Thomas Hamilton & Associates Ltd v Digicel (Jamaica) (Mossell) Ltd

• Jurisdiction: Jamaica
• Judge: Phillips JA,Sinclair-Haynes JA,F Williams JA
• Judgment Date: 29 April 2016
• Neutral Citation: JM 2016 CA 39
• Docket Number: CIVIL APPEAL NO 15/2012
• Court: Court of Appeal (Jamaica)
• Date: 29 April 2016

[2016] JMCA Civ 22

JAMAICA

IN THE COURT OF APPEAL

SUPREME COURT

Before:

The Hon Miss Justice Phillips JA

The Hon Mrs Justice Sinclair-Haynes JA

The Hon Mr Justice F Williams JA (AG)

CIVIL APPEAL NO 15/2012

Between:

Thomas Hamilton & Associates Limited

Appellant

and

Digicel (Jamaica) (Mossell) Limited (T/A Digicel)

Respondent

Keith Bishop and Andrew Graham instructed by Bishop & Partners for the appellant

Maurice Manning and Miss Michelle Phillips instructed by Nunes Scholefield Deleon & Co for the respondent

Phillips JA

1 I have read in draft the judgment of my sister Sinclair-Haynes JA. I agree with her reasoning and conclusion and have nothing to add.

Sinclair-Haynes JA

2 On 26 October 2011, King J dismissed Thomas Hamilton & Associates Limited's, (the appellant) claim against Digicel (Jamaica) (Mossel) Limited, trading as Digicel, (the respondent), for wrongful and premature termination of a service contract, and awarded costs to the respondent to be agreed or taxed. The learned judge also nonsuited the respondent in respect of its counter claim but refused to award the appellant costs on the respondent's counter claim. This is an appeal from that order.

Background

3 By virtue of two written contracts, the appellant, an electrical engineering contractor agreed with the respondent, a telecommunications company which provides cellular telephone services to Jamaica and other Caribbean countries to provide routine maintenance and refueling of all its generator sets, at various cell sites in Jamaica. The duration of each contract was for one year. The first contract commenced on 1 June 2004 and expired on 31 March 2005. The second contract was commenced on 1 April 2005. It was however signed in June 2005 and expired on 31 March 2006.

4 At the expiration of the first contract, and prior to the signing of the second contract, the appellant continued to provide maintenance and refueling services for the respondent's generators and was duly remunerated. Upon the expiration of the second contract on 31 March 2006, the appellant continued to maintain the respondent's generators until 29 May 2006, when by way of letter dated 29 May 2006, the respondent ended that arrangement. The termination became effective at 1 June 2006.

5 Its contract was however not renewed. There is an irreconcilable divergence in the evidence for the appellant and the respondent as to the reason the appellant continued to service the respondent's generators after the expiration of the second contract.

The appellant's version

6 The appellant claims that it had a legitimate expectation that it would remain in the contract for at least another year. According to the appellant, prior to the expiration of the contract, it organized to remove its equipment and workmen from the respondent's property, but was ‘encouraged’ by Mr Lincoln Brown, the respondent's electro-mechanical manager, who was acting as its agent to continue to perform the service contract.

7 Sometime in March 2006, at a meeting, with the respondent and the appellant's agent, Mr Thomas Hamilton, Mr Hamilton informed the respondent that the appellant had received information that the appellant's service would have been ‘unceremoniously replaced’. He however received no confirmation.

8 By continuing, the appellant contends that it acted to its detriment by:

• (1) making firm contractual agreement with a landlord to house the workers and office;

• (2) making and agreeing contracts with technical employees for an additional year of work;

• (3) paying insurance premium for one year's coverage;

• (4) providing refueling tanks at strategic locations to the cell sites;

• (5) employing and training a cadre of workers with the ability to respond to any emergency situation required by the contract (Damon Scott and Steve Edwards as supervisors, and Nocander Douglas, Steve Brown and Orville Robinson as technicians);

• (6) owning and maintaining three specialized trucks and other pieces of equipment for serving of the generators;

• (7) stocking parts as was required under all previous contracts; and

• (8) obtaining insurance coverage with a limit of liability of $10,000,000.00 at a premium of $100,000.00.

