to the owner. The purpose of this variation, according to the First Plaintiff, "was to put a time frame on the contractor".

[21] The Contract Sum was to be paid over the construction period by way of progress payments. The Defendant on completion of each stage would write to the Building Supervisor, A. Kumar & Associates, (hereinafter "Supervisor") who would then write to the Plaintiffs certifying payment and they in turn would write to their bank to release payment. All progress payments made in this way were paid to the Defendant according to his evidence. In about March 1998, the Defendant, falling into financial difficulties, requested from the Plaintiffs an advance payment which the Plaintiffs agreed for the purchase of material for the roof so that construction work could continue. A quotation for $7,196.00 from Carpenters Hardware was obtained and payment approved for the purchase of materials.

[22] He could not remember when the Defendant removed his roof but he did remember that it was on a Friday night and he came to know of it at 9 or 10 o’clock of the following Saturday morning. The roof was completed at the time. He put security on his land as he was frightened the Defendant would do more damage to the unfinished house. He then engaged another builder to finish it off. He paid $65,000.00 to the new builder to complete his house, after leaving out some work under the original contract. He had already paid $41,000.00 to the Defendant. He could only borrow an additional $20,000 to complete his house so he had to leave some of the work out. He left work out of the original contract worth about $20,000. But there was new work such as fencing which was done by the new builder worth $15,000.

[23] In cross examination, the First Plaintiff agreed that there were variations to work, not in the original plan, that were requested by him or as required by the Lautoka City Council. He also agreed that some of these variations and costs were agreed to verbally between him and the contractor. The advance of $7,196.00 was for roofing materials. The work for the driveway was already done. He denies agreeing to the additional work on the arch columns and confirmed that he had not paid the $1177 quoted by the Defendant. He confirms having agreed on payment for progress claims 6, 8 and 16 totaling $7,797.50 but did not pay it. He denied having received any of the Defendant’s quotations for the additional works and confirmed that he did not pay any of the amounts claimed by the Defendant for the balance under the contract or the additional variations (3), all totalling $14,540.00.

[24] In respect of the Defendant’s claim for material left on the site, the First Plaintiff said that the only things left on site were some very old drums, old planks and rotten timber ladders that were of no value.

[25] The Plaintiff’s next witness was the new builder. He gave a quotation to complete the Plaintiffs’ building for $65,688.00, completion within 110 days, with some of the original contract work left out. He worked according to the old plan and Specification. He completed the Plaintiffs’ house, which was 60% complete when he started, and has been paid the full amount. His estimate of the value of that completed work was $70,000 approximately. He had to install a new roof, as per the original plan. The rafters were in place but some of the purlins were damaged. Material cost was $7,000 and labour cost was $6,000. The fence was built for $15,000 and the value of deleted items of work $5,000.

THE DEFENDANT’S EVIDENCE


[26] The Defendant’s case was that the variations claimed here were done but not paid for by the Plaintiffs. They met and the Plaintiffs were given a time frame within which to pay but they did not pay so the Defendant stopped work. The Plaintiffs then placed security on site and the Defendant was locked out.

[27] The Defendant’s son was called as a witness. He was involved in the construction work as assistant to his father, learning the ropes. He was 21 at the time. He said there were variations for additional work. He explained how the variations came about. For example, for the basement floor, the Lautoka City Council required a tie beam so they relayed the message to the owner, he requested it and they carried out the work as a variation. The owner did not like the kitchen window frame as built according to the plan because it was too big so the owner requested that they make it smaller which they did. They built the "A" roof, according to the plan. After building it, the owner wanted it changed because when seen from the road, it did not match. So they demolished a portion and enlarged it. Similarly for the arch. After building it according to the plan, the owner did not like it, saying it was too small, and asked them to enlarge as well as increase its size which they did.

