Privy Council upholds termination of quarry contract over theft allegations

A quarry contractor whose contract was terminated by Readymix Ltd in 2013 has lost its appeal in the Privy Council.

In a ruling on February 6, Lords Briggs, Hamblen, Burrows and Lady Rose and Simler dismissed Woodford Construction Ltd's appeal, affirming that Readymix (West Indies) Ltd lawfully terminated its contract after finding that Woodford removed raw gravel (pitrun) from its quarry without proper verification, amounting to theft.

Woodford Construction’s challenge was dismissed at the High Court. On November 22, 2018, Justice Avason-Quinlan held there had been theft of pitrun entitling Readymix to terminate the contract.

The Court of Appeal later upheld the finding of theft of pitrun and dismissed the appeal. Woodford Construction then appealed to the Privy Council contending it was unfair for Readymix to claim theft when it was not pleaded at the trial. The operator’s attorneys Daniel Feetham, KC, and Rowan Pennington-Benton, both of whom were instructed by Freedom Law Chambers, headed by Anand Ramlogan, SC, argued the local courts erred by misunderstanding the requirements to prove a case of theft.

The dispute arose from a November 2013 contract allowing Woodford to excavate and remove up to 1,000,000 cubic yards of pitrun from Readymix’s Bermudez quarry.

The contract required strict verification of each truckload before removal, with payments made in advance. Readymix terminated the contract in June 2015, initially citing a general review of its operations. However, after Woodford filed a lawsuit for wrongful termination, Readymix claimed that Woodford had removed pitrun without following the verification process, effectively stealing it.

Readymix alleged it was not satisfied Woodford verified the actual quantity of pitrun extracted and removed from the quarry between the period November 2013-July 2015.

Woodford was required to pay Readymix $21 plus VAT for a cubic yard of pitrun and excavated approximately 214,332 cubic yards during the period in question.

At trial, Justice Quinlan-Williams found that Woodford Construction trucks had bypassed Readymix’s verification system, resulting in unaccounted pitrun leaving the quarry. The judge ruled that this constituted theft under the contract’s terms.

Justices of Appeal Mira Dean-Armorer, Vasheist Kokaram and Malcolm Holdip upheld the trial judge’s decision, rejecting Woodford’s claims of procedural unfairness. It ruled that while failing to follow the verification process did not automatically equate to theft, the trial judge had sufficient evidence to conclude that Woodford Construction engaged in dishonest removal of pitrun.

In its appeal to the Privy Council, Woodford Construction’s attorneys argued dishonesty was a key element of theft which the lower courts failed to establish.

However, the Privy Council rejected this argument, ruling that dishonesty was implicit in the findings. The Board noted that Woodford’s failure to account for the removed pitrun, coupled with a significant spike in recorded sales when inspections were conducted, pointed to deliberate wrongdoing.

Lady Simler also held it was impermissible for Woodford Construction to challenge a perceived inadequacy of the evidence when the operator did not appeal the lower courts’ concurrent finding of fact.

The Privy Council reaffirmed that Readymix had a valid contractual basis to terminate Woodford Construction’s contract due to theft.

As she analysed Woodford Construction’s arguments, Lady Simler said, “Woodford effectively accepted that if the judge rejected Woodford’s case and found that there was unverified taking of pitrun, there would be nothing to rebut the inevitable inference that this was deliberate taking and dishonest.

“The verification procedure was not a mere administrative process for which Readymix was solely responsible, as Woodford has suggested. It was fundamental to the operation of the contract.

“Against that background, the judge’s finding, in the context of the contract between Woodford and Readymix, that there was deliberate taking of pitrun without following the verification procedure, and therefore without payment on the dates alleged, carried with it a finding of dishonesty.”

Although admitted both courts could have “better spelled out” the findings of theft, Lady Simler said “the implication of dishonesty was obvious” and “cannot be faulted.”

“For all these reasons, neither the judge nor the Court of Appeal made any error of law that vitiates the findings of fact made by the judge that Woodford removed pitrun without accounting for it, in circumstances importing dishonesty and that this justified termination of the contract.”

The Privy Council also ruled there was no exceptional reason to overturn the lower courts’ findings.

“...The Board does not consider that there is anything at all exceptional about the challenge Woodford seeks to make to the concurrent findings of fact made in these proceedings.

“The Board is not persuaded that the high threshold for

establishing an exceptional basis for challenging concurrent findings of fact in these proceedings has been met.

“To the contrary, Woodford effectively invites the Board to revisit the issues considered at length by the trial judge and the Court of Appeal, in the hope of persuading the Board that those courts failed properly to evaluate the oral evidence in light of the documentary record. That is not an appropriate course to take on a second appeal to the Board.”

Jason Mootoo, SC, and Tamara Toolsie represented Readymix at the local courts and the Privy Council.