Khouly Construction & Engineering Ltd v Edmond Mansoor

JurisdictionAntigua and Barbuda
CourtCourt of Appeal (Antigua and Barbuda)
JudgeFarara JA
Date15 April 2021
Docket NumberANUHCVAP2020/0023 (formerly ANUHCVAP2019/0009)
[2021] ECSC J0415-1

THE EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Before:

The Hon. Dame. Janice M. Pereira, DBE Chief Justice

The Hon. Mde. Louise Esther Blenman Justice of Appeal

The Hon. Mr. Gerard St. C. Farara Justice of Appeal [Ag.]

ANUHCVAP2020/0023 (formerly ANUHCVAP2019/0009)

Between:
Khouly Construction & Engineering Limited
Appellant
and
Edmond Mansoor
Respondent
Appearances:

Mr. Anthony Astaphan, SC with him Mr. Loy Weste and Mr. Kendrickson Kentish for the Appellant

Dr. David Dorsett for the Respondent

Civil appeal — Appellate approach to review of findings of fact — Contract law — Implied term — Breach of implied term of building contract — Whether trial judge erred in upholding an implied contractual term to carry out the works under the contract in a professional and workmanlike manner using proper skill and care — Whether implied term conflicts with express terms of the contract — Whether trial judge erred in relying on or attaching weight or too much weight to the Schamber report in coming to her decision on the counterclaim — Whether trial judge erred in her approach to and evaluation of the expert evidence in determining whether the respondent had discharged the burden of proving cracks, leaks and damage were caused by poor workmanship on the part of the appellant in breach of the implied term — Causation — Requisite standard of proof — Balance of probabilities — Approach of appellate court to issue of causation — Whether the judge erred when she gave judgment on the appellant's claim — Whether contractual rates or market rates to be applied to extras on quantum meruit basis — Applicability of principle of subjective devaluation — Whether respondent/counter-appellant can rely at this stage on principle of subjective devaluation

Khouly Construction and Engineering Limited (“the appellant”) and Mr. Edmond Mansoor (“the respondent”) entered into a written building contract on 14 th February 2008. By the said contract, the appellant agreed to construct on the respondent's property, a two-storey dwelling house comprising 6000 square feet, a generator room, a driveway and retaining walls at a total agreed cost of EC$3,168,100.00, exclusive of owner supplied materials and fixtures. The said building works were to be carried out by the appellant in accordance with the terms of the contract, the approved drawings and specifications, and the Project Manual Bid Set document dated 29 th October 2006 (“the project manual”). It was a term of the contract that the appellant was to commence the building works no later than 15 th February 2008 and, subject to the stipulated exceptions of natural disasters and unforeseen delays that cannot be attributed to the appellant, to complete the main house and driveway on or before 15 th June 2009. In the event of the occurrence of any of these exceptions, the contract provided that a new timeline for completion of the said works is to be mutually agreed by the appellant and the respondent.

The appellant commenced the building works on 15 th February 2008. During the course of the construction some 88 items of extras and variations, approved by the respondent, were made to the original contract works. These included changing the design and construction of the original galvanised roof to a concrete roof with tiles with increased rafter sizes in April 2009, the respondent having agreed in writing to one of two options sent to him by the appellant. As a result of the extras and variations, the size of the dwelling-house increased from 6,000 square feet to approximately 17,000 square feet. The aggregate value of the extras and variations, as claimed by the appellant, was EC$1,954,165.42. Disputes arose between the appellant and respondent with regard to the building works, the amounts claimed by the appellant as the value of the extras and variations, and the value of credits to which the respondent claimed to be entitled as deductions from the contract sum. These issues remained unresolved.

By email sent on 10 th March 2010, the respondent requested the appellant to cease all work at the site as of said date until certain specified matters were agreed and informed the appellant that he will be placing 24-hour security at the site. The appellant's exclusion from the site was confirmed by email dated 12 th March 2010 from the respondent. Further attempts by the parties to resolve issues between them were unsuccessful. The appellant was never permitted back on the site, except to remove its property and, accordingly, did not resume the building works. By letter dated 12 th May 2010 the respondent, having, in April 2010, obtained separate reports from two independent structural engineers, terminated the contract with the appellant and requested that it remove all of its belonging from the site within 7 days.

