Copyright newsday
THE Privy Council has dismissed an appeal by mega contractor NH International (Caribbean) Ltd against a subcontractor, ruling that Gordon Winter Company Ltd is entitled to payment for piling work at the Ministry of Education building site, dating back to 2006. The dispute arose when Gordon Winter, hired to complete piling for the ten-story building, halted work in June 2006 after nonpayment. The piling work proved more difficult than foreseen because of the soil conditions at the site, and specifications for the job had to be varied from those initially agreed upon. The sub-contractor was paid for some of its piling work, but was not paid anything after April 2006. The company sought compensation on a contractual quantum meruit basis (the reasonable sum earned for work done) based on unjust enrichment, while NH International counterclaimed that Gordon Winter breached the contract by abandoning the project. NH’s appeal was heard on October 9, and the Privy Council’s decision was delivered on October 30. Delivering the judgment, Lord Burrows, joined by Lords Briggs and Richards, held that the Court of Appeal was correct in recognising a contractual quantum meruit for the work completed. He noted that, despite procedural defects in Gordon Winter’s original pleadings, “it would be mere formalism” to deny payment for work clearly performed under contract. NH International had argued that Gordon Winter’s claim could not succeed because it was not pleaded as contractual. The Board rejected that argument, stating that NH could not “complain that, if one follows through that contractual analysis, it leads to a recognition that Gordon Winter is entitled to a contractual quantum meruit.” “A party is entitled to bring a claim on alternative but inconsistent causes of action. What it cannot do is to succeed on both where they are inconsistent with each other. “GW is not seeking to recover on both a contractual and an unjust enrichment quantum meruit. It accepts that its quantum meruit claim must be based on either contract or unjust enrichment, but not both; and while its primary case was that the quantum meruit was based on unjust enrichment, its alternative case, as presented to the Court of Appeal, was that the quantum meruit was contractual. “There is no possible cause of action estoppel here where both the judgments below have laid down, consistently with GW’s alternative case, that there is a contract,” Lord Burrows said as he rejected NH’s arguments. The Court of Appeal had previously found that the contract incorporated FIDIC 1999 terms, allowing a reasonable payment for varied work under clause 12.3. It reduced NH’s damages for delay to $350,000 and referred Gordon Winter’s claims for standby and other contract-based costs to a master in chambers for assessment. The Privy Council’s decision leaves the Appeal Court’s ruling intact, confirming Gordon Winter’s right to payment for work performed under contract and rejecting NH’s appeal in full. In rejecting NH’s arguments, Lord Burrows said the contractor had accepted that the work was done by the subcontractor, “it cannot be legally correct that GW should fall between the two closely connected stools of unjust enrichment and contract so as to recover nothing for the work it has done.” “A contractual quantum meruit may be expressly or impliedly provided for in the contract,” the ruling affirmed. The Appeal Court's order for NH to recover $350,000 (reduced from $2 million) from Gordon Winter was also upheld, as the latter did not use the procedures for termination under the contract when it left the site in June 2006, although it had not been paid for work done under the varied specifications after April 2006. Because the issues raised in the appeal were limited and did not raise matters of law of general public importance, a panel of only three judges and not the usual five heard the appeal. Jason Mootoo, SC, and Rishi Narine represented NH, while Ian Benjamin, SC, Keston McQuilkin and Tamilee Budhu represented Gordon Winter.
