Lebaro v Attorney General [2016] SBHC 185; HCSI-CC 64 of 2016 (19 October 2016)

IN THE HIGH COURT
OF SOLOMON ISLANDS
Civil Jurisdiction

BETWEEN: STEPHEN LEBARO TRADING AS - Claimant

STEPHEN & SONS PLUMBING

AND: ATTORNEY GENERAL - Defendant
(for Ministry of Culture and Tourism)

Date of Hearing: 11 October 2016
Date of Judgment: 19 October 2016

Mr. R. Dive for Claimant
Mr. F. Hollison for Attorney General

Claim for moneys due and owing under Service Contract

Brown J:

Extempore.
These proceedings were commenced claiming an amount of $ 767,155.24 as balance remaining by virtue of a Service Contract between the claimant and the Ministry of Culture and Tourism for work done and material supplied to the Boys Dorm-Double Floor and Single Floor in Panatina Campus. In accordance with variations to the contract given on 16 March 2012, the aggregated Claim totaled $1,007,563.32. An amount in part payment was admitted, leaving a balance due and owing of $767,155.24
A final completion certificate by Isles Architects signed by the Project Supervisor, Osborn Vangana of Isles and countersigned by Joseph Mamau [Secretary, Ministerial Tenders Board ] dated the 25 August 2012 was in evidence.

Since the proceedings were instituted, on 25 February 2016, no objection appears to have been raised in relation to the named claimant, a non-person and no company. Any award or orders affecting the claimant Stephen and Sons Plumbing whether beneficially or detrimentally may be quite empty for the civil Rules do not comprehend proceedings so entitled. Proceedings may not be commenced by a combination of words, rather a person in this case as envisaged by Chapter 3 of the Rules [Solomon Islands Courts {Civil Procedure} Rules 2007.] Otherwise we may be faced with proceedings instituted by “Cats in the Hat” for instance.

I allowed an oral application to amend the proceedings to name the claimant as Stephen Lebaro trading as Stephen & Sons Construction. No detriment has been occasioned to the Ministry in the circumstances. Although the Ministry appears to have dealt with Stephen Lebaro as Stephen and Sons or Stephen and Sons Plumbing, the contract pleaded [while wrongly entitled], shall be afforded a reasonable interpretation to validate it and shall be presumed to mean the person Stephen Lebaro as a contracting party, for the Ministry which offered the contract in the form prepared, shall be bound by the implied intention to have a party capable of recognition at law, Stephen Lebaro, named as the contractor, for he signed it. Otherwise the contract is void.

The contract has been exhibited to the sworn statement of Moses Tepai [dated 10 October 2016] and is dated 16 March 2012.

By appendix to the contract, variation are envisaged and allowed by the Principal or its representatives.
I am satisfied the architect Supervising Osborn Vangana by way of variation dated 7 June was acting as representative for the Permanent Secretary of the Ministry, [for the Ministerial Tender Board – Festival of Pacific Arts purported to jointly authorize the completion of work] and had ostensible authority to authorize variation to the Contract made on the 16 March 2012. This ostensible authority is apparent from page 2 of the Isles Architect Variation Order where Charles Matanani has signed for the Festival of Pacific Art and Joseph Manan has signed for the Ministerial Tender Board. Ostensible authority means the Agent, the supervising architect, may commit the Principal, the Ministry of Culture & Tourism in accordance with the term of the variation. Such agency is specifically allowed by the schedule to the contract terms.
This was confirmed by Secretary for the Chairman, Ministerial Tender Board where on the 14 October 2012, he awarded the contract for the amount of the variation $ 473,323.15 to Stephen & Sons Construction. A final completion Certificate by the Supervising Architect dated 25 August 2012 was given the client Principal. I am satisfied on the evidence the work had been carried out.

Mr Hollison for the Ministry argued the manner in which this variation was awarded did not comply with Financial Regulations by which Government tenders were awarded. He referred me to the earlier case of Auditor General v Attorney General^[1] in support. Only the Central Tender Board may award contract amounts over $ 500,000. The defendant denied, relying on Public Finance Act and the Financial Regulations, the obligation to pay any variation moneys for the Financial Instructions had not been followed.

The argument and the persuasive authority have no place in this case, for while the Financial Regulations may affect the various Government Departments, here we are dealing with a contract with a person wholly unconcerned by financial regulations affecting Government employees. The obligations arising under contract law in these circumstances cannot be avoided by claiming the work done should not be paid for because, unbeknownst to the contractor, the Ministry had not followed financial instructions in accordance with Section 2 of the Public Financial Audit Act. That may be a matter for the Department to put right, but it cannot be pleaded as a defence to this Claim.

These financial mechanisms are not the responsibility of contracting parties (with the Ministry or Government agencies) to see to their application; the responsibility rests with the individuals in the Department. For contract law cannot be affected by the failure of the government agencies to adhere to its own strict controls under the Financial Regulations when contracts or variation are awarded to strangers to the Financial Instructions, strangers not subject to such Instructions. The contract is unaffected by unilateral breach of the Government Financial Instructions, if that be the case, on the part of one contracting party here, the Ministry of Tourism. The Ministry cannot take advantage of its own failings, as it seeks to do here.

Such breach of Financial Instruction does not impinge on the contractual relations which I have found between the parties.

The amount claimed was for the contact $ 534,240.17 plus variation
of $ 473,323.15
$1,007,563.32

Less 7.5% tax $75,567.24
$ 931,996.06 Due

Less paid $ 747,902.15
$ 184,093.91 Owing

I’m satisfied the balance owing is $ 184,093.91.
There shall be judgment for $ 184,093-91.

Pursuant to R.17.65 I award simple interest at the rate of 5% per annum on the amount of judgment from the time the claim was filed until the day before judgment is entered.
The defendant shall pay the claimants cost to the assessed agreed or fixed.

BROWN J

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^[1] [2005] SBHC 107; [2005] 1 LRC 358 [22 April 2005]