Coffee Industry Board v Construction Developers Associates Ltd

• Jurisdiction: Jamaica
• Judge: HARRISON, P. , SMITH, J.A. , MARSH, J.A. (Ag.)
• Judgment Date: 16 November 2007
• Neutral Citation: JM 2007 CA 62
• Judgment citation (vLex): [2007] 11 JJC 1602
• Court: Court of Appeal (Jamaica)
• Date: 16 November 2007

IN THE COURT OF APPEAL

BEFORE:

THE HON. MR. JUSTICE HARRISON, P THE HON. MR. JUSTICE SMITH, J.A THE HON. MR. JUSTICE MARSH, J.A. (AG.)

BETWEEN

COFFEE INDUSTRY BOARD

APPELLANT

AND

CONSTRUCTION DEVELOPERS ASSOCIATES LIMITED

RESPONDENT

Maurice Manning & Miss Sherry-Ann McGregor instructed by Nunes, Scholefield, DeLeon & Co., for appellant

Miss Hilary Phillips, Q. C, & Kevin Williams instructed by Grant Stewart Phillips & Co., for respondent

ARBITRATION - Order to proceed to - Appeal

HARRISON, P.

1 This is an appeal from the decision of Mrs. Justice Hazel Harris on 4 ^th May, 2004 ordering that the parties proceed to arbitration and appoint an arbitrator within ten days of the said order.

2 The facts relevant to this matter are that on 30 ^th May 1994, Construction Developers Associates Ltd ("CDA"), the respondent, entered into a contract with Coffee Industry Board ("CIB"), the appellant on behalf of the Ministry of Agriculture, the respondent. The terms of the contract were that CDA undertook to complete the construction of a central grading and finishing plant, at Salt River in the parish of Clarendon, at a contract price of $247,563,656.01. A material term of the conditions of the said contract was clause 19.1. It reads:

"19.1 ... If any dispute or difference of any kind whatsoever shall arise between the Employer and the Contractor or the Engineer and the Contractor in connection with, or arising out of the Contract, or the execution of the Works , whether during the progress of the Works or after their completion and whether before or after the termination, abandonment or breach of the Contract, it shall, in the first place, be referred to and settled by the Engineer who shall, within a period of ninety days after being requested by either party to do so, give written notice of his decision to the Employer and the Contractor." (Emphasis added).

3 Under the terms of the contract, CIB is the Employer, CDA is the Contractor and the firm of Messrs McMorris, Sibley Robinson is the Engineer.

4 Clause 22.5 of the conditions of the contract provides that:

"22.5 ... Not later than one month after the issue of the maintenance Certificate the Contractor shall submit to the Engineer a Final Statement of Account with supporting documents, showing in detail the value of work done in accordance with the Contract together with all further sums which the Contractor considers to be due to him under the Contract . Within six months after receipt of this Final Statement of Account and of all information reasonably required for its verification the Engineer shall issue a final certificate stating:

• a) The amount which in his opinion is finally due under the Contract and (after giving credit to the Employer) for all amounts previously paid by the Engineer and for all sums to which the Employer is entitled under the Contract.

• b) The balance, if any due from the Employer to the Contractor or from the Contractor to the Employer as the case may be. Such balance shall, subject to Clause 17.8 hereof, be paid to or by the Contractor as the case may require within Twenty-Eight (28) days of the Certificate." (Emphasis added).

5 By letter dated 25 ^th September 1997 the Engineer sent to the appellant the requisite Maintenance Certificate. A copy of this Certificate was sent by the Engineer to the respondent CDA by letter dated 16 ^th October 1997.

6 By letter dated 24 ^th October 1997 CDA wrote to the Engineer advising that it had received the said Certificate on 17 ^th October 1997 and:

"... as such we will be unable to meet your 25 ^th October, 1997 deadline for submission of Final Accounts.

We are therefore requesting that an extension be granted to allow our submission of Final Accounts by 31 ^st December 1997."

7 The Engineer responded by letter dated 27 ^th October 1997, and said, inter alia:

"We are aware that the Quantity Surveyors, Stoppi Cairney Bloomfield, have submitted to CDA a Provisional Final Account (relating to the project) as of February 25, 1997, and SCB have informed that they are still awaiting a response from CDA.