9 He further complained that he suffered loss of income by not ‘seeking to engage in new or additional employment since the claimant was expected to remain in contract for at least another year’. The appellant was expected to earn more than it earned the previous year. Consequently, the appellant claimed the following:

• a. The sum $1,764,909.14 which represents spare parts acquired pursuant to contract between the parties;

• b. The sum of $330,000.00 for office and lodging in the western region;

• c. The sum of $32,914,306.34 for loss of income;

• d. The sum of $1,833,595.00 for salary and wages to workers;

• e. The sum of $100,000.00 paid for insurance premium;

• f. The sum of $1,000,000.00 for fuel and storage tank;

• g. Interest at the commercial rate on all sums due;

• h. Attorneys-at-Law costs; and

• i. Costs.

The respondent's version

10 The respondent resisted the claim. It trenchantly refuted the appellant's assertion that pursuant to the contract it stocked items which amounted to $1,764,909.17. It further stated that it was not liable to the appellant for stocking items to perform its contract.

11 It was the respondent's contention that it was dissatisfied with the performance of the appellant. On 31 March 2005, the end of the first contract year, the appellant's performance was evaluated and the appellant was informed of the respondent's dissatisfaction with its performance. So as to secure a renewal of the contract, the appellant agreed to remedy the deficiencies. On that understanding, the contract was renewed.

12 The respondent further contended that during the second contract period, the appellant was again advised that its performance was deficient. Consequently, on 16 February 2006, shortly before the second contract period ended, representatives of the appellant and respondent met in respect of the appellant's deficient performance. The appellant was advised that because of its unsatisfactory performance it was unlikely that the contract would be renewed.

13 Pending the final evaluation, the appellant continued to provide its services on a month-to-month basis. It was never represented to the appellant that the monthly extension of the contract guaranteed its renewal. Any obligation which the appellant undertook for a period in excess of one month from the date the contract expired was at its own risk.

14 The respondent also counterclaimed and alleged that consequent on the appellant's refusal to either complete installation or properly service its generators, it ‘suffered loss of down time and revenue in respect of its cell sites’. It claimed that the downtime and losses were a ‘result of the [appellant's] breach of its contractual obligations and/or negligence’. According to the respondent, the appellant was in breach of the contract and or was negligent in that it failed to:

• a. employ adequate trained and skilled personnel;

• b. service and/or maintain the Defendant's generators;

• c. keep sufficient parts and equipment in stock;

• d. respond adequately to service calls;

• e. properly manage and supervise its technicians; and

• f. install and commission sites as required under the agreement.

15 The appellant, in its response to the respondent's defence and counter claim, denied that the respondent provided it with a written report in which it expressed its dissatisfaction with its performance. It asserted that it was subject to two performance appraisals by the respondent. It was graded on a scale of one to five, five being the highest. There were six areas of appraisal and the appellant was assessed as grade three in three areas and grade four in the other three. The appellant also averred that the only disagreement between the parties in the meeting of 16 February 2006 was in respect of the purchase price of a battery charger which the appellant had imported and sold to the respondent.

16 It averred that its agent had raised a concern with the appellant about a rumour that it would be replaced, but the agent for the respondent neither admitted nor denied the rumour. The appellant denied that the respondent suffered loss in respect of its cell sites as a result of the appellant's failure to properly manage them.

The learned judge's findings

17 This court does not have the benefit of the learned judge's written reasons. The exchanges between the learned judge and counsel for the appellant are however helpful in discovering the learned judge's thought process.

18 At pages 16 and 17 of the supplemental record of appeal, were the following exchanges between the learned judge and counsel Mr Bishop:

‘HIS LORDSHIP: Mr. Bishop, I will be frank with you and the biggest hill that you have, you have pleaded and defended upon a cause of action which can only assist you by to do what you ask me to do, which is to stretch and adopt a Public Law into a Private Law for the first time. And I am not — I am not at all hesitant to break new ground if it serves fairness, but it is not just for the sake of breaking ground. One has to look at the history and genesis of those two from legitimate expectation and if one traces that, you see that though there are similarities, they are not related at all. The doctrine on legitimate expectation was born in Common Law. It was born in — born in that area and there is nothing which will justify it being moved across.

HIS LORDSHIP: And further even if you had started off as estoppel, you would still have had certain difficulties in relation to what you must establish in order to defend upon. I will certainly listen to whatever you want to offer me by way...