Sen v Naidu [1979] FijiLawRp 39; [1979] 25 FLR 42 (29 March 1979)

[1979] 25 FLR 42

IN THE COURT OF APPEAL OF FIJI

BARAM SEN

v

GOVIND SWAMY NAIDU & ANOR

[COURT OF APPEAL (Marsack, J. A., Henry, J. A., Spring J. A.) 7, 29 March 1979]
Civil Jurisdiction

 

Contract – Award of damages – liquidated sum fixed - plaintiff may not recover that sum plus a further sum for actual loss.
 
R. D. Patel for Appellant
G. P. Shankar for Respondent
 
The appeal arose out of a building contract.
 
The facts need not be recited. They are set out in detail in the judgment. The contract had fixed the “liquidated and ascertained damages” for delay in completion of the contract. A question arose as to whether, if actual damages suffered were greater than the amount fixed by the contract, the injured party was entitled to recover a greater sum.
 
The Court concluded that in such circumstances, a plaintiff could not recover both the liquidated damages and also a sum concerning the actual loss sustained. The principle was that in the case of a sum fixed for liquidated damages, plaintiff may recover that precise amount only. The court reduced an amount awarded accordingly.
 
See also discussion as to Judges, discretion on costs. In this case the learned judge failed to exercise his discretion correctly.
 
Cases referred to:
 

Cellulose Acetate Silk Co. v. Widnes Foundry  (1933) A.C. 20.

Civil Service Co - operative Society Limited v. General Steam Navigation Limited  (1903) 2 K.B. 756.

Ritter v Godfrey  (1920) 2 K.B. 47.
 
MARSACK J.A:
 

JUDGMENT

 
In this case the appeal and the cross appeal are against a judgment of the Supreme Court delivered at Lautoka on the 3^rd July 1978 which decided issues arising from a contract entered into between the parties whereby the appellant, a builder, agreed to erect a house for the respondents upon the terms set out in the written contract.
 
The basic facts are not materially in dispute. On the 26 June 1974 the parties signed an agreement whereby the appellant contracted to erect “a dwelling and its appurtenances” on land belonging to the respondents at Nadi. The specifications attached to the contract were prepared by a draughtsman and were set out in great detail. The total price was fixed at $30,900, and Clause II in the contract laid down provided inter alia that the work was to be “fully completed” by the 15^th December 1974; and fixed $10 a day as liquidated damages for any delay beyond that date. However the certificate of completion and permit to occupy was not issued by the building surveyor of the Nadi Town Council until 26 March 1975.
 
In the Supreme Court the appellant took action against the respondent claiming moneys due under the contract amounting to, $6,740. This ,was made up of the balance of the contract price still unpaid, plus a sum of $1,420 for “extra work”, that is to say, work beyond what was specified in the contract but which was ordered by the respondents. The respondents counter – claimed for defective workmanship which they alleged appellant would not repair and which would cost them $4,563.74 to have rectified by other contractors. They also claimed damages at $10 a day as provided in Clause 5 of the contract, in respect of the delay in completion, and loss of earnings for the same period at $350 a month.
 
In his judgment the learned trial judge held that two items claimed by the appellant as extra work, and charged up for a total of $520, could not be allowed as they were really covered by the terms of the contact; but two items each of $450, for a double concrete driveway and the substitution of galvanised for wooden pipes, lay outside the contract and were properly chargeable to the respondents. In allowing this the learned trial judge held that clause 12 of the agreement, which provided that no extra work to be done except with the written consent of the respondent, had been waived by them. The $520 disallowed by the learned judge reduced the appellant’s claim to $6220, to which he was held to be entitled, less any sum allowed on the counter claim.
 
With regard to the counter - claim the learned judge allowed a total of $630 in respect of the defective workmanship, and for the delay in completion $1,890, being $930 under Clause 5 (93 days at $10 a day) and $960 for loss of rent. The deductions so allowed totalled, $2,520, thus reducing the amount due to the appellant from $6,220 to $3,700; and judgment was given in favour of the appellants for this amount without costs.
 
