The Saint Christopher Club Ltd v Construction Services Ltd

• Jurisdiction: Saint Kitts and Nevis
• Judge: Liverpool, J.A.
• Judgment Date: 15 January 1996
• Neutral Citation: KN 1996 CA 1
• Docket Number: Civil Appeal No. 5 of 1994
• Court: Court of Appeal (Saint Kitts and Nevis)
• Date: 15 January 1996

Court of Appeal

Floissac, C.J.

Liverpool, J.A.

Singh, J.A.

Civil Appeal No. 5 of 1994

The Saint Christopher Club Limited

and

Construction Services Limited

Dr. Henry Browne and Mrs. C. Jenkins for the appellant.

Mr. Terrence Byron and Mr. Hesketh Benjamin for the respondent.

Contract - Existence — Whether there was a contract between the parties

Practice and procedure - Award of interest — Cross appeal by respondents

facts

Appellants hired the respondent to do construction work — Workers demanded their holiday pay — Cheque given to the respondent to avoid a riot at the workplace

Whether the judge was wrong in disallowing payments to two employees and the rate of interest awarded on the amounts found to be due and payable by the appellant

Held: The acceptance and payment of the respondent's weekly bills by the appellant for 44 weeks was strong evidence to show that the parties had entered into a contractual relationship — Contract concluded by conduct.

Services were rendered — Amount claimed was properly payable by the appellant — Section 27 of the Supreme Court Act of St Kitts-Nevis (Act No. 17 of 1975) — The court has a wide discretion to award interest — Appeal dismissed.

Liverpool, J.A.

THE BACKGROUND

1 The appellant wished to demolish a portion of an existing structure, add a third floor to that structure, and also to construct another building north of that structure. Negotiations took place between representatives of the appellant and the respondent which culminated in an exchange of letters between the parties.

2 Meetings had been held during the week ending 14th February, 1988, and on 16th February, 1988 Mrs. C. Winterburn writing on behalf of the respondent submitted the respondent's proposals for undertaking the work which, incidentally, had already been commenced on 15th February, 1988.

3 Mrs. Winterburn's proposals were contained in the following letter:

“16 February 1988

Mr. V. Veira

Chambers

Princes Street

Basseterre

Dear Sir,

Re:– St. Christopher Club — Frigate Bay

4 We refer to the series of meetings held last week, week ending 14 February 1988 with Mr. Wolfgang Triebsch and with particular reference to the last meeting we now set out our proposals for the commencement of alteration and completion works at the St. Christopher Club, Frigate Bay.

1. Valuation of Works

5 In the initial stages of this contract and until construction requirements are known the only feasible method of charging for work executed is by a fixed fee or a percentage added to ascertained cost. We believe that in the early stages of the contract a fixed Management fee might be disproportionate to the value of the work executed and we also feel that a Management fee is fundamentally time related and we are fully aware that time is the essence of this contract.

6 We therefore propose payment reimbursement on “Cost Plus” basis.

7 The percentage addition can be tailored in several ways e.g.

• (a) Fixed percentage addition to gross cost; by this method every cost associated with the project would be recorded and an agreed percentage applied to gross cost for invoicing.

• (b) Fixed percentage to limited cost; an agreed percentage would be added to limited cost; i.e. resources such as provision of plant and equipment, small tools, maintenance depreciation of equipment etc. etc. would be deemed to be paid for within the percentage addition.

• (c) Fluctuating percentage. The percentage addition would fluctuate according to the value of work executed in the valuation period — this prevents an unbalance where recovery is influenced by high cost activities and not by management input.

8 Whilst we favour (c) we believe that in the initial stages method (a) is the only workable method as the requirements of the construction programme are still so sketchy.

9 We suggest that a percentage of 8 ¹/₂, is applied to gross cost in the early stages of this contract.

10 We attach a schedule of our present wages rates and a projection of anticipated costs in weeks 1, 2 & 3 of the construction schedule. We further suggest that the amount available for equivalent to the first two week period costs.

