EMBD's appeal against order to pay Junior Sammy $83m dismissed

THE COURT of Appeal has dismissed the appeal of the Estate Management and Business Development Company (EMBD) which had been ordered to pay $82 million to Junior Sammy Contractors Ltd (JSCL) for work done on the Caroni Savannah residential development project in 2015.

In 2020, then High Court judge Mira Dean-Armorer granted JSCL’s application for summary judgment. On Wednesday, the Appeal Court dismissed all EMBD's complaints.

In the claim, JSCL said it was successful in its tender for the project and a written contract was executed on February 4, 2015, and completed its work. Of the 13 interim payment certificates (IPCs) certified by the project’s engineer, only six were paid. The contractor filed the lawsuit to recover the $82,804,219.19 certified in the seven remaining IPCs.

In its lawsuit, JSCL maintained the EMBD admitted to owing $ 77,658,948.91.

In opposition to the claim, the EMBD filed three defences alleging that JSCL assigned all their receivables under the contract to ANSA Merchant Bank, and it was only the third party that had the right to institute proceedings.

It also argued that the IPCs did not finally determine JSCL’s entitlement to payment, and if they were not correct they could be re-opened. The EMBD also asked for specific disclosure of documents since it had not been able to conclude its analysis of the IPCs since it had reason to believe that the works were over-certified.

The High Court refused the application for disclosure. In her ruling, Dean-Armorer held the engineer’s certificates entitled JSCL to the payments; found that the EMBD notified JSCL of its complaints three years after the engineer certified the IPCs and after the contractor filed its case to recover the money owed to it and had acknowledged the debt owed. She also held that EMBD failed to engage the dispute resolution mechanism under the contract.

The EMBD appealed contending the judge was wrong in law on eight issues.

In dismissing the EMBD’s appeal, Chief Justice Ivor Archie and Justices of Appeal Charmaine Pemberton and Ronnie Mohammed ordered the company to pay JSCL the costs of the appeals and two-thirds of the costs of the applications made in the High Court.

Boodoosingh, who wrote the decision, said the judge was correct to decline the EMBD’s application for disclosure to determine if it had a defence on any issue raised by JSC as it suggested a “fishing expedition” given the wide berth of documents it was asking for.

“The application for disclosure could not legitimately aid EMBD to develop its pleaded case. There is no reason in the circumstances to disturb the judge’s order on this matter,” the Appeal Court held.

The judges also held that the EMBD could not come to court and say JSCL was not entitled to payment without saying why.

“Facts which can show they are not entitled to payment must be pleaded…EMBD needed to go further in its pleaded case to allege facts to establish that JSCL was not entitled to the payment…

"The mechanism for these matters to be determined were stated in the contract. The engineer’s role, as an agent of EMBD, was to examine work done and then to issue the IPCs for work certified,” Boodoosingh said.

“In other words, the contract provided a mechanism/process for a claim of this kind. That was not adhered to by EMBD. Since there was a failure to follow the terms of the contract, EMBD is stopped from making this claim. This fortifies the view therefore that the trial judge was not plainly wrong in concluding that JSCL was entitled to summary judgment as the claim made by it was indefensible,” he added.

Boodoosingh also said there were certain “leaps” in EMBD’s defence. “It is a stretch to say that works were incorrectly certified simply on the basis that they equalled the invoices put in by JSCL.

“This is what the contract provided for. Certifying what the contract provided for cannot of itself lead to the suggestion of incorrect certification. There must have been more than that.”

He also found when the EMBD acknowledged the debt owed, there was no qualification that the sums were subject to verification.

“It is in that context that the judge may have concluded this was an acceptance of the debt due. It is difficult to see how this was an unreasonable conclusion that she came to.

“It was unnecessary, however, to rely on this letter to grant summary judgment. Put another way, the judge was entitled to conclude, based on the pleaded cases and specifically the deficiencies in EMBD’s pleaded case, that there was no defence with a realistic prospect of success.”

The mega contractor's claim for summary judgment was filed in December 2018 seeking to recover $82,804,219.19 plus interest for sums due and owing on unpaid invoices after completing works on the Caroni Savannah residential development project left undone by another contractor which had been appointed by the EMBD in May 2010 to develop the project.

The works were supposed to be completed by the other contract H Lewis Construction by October 2011. The judgment noted they were either not done or not completed and in 2014, EMBD terminated the Lewis contract.

In January 2015, EMBD invited fresh tenders and JSCL submitted a tender for $231,235,125.36 plus VAT and was awarded the contract.

An independent engineer was appointed and JSCL did various works in 2015, submitting invoices for payment that were certified by the engineer.

Thirteen IPCs were issued by the engineer and EMBD paid six in full, one partially and six were left unpaid. The contract then informed EMBD that the unpaid invoices were assigned to Ansa Merchant Bank and in August 2016, the engineer presented a list of defects and indicated which were remedied and which were outstanding. By 2016, EMBD said the money outstanding could only be settled pending an audit directed by its line ministry but had not raised any issue that the defects had not been remedied.

In July 2018, Lewis filed a claim against EMBD over the termination of the contract, and later that year, JSCL filed its claim for outstanding payment and filed its application for summary judgment in March 2019. In January 2020, the High Court ruled on its application, approving it.

At the appeal, the EMBD was represented by attorneys Jonathan Acton Davis QC, Colin Kangaloo, and Danielle Inglefield while JSCL was represented by Ramesh Lawrence Maharaj, SC, Jagdeo Singh, Kiel Taklalsingh, Karina Singh, and Shastine Motilal.