Phillip Walters v Stone Plus Ltd

• Jurisdiction: Jamaica
• Judge: Palmer Hamilton, J
• Judgment Date: 22 April 2021
• Year: 2022
• Court: Supreme Court (Jamaica)
• Docket Number: CLAIM NO. SU2018CD000372

Between

Phillip Walters

(Trading as L.A.B. Asphalt Spraying)

Claimant

and

Stone Plus Limited

1 ^st Defendant

and

Kayon Clifton Campbell

2 ^nd Defendant

and

Notfoya Thompson

3 ^rd Defendant

[2021] JMCC COMM 49

CLAIM NO. SU2018CD000372

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN THE COMMERCIAL DIVISION

Contract Law — Breach of contract — Construction of Contract-Services provided under seven separate contracts-Parol evidence rule

Mr. Curtis Daniel Cochrane for the Claimant

Mr. Shantez R. Stewart and Ms. Kenisha Davis instructed by Stewart Law Attorneys-at-Law for the Defendants

IN OPEN COURT

Palmer Hamilton, J

1 The claimant initiated proceedings against the defendants by way of claim form seeking to recover the sum of $8,360,200.00 allegedly owed to him pursuant to a total of seven contracts between himself and the 1 ^st defendant company. The claimant also claimed interest at a rate of 10% per annum from 15 November 2017 being the expected completion date on the 1 ^st agreement until the date of judgment, costs and attorney's costs.

2 The claimant particularized the sum claimed as follows:

Work Done	Amount Claimed
Labour cost to spray 6600 gallons of MC Oil @ $400.00 per gallon	$2,640,000.00
Labour cost to spray 9000 gallons of asphalt (tar) @ 400.00 per gallon	$3,600,000.00
Sum to obtain and spread of gravel	$180,000.00
Total credits obtained from Chin's Construction Limited	$3,600,200.00
Total	$10,020,200.00
Less the value of 3400 gallons of MC Oil in storage bought for the Defendants but not used on their behalf	$1,360,000.00
Less the sum paid to the claimant by the 2 nd defendant for work done as per Agreement dated 6 April 2018	$300,000.00
Total	$8,360,200.00

BACKGROUND

3 The facts as set out by counsel for the defendant are accepted, with slight modification, as accurately presenting the background giving rise to these proceedings. Those facts are as follows. The claimant is a business man who owns and operates L.A.B. Asphalt Spraying of 15 Berry Drive, Spanish Town in the parish of St Catherine. The 1 ^st defendant is a company duly registered under the laws of Jamaica with its registered business address at 1 Verene Avenue Kingston 10 in the parish of St Andrew. The 2 ^nd and 3 ^rd defendants are directors of the 1 ^st defendant company.

4 In or about 2017, the 2 ^nd defendant was contracted by the Government of Jamaica to execute the Cane Haul Roads Rehabilitation Project (the Project) between Long Pond in the parish of Trelawny and the Appleton factory in the parish of St. Elizabeth. The Project was forecasted to be done in two phases.

5 In or about 2017 the 1 ^st defendant through the 2 ^nd defendant engaged the services of L.A.B. Asphalt Spraying as a sub-contractor for the Project. The services were to primarily spray MC Oil, tar and spread gravel on roads in Elderslie in the parish of St Elizabeth.

6 The claimant and the 1 ^st defendant entered into several contracts regarding the Project which were as follows:

• a. Agreement dated 13 November 2017;

• b. Agreement dated 21 November 2017;

• c. Agreement dated 28 November 2017;

• d. Agreement dated 1 December 2017;

• e. Agreement dated 3 January 2018;

• f. Agreement dated 26 February 2018; and

• g. Agreement dated 6 April 2018.

7 The claimant stated that the defendants breached these contracts based on the non-payment for the services he rendered pursuant to the contracts and subsequently initiated proceedings for recovery of these sums. The defendants filed a defence to the claim and averred that the balance owing to the claimant as agreed by the parties in writing is $320,000.00 and not any other sum being claimed by the claimant.

THE CLAIMANT'S CASE AND SUBMISSIONS

8 The evidence on behalf of the claimant was marshalled through his own evidence, along with that of Ms. Donette Johnson and the expert witness Mr. Kelvin Kerr.

9 The claimant in his witness statement indicated that he met the 2 ^nd defendant in or around 2017 and in October of that same year, the 1 ^st defendant contracted his services to spray MC Oil, tar and spread gravel on roads in Elderslie in the parish of St Elizabeth.