We are of the opinion, considering the fact that a Provisional Account was submitted for agreement some 8 months ago, that there is no need to extend the period for the final submission beyond Monday, November 17, 1997."

8 A letter dated 31 ^st October 1997 from CDA to the Engineer, reads, in part:

"In reference to your letter dated 27 ^th October, 1997, kindly be advised that work has been done on the project since the submission of the Quantity Surveyors Provisional Final Account dated 25 ^th February, 1997. Furthermore, your reference to a Quantity Surveyors Provisional Final Account is inconsequential in relation to (i) our preparation of the Final Account, and (ii) the Contract Conditions.

We fail to understand your apparent reluctance to be flexible in this regard, especially when you are allowed up to six months thereafter to issue the Final Certificate."

9 By letter dated 7 ^th November 1997, the Engineer referred to the Provisional Final Account submitted to CDA by Quantity Surveyors, Stoppi Cairney Bloomfield ("Stoppi Cairney") on 25 ^th February 1997, CDA's delay in delivering information to Stoppi Cairney, as requested, and concluded:

"In view of the above, and the Contract Conditions governing the matter (Clause 22.5), we cannot extend the date for the submission of the Final Account, and therefore expect your compliance by November 17, 1997."

10 CDA, by letter dated 11 ^th December 1997 to the Engineer, said:

"We are not sure what should be understood from your request made to the Quantity Surveyors to prepare an assessment of the final cost of the project.

However, if it is your intention to use such assessment as a Final Account, we wish to be advised of the Contract Conditions that empowers you to take such an action. In the absence of Contractual support, we strongly object to any such intention.

Our Final Account will be submitted by December 31, 1997 as previously advised."

11 In response thereto, the Engineer by letter dated 16 ^th December 1997 to CDA wrote:

"The Contract calls for you to submit a Final Statement of Account to me within one (1) month after the issue of my Maintenance Certificate of October 16, 1997.

It is now in excess of one month since that date and I have not received your Final Statement of Account. I now consider you to be in default and in breach of your Contract.

Since it is necessary to have such an account, I will request the Quantity Surveyors to assist me in its preparation and when completed, will be issued by me as the Project Final Account."

12 CDA did not submit its Final Statement of Account on 31 ^st December 1 as promised, but wrote to the Engineer by letter dated 16 ^th January 1996 follows:

"As we are at the stage of Final Account on the project, upon review of our files we recognise that there has been no response to some critical issues as follows:

Date of letter	Subject
30/10/95	Extension of time
30/01/96	" " "
08/07/96	" " "
23/10/96	Defective Work
21/01/97	Practical Completion Date
19/10/94, 12/1/95, 15/4/97	Water Cost due to omission of reactivation of the well.

In addition to the foregoing, there are a number of unresolved issues which are represented in our Final Account that will require settlement either amicably or by other means prescribed by the Contract."

13 By letter dated 2 ^nd November 1998 Stoppi Cairney sent to CDA:

"... one (1) copy of the draft Final Account for your perusal and agreement"

14 and claimed the sum of $361,604,442.57.

15 Woodrow Whiteley and Associates, Chartered Quantity Surveyors ("Woodrow Whiteley") by letter dated 19 ^th January 1999, sent to Stoppi Cairney. "One (1) copy of the proposed final Account prepared on behalf of ...CDA", in the sum of $601,043,675.68, together with supporting documents, and concluded:

"We recently received a copy of your proposed draft final account dated November 2, 1998. We will be undertaking a review of your submission and compare findings with the contents of C.D.A.'s submission. As soon as we have completed this exercise we will contact you and try to arrange a meeting to commence discussions towards reaching an agreed final account figure at an early date."

16 Stoppi Cairney responded to the above letter of 10 ^th January 1999, by letter to Woodrow Whiteley dated 21 ^st January 1999 referring to the terms of the said clause 22.5, the fact that the Engineer's maintenance certificate dated 25 ^th September 1997 determined that:

"... the latest date for the submission of the Final Account Statement was October 25, 1997,"

17 the request for extension to December 31, 1997, and continuing said:

• "4. The Final Account Statement was however, submitted to us by Construction Developers Associated Ltd., on January 14, 1998. The claim was...