Variations


[28] The procedure for variations was for the builder to write to the Supervisor as per the Contract and when the Supervisor gave the go-ahead the builder went ahead and did the work. The procedure for payment for variations was for the builder to give a letter for the variation to the Supervisor who would then liaise with the owner, but if there was no Supervisor, the builder gave its letter directly to the owner. The Supervisor would inspect the work then the builder’s letter and the Supervisor’s letter of approval would be signed off and the owner then gave them to the owner’s bank for payment.

[29] The Supervisor’s letter, which I will refer to as "instruction", is a standard form on the supervisor’s letter head "A. Kumar & Associates", with the following words:

"PROPOSED RESIDENCE FOR MR LAXMI CHANDRA PATHAK...


The above building is under construction and I inspected the job as per plan and specification.


THE FOLLOWING VARIATIONS AND ADDITIONAL WORKS ARE AS FOLLOWS ...


[Description of the variation work]


I hope the contractor will complete the above extra work as agreed by the owner and the contractor under my supervision.


Signed: A. Kumar"


.....................


The Description of the variation work would often be followed by the words: "as per our and owners advice" or "advice by the owner" or "by owners advice" or "request by the owner" and "as per owners advice and design by owner during my presence".


[30] The variation for the roof was approved by the Supervisor’s instruction dated 8 April 1998.[2] The builder’s letter dated 9 April 1998[3] gave the quotation for this work as $3,655.80.

[31] The variation for the works on the column arches was approved by the Supervisor’s instruction dated 29 April 1998[4]. The builder quoted for the variation in his letter to the owner dated 30 April 1998[5] for $1,177.00. This work was additional work requested by the owner and carried out but not yet paid for.

[32] The variations for raising the kitchen window, additional plaster work to columns and additional ceiling frame work were approved by the Supervisor’s instruction dated 11 May 1998.[6] It was quoted for in a letter from the builder to the owner dated 13 May 1998[7] for $147.50, $1573.80 and $7,385.20, respectively, totalling $9,106.50. This work also was requested by the owner, not in the original plan, done by the builder but not yet paid for by the owner.

[33] The total of these three variations was $13,939.00.

Progress Claims


[34] According to the Contract,[8] Progress Payment 16 was for construction of driveway/crossings/ hardstands. The contract sum was $1,455.00. The builder’s Progress Claim was dated 9 January 1998.[9] The work has been done but not yet paid for.

[35] Progress Payment 6 was for construction of the roof.[10] The contract sum payable was $6,450.50. The owner paid in advance $3,600 so a balance of $2,850.50 is still owing.

[36] Progress Payment 8 was for plasterwork for the first floor basement, contract sum of $3,492.00. The builder asked for payment for Progress Claims 6, 8 and 16 by letter dated 28 April 1998.[11] The total for these claims was $7,797.50.

[37] The Defendant’s son gave evidence that the balance of $601 was still owing after completion of the roof. This was the balance after adjustment for the previous claims. He and his father requested payment but the owner dragged his feet. The owner was given till Friday 3.00pm to pay up. The owner called them and they met. The owner said that he did not like the colour of the roof and asked them to change it. They asked the owner to pay up so that they could pay for the new roof. The owner wanted them to do the work first before payment. They told him that they would remove the roof and when they were paid they would buy the new roof and put it on again. It was to be the same trimtech roof with a different color. They removed the roof and took it to their yard. The roofing material was not reusable because it had holes in it. On the next morning, the owner and the supervisor came on site and the owner said that he was going to pay the Defendant. They then went to the office of the Plaintiffs’ lawyer where they made an agreement. But two or three days later the owner put security on the site.

[38] In cross examination he said that he was present when the owner told them to remove the roof. He said that they went to the lawyer’s office after the roof was removed. As for the reason they removed the roof at about 6.30 that night he said: "the owner said change the roof and we’ll pay all, so we said we’ll remove the roof tonight." He maintained that the roof was removed at the request of the owner. He said it was possible to paint it in the colour that the owner wanted but the contract required it to be factory coloured. They removed the whole roof, purlins, roof paper but not the frames. The guttering was removed too. The insulating paper was removed so that it would not blow away. The paper was to be reused with the new roof. They removed the roof on Friday 16 May 1998.