Before the High Court of Justice, the appellant claimed against the respondent payment of the sum of EC$588,255.65 damages for breach of contract. The appellant's claim for the said sum is the net amount said to be due and owing to the appellant, as set out in the Ronald Gardner report dated 22 nd June 2010 (“the Gardner report”), after taking into account the value of the extra works and contract variations carried out by the appellant and the credits or savings due to the respondent under the contract. The appellant pleaded that the contract document dated 14 th February 2008 together with the project manual set out the full scope of works agreed between the appellant and the respondent, except for extras and variations. The appellant pleaded further that the respondent had, in breach of the contract, terminated the contract on 12 th March 2010 when he requested that the appellant remove its belongings from the building site altogether.

In his defence, the respondent made several allegations of poor or defective workmanship against the appellant and claimed damages for breach of contract and breach of an implied term to carry out the work in a ‘professional and workmanlike manner and with proper materials of good quality and that the work, when completed would be suitable for its required purpose, that is fit for human habitation.’ The respondent also disputed that the contract between himself and the appellant was entirely contained in the written agreement dated 14 th February 2008, but included the conditions set out in two letters to the respondent dated, respectively, 7 th February 2008 and 14 th February 2008 from Mr. Raymond Khouly, the managing director of the appellant company and engineer of the project. Accordingly, the respondent counterclaimed against the appellant for special damages in the aggregate sum of EC$3,077,466.50. The respondent also claimed damages for breach of contract against Mr. Jessy Khouly, the project architect, as an ancillary defendant.

Several reports of experts were admitted into evidence at the trial and considered by the trial judge in determining the issues of liability and damages with respect to the claim, defence and counterclaim, and ancillary claim. The trial judge, in his written decision, entered judgment for the appellant on its claim in the sum of EC$588,288.65; and entered judgment in favour of the respondent on his counterclaim against the appellant and on the ancillary claim, apportioning liability as between the appellant and the ancillary defendant under certain heads of damages, including professional fees incurred by the respondent in relation to the various expert reports.

Being dissatisfied, the appellant appealed against the decision of the trial judge entering judgment in favour of the respondent on his counterclaim. The notice of appeal sets out 19 grounds of appeal. These were distilled into three main issues for determination on appeal, namely: (i) whether the trial judge erred in upholding an implied contractual term to carry out the works under the contract in a professional and workmanlike manner using proper skill and care, and in concluding that the implied term did not conflict with the express terms of the contract; (ii) whether the trial judge erred in relying on or attaching weight or too much weight to the expert report of Mr. Hugh Schamber (“the Schamber report”) in coming to her decision on the counterclaim; and (iii) whether the trial judge erred in her approach to and evaluation of the expert evidence in determining whether the respondent had discharged the burden of proving that the cracks, leaks and damage were caused by poor workmanship on the part of the appellant, in breach of the implied term.

The respondent counter-appealed and argued that the trial judge erred in several respects when she gave judgment in the sum of EC$588,288.65 on the appellant's claim. However, an appeal by the ancillary defendant from the judgment on the ancillary claim was not before the Court of Appeal for its determination in this appeal.

Held: dismissing the appeal and affirming the orders made by the trial judge at paragraph 132(2) of the judgment save that the order at sub-paragraph (d) awarding 100% liability against the appellant for damage done to the interior of the building is varied to 50%; dismissing the counter appeal and affirming the order made by the trial judge at paragraph 132(1) of the judgment; and ordering 75 percent of the respondent's costs of the appeal to be paid by the appellant and the appellant's costs of the counter appeal to be paid by the respondent, such costs to be assessed by a judge of the High Court, if not agreed within 21 days, that:

  • 1. Where the evidence before the court below is largely documentary, the unique position of the trial judge in assessing the credibility of witnesses and the weight to be attributed to their evidence is of less significance than it would be in cases decided on the basis of mostly oral evidence. However, the restraint required of an appellate court in cases involving the findings of...

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