The grounds of appeal lodged by the appellant may be summarised thus:
 

(1) That the learned trial judge was in error in holding that the appellant was liable for 93 days’ delay in completion of the building;

 

(2) That in any event the learned judge was wrong in allowing both $930 as liquidated damages, and $960 as loss of rent, for the period of the delay;

 

(3) That the learned judge erred in disallowing a sum of $520 in respect of the claim for extra work;

 

(4) That the learned judge erred in deducting from the contract price a sum of $630, for defective workmanship;

 

(5) That as the appellant had substantially succeeded in the Supreme Court he should not have been deprived of his costs.
 
With regard to the first ground; Clause 5 of the written contract provides that if the work be not completed by the 15 December 1974,
 

“the Contractor shall pay or allow to the Owner a sum computed at the rate of $10.00 per day as liquidated and ascertained damages for delay, provided however that if the work be delayed by force majeure or by reason of exceptionally inclement weather or of authorised extras or additions or strikes or lock – outs a fair or reasonable extension of time shall be allowed, if the Contractor shall without delay expressly in writing request an extension.”
 
It is common ground that no written request for an extension of time was made by the appellant. Moreover, though evidence was given of some rainy days during the currency of the contract, there is no suggestion that the weather could have been considered as exceptionally inclement for that season. No other explanation was put forward to show that the admitted delay in completion of the building contract was justified to the extent that the provisions of Clause 5 would not apply. The learned trial judge allowed eight extra days in respect of the time required for the construction of the double concrete driveway which was not included under the contract, but which was constructed by the appellant at the request of the respondents. This, in our opinion, was reasonable. The question of the actual period of the delay, held by the learned trial judge to be 93 days, is dealt with later in this judgment. In the result, nothing has been shown to establish the appellant’s exemption from liability for a delay of 93 days, with the consequence as set out in Clause 5. This ground of appeal accordingly fails.
 
The second ground of appeal must, in our view, succeed. In the written contract, the parties fixed the “liquidated and ascertained damages” for delay in the completion of the contract. As is said in Mayne on Damages, 11^th Ed. p. 157:
 

“Where the sum consists of liquidated damages for breach of the agreement, fixed and agreed upon between parties, that sum is the ascertained damage.”
 
The mere fact that the actual damage suffered is greater than the amount fixed by the contract does not entitle the injured party to recover a greater sum: Cellulose Acetate Silk Co. v. Widnes Foundry  (1933) A. C 20. It is true that in some cases it has been held that a plaintiff could recover more than the amount fixed in the contract as a penalty; but in no case that we have been able to find has it been held that a plaintiff could recover both the liquidated damages and also a sum covering the actual loss sustained. The principle is that in the case of a sum fixed as liquidated damages, a plaintiff may recover that precise amount. We therefore reduce the amount allowed under this head from $1,890 to $930.
 
As to the third ground: the learned trial judge found that the two items in respect of which $520 was claimed could not properly be regarded as extras. He said:
 

“I am satisfied that they are provided for in the contract.”
 
With respect we are unable to agree that these two items were provided for in the contract. In the, course of his evidence the appellant stated:
 

“Owners wanted to change tiles to designed tiles. We agreed on $450.

Also wallboard from plain masonite to designed board. The difference was agreed on as $70.”
 
Respondent Govind Swami Naidu gave, evidence in the following terms:
 

“Plaintiff showed me some very inferior types of tile. I did not agree to tiles he selected.

I went and selected tiles myself. I gave samples of my selection to plaintiff.

He ordered tiles I selected.

“He did not say I would have to pay extra for them;

I did not tell plaintiff to put in designed wall boards instead of plain boards.

There are twelve designed boards in the house.”
 
Later in the course of his cross - examination this respondent said:
 

“Specifications provided for Vinylflex floor tiles - I don’t know whether they were plain or designed tiles.

The ones in use in my home are designed tiles.

I brought samples of tiles. I marked and gave items to him.

I did not ask for change in tiles nor did I agree to pay, the difference in price.

Yes. Wall boards in specifications were plain, whereas plaintiff put in designed boards done not at my request.”
 