[39] The second witness called for the Defendant was the Building Supervisor. He said he prepared the Specification which was approved by the Town Council. He also prepared the building plan which was also approved. He confirmed that variations on more than one occasion were approved verbally by the owner in front of him. He confirmed that he gave the instruction of 8 April 1998[12] for the variation for the resetting of the roof which was approved by the owner and the work done. He wrote to the bank for payment and to the Council. He also confirmed that the work for the kitchen window and the ceiling were variations instructed by him on 11 May 1998[13], approved by the owner and done by the builder. Similarly, for the variation for changing the arches.[14]

[40] He remembers the roof being completed and that there was some dispute about the additional payout. This was about a month before the roof was taken off. The owner refused to give the additional money. On one Saturday he was passing by and saw there was no roof on the house so he went and told the owner. He also spoke to the Defendant who told him that he had not received his money and the owner did not like the colour of the roof. He remembers having a discussion on site with the builder and the owner. When asked whether the financial difficulties of the Defendant constrained him from carrying out the work, the supervisor’s answer was: "difficulties were caused by additional work." He said that work was progressing quite well until the dispute a few days before the roof was removed.

[41] Also tendered by consent as evidence were the First Plaintiff’s affidavit of 4 June 1998 and the Defendant’s affidavit in reply of 24 June 1998. For completeness, I have also read these affidavits and extract the following facts. Construction commenced on 27 October 1997. On 28 April 1998 the Defendant wrote to the Plaintiffs asking for payment of $7,797.50 being payment for Progress Claims 6, 8 and 16. A payment of $3,600 was made to the Defendant on 11 February 1998 ($1,000) and 1 April 1998 ($2,600) for the purchase of timber for the roof framing. The Plaintiffs agreed that payment of $7,196.96 by them to Carpenters Builders on 29 April 1998 for roofing material was to be deducted from future progress payments. The roofing material was delivered to site on 30 April 1998. The roof work was completed on 11 May 1998 according to the Defendant but the First Plaintiff says 5 May 1998. There was a meeting between the First Plaintiff, the Supervisor and the Defendant on 18 May 1998 wherein it was agreed that the Plaintiffs would get a loan and settle the outstanding payments of $12,818.25.

ANALYSIS AND FINDINGS OF FACT


[42] After due analysis of the evidence and the documentary material I find the evidence called on behalf of the Defendant more credible. I make the following finding of material facts:
  1. The three variations claimed by the Defendant were requested by the Plaintiffs.
  2. The three variations were approved verbally by the Plaintiffs in front of the Supervisor.
  3. The three variations were authorised by the Supervisor in writing in accordance with clause 8 of the Specification.
  4. There was a course of conduct throughout the duration of work that the cost of valuations were notified to the Plaintiffs by a letter of quotation from the Defendant before the work was done. There were no written confirmations by the Plaintiffs that they agreed to them but the variation works were done and paid for without objection. In the case of the three variations in question, the Defendant’s quotations were given within a day or two of the Supervisor’s instructions. The work has been done. I infer from these established facts that the Plaintiffs must have verbally or otherwise agreed to the cost of the three valuations in question either directly with the Defendant or with the Supervisor. The Supervisor acted as the Plaintiffs’ agent for this purpose.
  5. That work was done but not paid for.
  6. The total amount due was $13,939.00.
  7. The roof was built in accordance with the plan and completed on 5 May 1998.
  8. The Plaintiffs asked the Defendant to remove the roof. There was no evidence that the matter was reported to the Police. I find it unusual that the matter was not reported to the Police if the roof was removed unlawfully as alleged by the Plaintiffs. The only explanation I can give is that the roof was removed under the instructions of the Plaintiffs.
  9. The Plaintiffs only wanted the roof removed because they did not like its colour, rather than because of poor workmanship by the Defendant. The Trial Judge’s remark noted against this part of the evidence was: "unbelievable". I find it extraordinary too.
  10. The Plaintiffs and accepted the roof as built. The Plaintiffs therefore accepted the work covered by Progress Claim 6.
  11. The Plaintiffs also accepted the other work done for Progress Claims 8 and 16.
  12. The First Plaintiff did request the Defendant to remove the roof.
  13. The First Plaintiff agreed to pay the then balance of progress payments and variations so that the Defendant could buy the new roofing material to complete the Plaintiffs’ house.
  14. The Defendant removed the roof and other material on the faith of this agreement and took them to his yard and kept them.
  15. The Plaintiffs reneged on their promise to pay the balance of progress payments and variations
  16. The Plaintiffs locked the Defendant out of the site after 15 May 1998 and prevented the Defendant from completing the works.
  17. The Plaintiffs house was 80% complete when they locked the Defendant out.
  18. The Completion date for the works (28 June 1998) had not passed when the Defendant was locked out.
  19. The Plaintiffs tried to make much of the Defendant’s financial difficulties but I find that they failed to prove that the Defendant could not have completed the Contract.
  20. The Plaintiffs engaged another builder to complete the Plaintiffs’ house for $65,688.00, which included a fence valued at $15,000 of additional work to the original contract work. There was $5,000 value of work left out of the original works.