10 It was averred by the claimant that the 2 ^nd defendant and himself agreed that the 2 ^nd defendant would be responsible for the money to buy the MC Oil and tar and that he would pay the claimant for his labour at $480.00 per gallon to spray the MC Oil and $470.00 per gallon to spay the tar. The claimant claimed that these costs were subsequently renegotiated twice at the request of the 2 ^nd defendant and the final agreement was that the claimant was to be paid $400.00 per gallon to spray the MC Oil and $400.00 per gallon to spay the tar. Based on the agreement dated 13 November 2017, the expected completion date was scheduled for 15 November 2017.

11 The claimant alleged that he received the sum of $1,000,000.00 from the 2 ^nd defendant to purchase the 5000 gallons of MC Oil he sprayed. The cost of the purchase amounted to $2,000,000.00 but he received credit in the sum of $1,000,000.00 from Chin's Construction Limited. He further averred that subsequent sums of $500,000.00, $500,000.00, $999,900.00 and $999,900.00 received from the 2 ^nd defendant to purchase tar and MC Oil fell short but he got credit from Chin's Construction Limited. The total credit obtained from Chin's construction Limited is $3,600,200.00. He disclosed to the court that the only amount he received for his labour costs was $300,000.00.

12 Under cross examination the claimant indicated that when he entered into the contract with the 1 ^st defendant company, he was not able to read and understand what was on the documents but he could sign his name. He stated that he was told what to do and he just signed documents presented to him. As for the seven contracts in question he was just told to “sign here” and he complied.

13 Turning now to the evidence of Ms. Donette Johnson was limited to her giving credit to the claimant on six purchases made by the claimant. She issued receipts to the claimant for the purchases which indicated the payments made and the amounts outstanding on the purchases. She prepared an invoice in relation to the outstanding sum of $3,600,200.00 for the credit obtained by the claimant. Under cross examination she was unable to say whether or not the materials in question were purchased to use in relation to the contracts between the claimant and the 1 ^st defendant. Ms. Johnson also stated that she was unaware if the receipts in question were written on the dates inscribed on the receipts.

14 The evidence of the expert witness Mr. Kelvin Kerr primarily highlighted discrepancies in the seven contracts between the parties. Mr. Kerr gave his qualifications as, inter alia, a chartered Quality Surveyor, a member of the Royal Institute of Chartered Surveyors and a fellow of the Jamaica Institute of Quantity Surveyors and a partner in the firm of Davidson and Hanna.

15 During cross examination, Mr. Kerr disclosed that as a cost Consultant Quality Surveyor, he has the knowledge and expertise to determine what reasonable costs are as presented. Having been guided by the cost of $400.00 per gallon for the tar, the figures stated was not a reasonable assessment of the work. He indicated that the agreements contained consistent errors in their preparation.

16 Mr. Kerr disclosed to the court that it is obvious that the agreements were not only inadequate but erroneously prepared. They made no reference to the breakdown of the costs for material and labour and in all cases they did not reflect the actual value of the works intended to be carried out and therefore led to a huge dispute of ambiguity. Mr. Kerr further stated that based on the values stated erroneously, it is obvious that those values paid accordingly would never complete the scope of the work carried out by the claimant. The 1 ^st defendant would be at a great advantage.

17 The majority of his evidence under cross examination related to his opinion that tar cannot be sprayed without MC Oil and as such, the cost of the MC Oil and the labour have to be a part of the overall costs of that activity. His calculations surpassed the amount being claimed by the claimant and based on his calculations, the amount due to the claimant under the seven contracts is $38,681,000.00.

18 The majority of the submissions on behalf of the claimant concerned counsel's analysis of the evidence. In relation to the law, learned counsel submitted that there is ample authority for the use of a “collateral” contract to avoid the dilemma of “term” or “representation”. Where parties enter into a written contract after one party has made oral assurances there are at least three possibilities:

• 1. The contract is contained wholly in the written document;

• 2. The contract is partly written and partly oral;

• 3. There are two contracts there being an oral collateral contract as well as the written contract.

19 The case of City and Westminster Properties (1943) Ltd v Mudd [1958] 2 All ER 733 cited in support of this principle. Learned counsel indicated that in the first case, it is possible that the assurances will give rise to liability under the law relating to misrepresentation, where they amount to a statement of fact. In many cases the second and third alternatives seem to appear to be treated as interchangeable. It was further submitted that where there are two contracts, it is possible to argue that the rights under the written contracts have been transferred and that those under the oral contract have not.

20 In concluding his submissions, counsel stated that it is unusual for literate parties entering a written agreement to have one party read the agreement to the other. The court is asked to find that there was an oral contract between the claimant and the defendants and that this contract amounts to a...