In the specifications Clause 9 provides that at the final adjustment, prime cost vouchers or receipts must be available for inspection so that, the contract sum may be adjusted in accordance with the amounts actually expended. A schedule of prime cost items set out in the specifications provides for floor tiles in the following terms:
 

"1" × "1" Unglazed tiles provided to

the floor of W.C.’s and shower                                         $0.50 cents sheets

Vinylflex floor tiles 9´´ × 9´´ provided to

The 1^st and ground floor                                                     $2.10 sq. yd.”
 
In exhibit 8 the contractor sets out the actual cost of the designed tiles chosen by the owner as $799.22; whereas the total cost if the original tiles specified had been used would have amounted to $350.53. the difference as shown is $448.69 and this according to the appellant’s evidence was agreed upon at the round figure of $450. Further, in the same exhibit are figures showing the difference between the cost of the designed wall boards actually installed and those provided for in the specifications, the additional cost amounting to $70. The total additional cost in respect of the tiles and the designed wall board thus amounts to $520 as claimed. No argument was put forward at the hearing of the appeal as to the unreasonableness or otherwise of this figure.
 
In all we are satisfied on the evidence that the designed tiles and wall boards used in the completing of the house were of superior quality to those described in the specifications; and that therefore they could not properly be described as “provided for in the contract”. Clause 9 of the specifications provides that there may be an adjustment of the contract sum in accordance with the amounts actually expended. That being so, we find that the sum of $520 should not have been deducted from the appellant’s claim as was done in the judgment of the learned trial judge.
 
With regard to the fourth ground: there was ample evidence, accepted for what appears good reason by the learned trial judge, establishing the fact that the workmanship had been defective to the extent shown in the particulars set out. Nothing was put before this Court to show that there had been, in fact, no such defective workmanship; and it must be held to have been fully proved. There is accordingly no merit in this ground of appeal.
 
As to the fifth ground relating to the question of costs: for the reasons which follow, we cannot, with respect, accept the learned trial judge’s decision. The appellant was forced to sue the respondents for moneys which he claimed they were wrongfully retaining and, as it transpires, he was right so to do; as the appellant was substantially successful before the Supreme Court. The Court has an absolute and unfettered discretion to award or not to award costs: Halsbury’s Laws of England 3^rd Edn. Vol. 30 para. 795 p.421.
 
The principle relating to costs was enunciated by Lord Sterndale M. R. in Ritter v. Godfrey  (1920) 2 K.B. 47 at p. 52 where he said:
 

“But there is such a settled practice of the courts that in the absence of special circumstances a successful litigant should receive his costs, that it is necessary to show some ground for exercising a discretion by refusing an order which would give them to him. The discretion must be judicially exercised, and therefore there must be some grounds for its exercise, for a discretion exercised on no grounds cannot be judicial. If, however, there be any grounds, the question of whether they are sufficient is entirely for the judge at the trial and this court cannot interfere with his discretion.”
 
Counsel for the appellant submitted that the learned trial judge in the case now under appeal had not dealt with the question of costs in accordance with the above statement of the law when he said in the course of his judgment:
 

“Because each side has succeeded to some extent ..... there will be no order as to costs.”
 
With respect, we are of opinion that the learned trial judge failed to exercise his discretion judicially on the question of costs in accordance with the principle stated above. As Lord Alverstone said on a matter involving an award of costs in Civil Service Co-operative Society Limited v. General Steam Navigation Ltd  (1903) 2 K.B. 756 at p. 766:
 

“If it appears that a judge has not exercised his discretion or has decided upon grounds which are not open to him this court can still deal with his decision.”
 
For these reasons we conclude that costs should have been awarded to the appellant. To avoid further reference to the Supreme Court we fix the amount to be allowed to the appellant in the Supreme Court at $100 plus disbursements.
 
Accordingly, the appeal succeeds in that the amount of appellant’s claim under the contract is increased from $6,220 to $6,740; less deductions for delay in completion of the contract, $930, and faulty workmanship, $630; and appellant is entitled to some costs in the Supreme Court.
 