THE LAW


[43] The starting point is the Contract. The Plaintiffs as "Owners" and the Defendant as "Contractor" entered into a "Memorandum of Agreement" dated 27 October 1997 together with a "Variation of Building Agreement" dated 21 April 1998 (the "Contract") which required the defendant to "construct a Residential House on the top floor on" the plaintiffs’ land "in accordance with the plans approved by the Lautoka City Council" for the "contract price of $85,000".

[44] The Contract contained the following material terms (reproduced here exactly as they are typed up in the Contract):
  1. "The payment by the Owners to the Contractor will be made by way of progress payments upon application by the Contractor and approved by the appointed Building Supervisor A. Kumar & Associates subject to the satisfactory progress of the stage of work stated below." The Contract then sets out the 17 stages of the works and the amounts that were to be paid for those various stages. [clause 1]
  2. "The Contractor shall upon and subject to these conditions carry out and complete the works shown upon the said plan." [clause 3]
  3. "The building is to be completed by the Contractor within eight (8) months from the date of possession of the site." [clause 4]
  4. "The Owner will give possession of the site to the Contractor on the 27th day of October, 1997." [clause 5]
  5. "If the Contractor does not complete the work within eight (8) months from the date of commencement i.e. 27/10/97 then he shall pay a penalty of $10.00 (TEN DOLLARS) per day to the Owner." [clause 6]. The $10 penalty was subsequently varied by the Variation of April 1998 to $40.00.
  6. "All instructions issued by the Owners shall be issued in writing. Any instructions orally shall be of no immediate effect, but shall be confirmed in writing by the Contractor to the Owners within seven (7) days." [clause 9]
  7. "The Contractor shall confirm (sic) to the provisions of any Acts of Parliament or any rules and orders or statutory instruments and to the regulations and by-laws of any Local Authority and of any statutory undertakings with those system the structure is connected and shall before making any variations from the plans that may be necessitated by so confirming give to the Owners written notice specifying the variations proposed to be made and the reasons for making it and apply for instructions thereon. The Owners shall not be liable for damages to the property real or personal due to any negligence, omission or default of the Contractor, his agents, his servants or any sub-contractor, or to any circumstances within in his control." [Clause 10]
  8. "If the Contractor fails to proceed within the work with reasonable diligence or at any time during the period of contract wholly suspend the work or refuses to comply with the reasonable direction to the Owners, by reason of which the works are materially effected and which default continues for a period of fourteen (14) days after notice has been given in writing specifying the default, or should the contractor enter into liquidation or propose any compensation with its creditor for the settlement of his debt, the Owners may without prejudice to any of his right or remedies determine the employment of the Contractor by notice in writing." [clause 11]
  9. "The whole of the materials and workmanship are to be the best of their respective kinds and to comply with the specifications unless otherwise ordered by the Owners and sample of the materials shall be submitted to the Owners for the approval if requested. The Contractor shall be responsible for the setting out and the proper and efficient work in accordance with the intent and meaning of the plans and specifications. Any variation between drawings shall be notified to the Owners who shall decide which is to be followed and determine any discrepancy arising there from." [clause 13]
  10. "In the event of any dispute arising in connection with the interpretation of the terms and conditions herein or the rights of the parties under the contract the owners or the Contractor shall have the right to refer the dispute to arbitration under the terms and conditions of the Arbitration Act." [clause 16]
  11. "If either party intends to terminate this Agreement to continue further then the intended party has to pay the sum of $5,000.00 (FIVE THOUSAND DOLLARS) as fine and damages." [clause 18]