11 We are of course ready to discuss any aspect of our proposals with you at any time.

Yours faithfully

(Sgd.) C. Winterburn

16th February 1988

LIST OF WAGES — PER HOUR

Browne	Labour	$5.25
Heets	“	4.50
Clarke	Mason	7.00
Huggins	“	6.50
Flemming	Apprentice	4.50
Bell	“	5.25
Pinney	Carpenter	6.25
K. Phillip	Foreman	12.00

16th February 1988

St. Christopher Club — Frigate Bay

Cost Projection — Weeks 1 — 3

Week	Labour	Material	Misc.	Gross
#1	2600.00	–	480.00	3080.00
#2	4300.00	3900.00	800.00	9000.00
#3	5600.00	11000.00	1560.00	18160.00
				30,240.00”

12 The very next day Mr. Vernon S. Veira replied on behalf of the appellant, in the following terms –

“17 February 1988

Mrs. Catherine Winterburn

Secretary

Construction Services

Wilkin Street

Fortlands

BASSETERRE

Dear Catherine

Re: CONSTRUCTION OF CONDOMINIUM PROJECT SAINT CHRISTOPHER CLUB FOR CONDOMINIUMPROJECT

Further to our meeting on Saturday, 12 February, 1988, between Wolfgang Triebsch, the Architect for the company, Bryan Martin, yourself and I, it was agreed that Construction Services Limited would be the contractor in the construction of the proposed 200 condominium units subject to formal contract.

As you are well aware because of the time constraint, we are not in a position to enter into a contract or to your commencement of work on the site on Monday, 15 February, 1988. However, it was agreed that you would commence the demolition of certain portions of the present structure, and cleaning of the site in preparation for the finalisation of those buildings.

I am in receipt of your proposed cost and percentages and would be forwarding those to Montreal to Mr. Wolfgang Triebsch for confirmation in which time we would be entering into the necessary agreements for work performed.

Trusting all is well.

Yours sincerely

(Sgd.) Vernon S Veira

cc. Wolfgang Triebsch”

13 As I have already indicated, work had already commenced at the time that the letters were written — demolition had in fact started - and the respondent thereafter submitted weekly accounts to the appellant which, from all accounts, were promptly paid. The respondent never heard from Montreal and no formal agreements were ever entered into. Work continued in an uninterrupted manner until week 45 i.e. late in December of that same year. During that week there was a disturbance on the site when the workers demanded their holiday pay. Mr. Veira visited the site and, in an attempt to settle matters with the workers, gave the respondent a cheque for $34,363.96. Mr. Veira made it clear to the respondent that this amount was being paid on that day, not out of an obligation under any agreement with the respondent, but in order to avoid a riot at the workplace; and that the appellant did not thereby accept responsibility for the holiday pay due to the workers.

14 On 23 December, 1988 the appellant through its solicitor and Chief Executive Officer purported to terminate the agreement, and the following letter was addressed to the respondent:

“23 December 1988

Mrs. Catherine Winterburn

Managing Director

Construction Services

Bird Rock

Dear Mrs. Winterburn

Please be advised that with immediate effect your contract with St. Christopher Club Limited is hereby terminated.

We would wish that Construction Services Limited together with our Muneer Tarazi would supervise the removal of all its equipment from the construction site at Frigate Bay. All financial arrangements with St. Christopher Club and Construction Services Limited vis a vis percentages and otherwise would be worked out, however we take the position that holiday pay due to your employees were in fact paid on your behalf and is not an acknowledgment by St. Christopher Club that they were liable to pay the same.

I trust and wish every success in the future.

Yours truly

(Sgd.) Vernon S Veira

Solicitor and CEO

cc Department of Labour”

15 On 10th January, 1989, Mr. Veira, Solicitor for the appellant acknowledged receipt of a Statement of Account from the respondent in which he restated the appellant's view that holiday pay was an account for the respondent and that the amount paid to the workers should be deducted from any sums due to the respondent. He also stated that until a proper accounting had been undertaken to his client's (the appellant's) satisfaction, no payments would be made to the respondent. Mrs. Winterburn replied on behalf of the respondent on 17th January, 1989 stating that the respondent considered that holiday pay should be to the account of the appellant. She also requested immediate payment of the amount due to the respondent as reflected in the Statement of Account; and warned that as the respondent considered the appellant to be in default of all outstanding amounts billed, all interest accruing on that account would be chargeable at the rate of 2% per month or part thereof.

16 In the meantime it would appear that the appellant was itself minded to ascertain what, if any, payment was due to the respondent; and on 18th May, 1989 Mr. Tarazi, the appellant's architect completed a detailed summary of accounts which revealed a net balance due to the respondent of $38,937.95. This sum, which included the amount of $25,571.90 for work done in week 45, was not paid to the respondent.

17 On 16 June, 1993 the respondent issued a writ claiming the sum of S38, 937.95 which represented the balance shown to have been due to the respondent on the account drawn up by Mr. Tarazi for the appellant on 18 May 1989. In addition the respondent claimed the sum of $34,609.16 being the cost of a number of expenses (which were particularised) forming part of the...