The cross appeal, is based on four grounds which could be shortly set out under:
 

(a) That the learned trial judge, erred in law and in fact in holding that clause 12 of the contract had been waived by the respondent;

 

(b) That the delay in completion for which appellant was responsible should be calculated as at least 261 days and not 93, days;

 

(c) That the sum of $900 should not have been awarded for extra work done;

 

(d) That a considerably higher sum should have been allowed in respect of the defective workmanship.
 
Ground (a) is based on clause 12 of the written contract which reads:
 

“The Contractor shall not be entitled to do any extra or additional work or to make any variation of the plans and specifications without the written consent of the Owner and Home Finance Company Limited.”
 
It is common ground that the written consent of the owner was not obtained. In our opinion, any additional work covered by Clause 12 must refer to additional work relating to the completing of the house and its appurtenances, but cannot have reference to any work lying outside the scope of the contract The construction of the driveway was quite independent of what was covered by the contract, and accordingly there was no necessity for a written agreement, in respect of that particular job.
 
In any event, even if it could be held that the work came within the scope of the contract, that particular clause could legally be waived when a request was made by the party concerned. It is clear law that compliance with a particular stipulation in a contract may be waived by agreement or conduct: 8 Halsbury, 3^rd Ed., para 299. When, as here, one party makes a special request to another party for a latter to do some work for him, and the work is performed, it would be contrary to all the principles of justice that the party obtaining the benefit of the work should be able to avoid liability for payment for it on a technical objection such as that raised in this case. This ground fails.
 
Ground (b) appears to be based on a contention that the period of delay, should be calculated up to the time when all the items of defective workmanship had been remedied. But these were matters which lay outside the scope of the contract itself. The learned trial judge found that the figure claimed was “somewhat perplexing and unrealistic”. He held that the delay should be calculated up to the time when a certificate of completion and permit to occupy was issued by, the appropriate municipal authority. This was on the 26^thof March 1975. We are satisfied that the learned trial judge was justified in his finding that the period of delay for which the appellant is liable in damages was correctly fixed as expiring on that date, giving a total of 93 days in all.
 
No convincing argument was put forward on ground (c). It was clearly established that the additional work already referred to above was carried out, by the appellant at the request of the respondents and there is no suggestion that the amount allowed in respect of that work is unreasonable.
 
On ground (d) the argument of counsel for the respondents was directed to a consideration of the conflicting evidence given in respect of the defective workmanship by architect Frederick Graham Walker for the appellant and joinery manager,
 
Mahmood Khan, for the respondents. The witness Walker deposed that it would cost between $350 and $450 to complete the house in accordance with the plans and specifications. The witness Khan estimated that the total cost would amount to $5,456.70.The learned trial judge found that Mr. Walker who was the architect supervising the work on behalf of the mortgagee; Home Finance Company Limited, was an Independent and neutral witness. He also stated that he found the evidence of witness Khan of little use. The latter’s quotation was prepared three years after the construction of the dwelling house was completed. Moreover, it can hardly be said that he was an independent and neutral witness as in the course of his evidence he said:
 

“I am hopeful to get contract to do job of rectifying defect.”
 
The learned trial judge took the higher figure of Mr. Walker’s assessment, $450, and added to that $180 to cover the poor workmanship in the driveway and the storm water drains, not included in Mr. Walker’s report. Nothing in this could be held to be unfair to the respondents. It is well established that an appeal court will normally not interfere with the findings of fact by a trial judge who has seen and heard the witnesses concerned, when he has based his findings on his opinion as to the reliability of those witnesses.
 
Accordingly, we can find no merit in any of the grounds of the cross appeal which is therefore dismissed.
 
In the result the appeal is allowed by increasing the amount to which the appellant is entitled from $6,220 to the amount originally claimed, $6,740, less $930 by way of damage for delay in completion of the contract and $630 for defective workmanship. Accordingly, there will be judgment in favour of the appellant for $5,180 together with one set of costs to cover this appeal and cross appeal, the quantum of which to be fixed by the Registrar of this Court. The appellant will also be allowed $100 plus disbursements by way of costs in the Supreme Court.
 
Judgment for the appellant.
 

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