[45] There was also a Specification for the works, which formed part of the contract documents, prepared by A. Kumar & Associates, architectural and structural engineers, and stamped "Approved by the Lautoka City Council" on 19th September 1996, with the following material terms:
  1. "REGULATIONS AND STANDARDS: The whole of the works shall be carried out in conformity with the relevant requirements of the Lautoka City Council." [clause 2].
  2. "EXTRA WORK: No extra work will be allowed unless authorised in writing by the Arch/Designer, and no extra work shall be performed until its value has been agreed upon in writing." [clause 8].
  3. "MATERIALS THE PORPERTY OF THE EMPLOYER: When the contractor shall have received the payments under any certificates in which the Arch/Designer shall have stated that he has taken into account the value of any unfixed materials intended for the works and placed by the contractor hereon, all such materials shall be come the property of the employer and shall not be taken away except on the written authority of the Arch/Designer or the Agent, the contractor shall be liable for any loss or damage to such materials." [page 3, para 7]

[46] There was also a plan but it was not tendered or used as evidence.

[47] It is my opinion that the Building Contract in this case is one for completion within 8 months of commencement i.e. by 28 June 1998, a fixed date of completion with no extensions of time allowed. Variations of the contract works were allowed but no extensions of time would be granted for any resulting delays.

[48] As for the contract payments, it is my opinion that Progress Payments became due and payable once the Building Supervisor inspected and approved them. The same applied to payments for variations. Contract payments were to be made as when the various stages of the works were completed.

[49] This is not one of those cases where the Defendant builder would only be entitled to payment on completion. In other words this is not an "entire contract".

DETERMNATION OF THE ISSUES


[50] It is necessary for me to decide which of the parties were in breach of contract. In Photo Production v Securicor [1980] UKHL 2; [1980] AC 827, a decision of the House of Lords, Lord Diplock[15], explained the parties obligations under a contract as follows:

"A basic principle of the common law of contract, ..., is that the parties to a contract are free to determine for themselves what primary obligations they will accept. They may state these in express words in the contract itself and, if they do, the statement is determinative; but in practice a commercial contract never states all the primary obligations of the parties in full; many are left to be incorporated by implication of law from the legal nature of the contract into which the parties are entering. But if the parties wish to reject or modify primary obligations which would otherwise be so incorporated, they are fully at liberty to do so by express words.


Leaving aside those comparatively rare cases in which the court is able to enforce a primary obligation by decreeing specific performance of it, breaches of primary obligations give rise to substituted or secondary obligations on the part of the party in default, and, in some cases, may entitle the other party to be relieved from further performance of his own primary obligations. These secondary obligations of the contract breaker and any concomitant relief of the other party from his own primary obligations also arise by implication of law – generally common law...The contract however, is just as much the source of secondary obligations as it is of primary obligations; ...


Every failure to perform a primary obligation is a breach of contract. The secondary obligation on the part of the contract breaker to which it gives rise by implication of the common law is to pay monetary compensation to the other party for the loss sustained by him in consequence of the breach; but, with two exceptions, the primary obligations of the parties so far as they have not yet been fully performed remain unchanged. This secondary obligation to pay compensation (damages) for non-performance of primary obligations I will call the "general secondary obligation". It applies in the cases of the two exceptions as well.


