State challenges payment on illegal contract

The State will challenge a decision of the Court of Appeal which ordered it to pay a contractor the sums owing for the proposed development of the San Fernando harbour almost two decades ago.

The Attorney General was given permission today to appeal to the Privy Council the decision of Justices Nolan Bereaux, Prakash Moosai and Judith Jones.

In December, the judges dismissed the State’s appeal and affirmed the orders of Justice Frank Seepersad in 2014 in which he ordered that Trinsalvage Enterprises Ltd should be paid the sums owed to it on a $5.75 million contract with the Ministry of Works in 2000.

Trinsalvage had sued the State, claiming loss and damages for breach of contract and $4,997,021, representing work done on the project. The State argued that the contract was not enforceable, since the permanent secretary (PS) of the Ministry of Works, who approved the award of the contract to Trinsalvage, was not authorised to do so, as such approval went against Central Tenders Board (CTB) regulations.

The high court and the appellate court held that the contract was illegal but ordered that Trinsalvage was entitled to recompense for work done on a
quantum meruit (what one has earned) basis. A joint independent expert was to have been appointed to determine and/or ascertain the value of the work done by Trinsalvage, which will be bound by that valuation.

In its intended appeal to the Privy Council, the State says there are genuinely disputable issues of law on whether it can be liable on a
quantum meruit basis for services provided at the request of one of its servants who had no authority to enter into a contract, but did so purportedly on behalf of the State.

In his decision in December, Bereaux held that if it was intended to prohibit the enforcement of rights, other than through a contract under the authority of the CTB, it would have been expressly set out in the relevant act.

“Further, not only has the State benefited from the works, but all moneys due on the principal have been paid in full although the contract was unenforceable.

“Indeed, the full facts of this case have surely not been revealed. It is more than a little odd that no objection was taken to payment of the principal which was comfortably over the statutory limit of the PS’ authority but strong objection to the variation costs has been taken,” Bereaux said.

The State is contending that the company is entitled to nothing and will argue that the
quantum meruit principle does not apply to a void contract of which it is a part, nor can one of its employees bind it to do something the law does not allow. Attorneys Anand Singh and Mandavi Tiwarie represent Trinsalvage.

Most recently, the Government announced plans for the continued development of the area surrounding King’s Wharf in San Fernando. The first phase of the project began in 2017, and includes reclaiming of 3.8 hectares of land at King’s Wharf and relocating the Public Transportation Service Corporation’s maintenance facility, as well as squatters occupying land along the former Trinidad Government Railway line.