The exceptions are: (1) Where the event resulting from the failure by one party to perform a primary obligation has the effect of depriving the other party of substantially the whole benefit which it was the intention of the parties that he should obtain from the contract, the party not in default may elect to put an end to all primary obligations of both parties remaining unperformed. (If the expression "fundamental breach" is to be retained, it should, in the interests of clarity, be confined to this exception.) (2) Where the contracting parties have agreed, whether by express words or by implication of law, that any failure by one party to perform a particular primary obligation ("condition" in the nomenclature of he Sale of Goods Act 1893), irrespective of the gravity of the event that has in fact resulted from the breach, shall entitle the other party to elect to put an end to all primary obligations of both parties remaining unperformed. (In the interests of clarity, ..., "breach of condition" should be reserved for this exception.)


Where such an election is made (a) there is substituted by implication of law for the primary obligations of the party in default which remain unperformed a secondary obligation to pay monetary compensation to the other party for the loss sustained by him in consequence of their non-performance in the future and (b) the unperformed primary obligations of that other party are discharged. This secondary obligation is additional to the general secondary obligation; I will call it "the anticipatory secondary obligation."


In cases falling within the first exception, fundamental breach, the anticipatory secondary obligation arises under contracts of all kinds by implication of the common law, except to the extent that it is excluded or modified by express words of the contract..."


[51] It is clear that the Plaintiffs did not want to pay the Defendant for the claims already made and did not want the Defendant to complete their house by "locking him out" and engaging a new builder. The Plaintiffs have "made quite plain their own intention not to be bound by it": per Lord Atkin in Spettabile v Northumberland Shipbuilding Co ( 1919) 12 LT 628, 634. The Plaintiffs were in breach. The breach here fell within the first exception mentioned by Lord Diplock in the above passage. The Plaintiffs were in "fundamental breach" of Contract, within the meaning of the above passage. The "anticipatory secondary obligation" has not been excluded by the Contract.

[52] In Lodder v Slowey [1904] UKLawRpAC 38; [1904] AC 442 at 452 - 453, Lord Davey, in delivering the judgment of the Privy Council said this:

"Their Lordships hold that a party to a contract for execution of works cannot justify the exercise of a power of re-entry and seizure of the works in progress when the alleged default or delay of the contractor has been brought about by the acts or default of the party himself or his agent: Roberts v Bury Improvement Commissioners L. R. [1870] UKLawRpCP 19; 5 C.P. 310.


Their Lordships also agree with the learned judges as to the proper measure of damages, or (more accurately) as to the right of the respondent to treat the contract as at an end and sue for work and labour done instead of suing for damages for breach of contract."


[53] Further, the Plaintiffs could not have relied on clause 11 of the Contract to terminate it. Neither could they exercise their right to terminate under clause 18.

ARE THE PLAINTIFFS ENTITLED TO THEIR CLAIM?


[54] The Contract was terminated for fundamental breach. The Defendant was relieved of future performance, i.e. he no longer had an obligation to complete the Plaintiffs’ house. The Plaintiffs claim for the extra cost to complete their house therefore fails.

[55] Having found that the Plaintiffs gave instructions for the Defendant to remove the roof their claim for conversion and detinue fails. All that needs to be done is to adjust for the value of the roofing material in the Defendant’s counter-claim. The claim for injunction is no longer in issue. The Plaintiffs’ claim fails on all accounts.

IS THE DEFENDANT ENTITLED TO HIS COUNTER-CLAIM


[56] It is clear from these case authorities that termination of the Contract did not relieve the Plaintiffs of their "general secondary obligation" and their "anticipatory secondary obligation" i.e. the Plaintiffs’ obligation (1) to make good the past loss caused by the breach, namely, payment for the outstanding claims, and (2) to make good damages for the loss of future performance, namely, the profit that the Defendant missed out on for that part of the unperformed contract work.

[57] The Defendant claimed for damages in its counter-claim which would have brought himself within the second limb of loss but he did not provide any evidence of the profit that he lost for that part of the unperformed contract work. So I make no award for it.

[58] The second part of the Defendant’s counter-claim, using the terminology of Lord Diplock in Photo Production (supra), is for breach of the Plaintiffs’ "general secondary obligation". I therefore need to decide whether the Defendant is entitled to the balance of progress payments and variations, leaving aside for the moment his claim for the value of material left on site.

VARIATIONS


[59] Clause 8 of the Specification is the relevant clause. It says that "no extra work shall be performed until its value has been agreed upon in writing". The clause does not say "agreed upon in writing signed by the owner or the architect/designer." It is my opinion that the clause does not mean that the owner must sign the document. I believe the intent of the clause is that so long as there is some writing containing the value of the variation and the owner agrees to it, albeit verbally, then that is sufficient. It would be quite impracticable if the builder had to search out the owner each and every time a variation arose to obtain his signature.

[60] I have found as a matter of fact that the Plaintiffs had agreed to the value of the three variations prior to commencement of the work by the Defendant. Each variation had been quoted for in writing within a day or two of the Supervisor’s instructions. It is my opinion therefore, that the three variations in question in this action have authorised and performed in accordance with the terms of the Contract and Specifications. The work has been done and the Plaintiffs must now pay for them. The amount payable is $13,939.00, rounded down.

[61] Even if they were not due in strict compliance with the Contract terms, the Defendant can recover payment on a quantum meruit basis and/or the Plaintiffs are estopped from denying liability.

BALANCE PROGRESS PAYMENTS


[62] Progress Claims are paid upon application by the Defendant and approval by the Supervisor.

[63] In respect of Progress Claims 6, 8 and 16, the Defendant had applied for payment by letter dated 28 April 1998 to the Supervisor.

[64] There was no evidence that the Supervisor had approved the payment of those claims. However, I have found as a matter of fact that the Plaintiffs had accepted the work claimed in those Progress Claims.

[65] The Defendant took the old roof bought by the Plaintiffs for $7,196.00. He also took other material. His son said the roofing material had screw holes and so of reduced value. There was no evidence as to this value. I therefore make no adjustment for this sum. The balance of the progress payments is $601.

MATERIALS CLAIM


[66] As for the Defendant’s counterclaim for materials left behind on site I accept the Plaintiffs evidence that whatever was left was of no significant value.

FINAL OUTCOME


[67] The Final outcome is that I dismiss the Plaintiffs claim and give judgment for the Defendant for its counter-claim for the balance of progress claims and variations totalling $14, 540.00.

INTEREST


[68] There is no claim for interest and even if there was I would not grant it because the delay in bringing this matter to court and hearing rested mainly with the parties and their legal advisers.

COSTS


[69] The Defendant has won and is entitled to costs on a party-party basis. The facts and law are not unusually difficult. The long delay in bringing the matter to trial has been caused by the procrastination of the parties and their advisers and I make no allowance for the numerous adjournments and court attendances. The trial went for two days and four witnesses were called. The documentary evidence was quite small. I therefore award costs to the Defendant for $2,000.00 to be paid within 28 days.

ORDERS


[70] I therefore make the following Orders:
  1. The Plaintiffs’ claim is dismissed.
  2. Judgment is entered for the Defendant in the sum of $14, 540.00.
  3. The Plaintiffs pay the Defendant’s costs of $2,000.00 within 28 days.

Sosefo Inoke
Judge


At Lautoka
24 July 2009

[1] At para 4.
[2] Defendant Exhibit 10.
[3] Defendant’s Document 18.
[4] Defendant Exhibit 11.
[5] Defendant Exhibit 4.
[6] Defendant Exhibit 12.
[7] Defendant Exhibit 5.
[8] Clause 1(16).
[9] Defendant Exhibit 7.
[10] Clause 1(6).
[11] Defendant Exhibit 8.
[12] Defendant Exhibit 10.
[13] Defendant Exhibit 12.
[14] Defendant Exhibit 11.
[15] At p 848F to 849G..

PacLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.paclii.org/fj/cases/FJHC/2009/153.html