Quin J
Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 1 of 39 IN THE GRAND COURT OF THE CAYMAN ISLANDS 1 HOLDEN AT GEORGE TOWN 2 Cause No: 425/2007 3 4 5 BETWEEN: 6 DAWN SMITH (Trading as 7 SUMMIT) 8 9 PLAINTIFF 10 11 AND: 12 TRICIA MCDOOM 13 14 DEFENDANT 15 16 17 Appearances: Ms. Vanessa Allard of Brooks & 18 Brooks for the Plaintiff 19 20 Mr. Robert Jones of Ritch & Conolly 21 for the Defendant 22 23 24 Before: The Hon. Mr. Justice Charles Quin 25 Heard: 8th and 9th February and 19th and 20th 26 May 2010 27 Plaintiff’s written submissions filed: 31st May 2010 28 Defendant’s written submissions filed: 31st May 2010 29 30 RULING 31 32 33
The Plaintiff, Dawn Smith conducted a business as a building and renovation 34 contractor, trading as Summit. On the 21st September 2007, the Plaintiff issued a 35 Writ of Summons and Statement of Claim, which claimed $32,000.00 and a 36 further $4,995.00 for work done to the Defendant’s premises at McDoom Lane, 37 West Bay, which was registered as West Bay Block 5B Parcel 292, (“the 38 Premises”), and owned by the Defendant. 39 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 2 of 39 1
The Plaintiff claimed the sum of $32,000.00 for work undertaken on the basis of 2 a request by the Defendant to carry out initial renovation work which involved 3 separating the premises in question into four separate apartments and installing 4 and separating electrical and plumbing works for each of the four apartments, as 5 well as for a laundry room. In addition, the Plaintiff claimed a further sum of 6 $4,995.00 for further costs and expenses which were incurred due to interference 7 from the Defendant’s agent and mother, Mrs. Donna Welcome (“Ms. 8 Welcome”). 9 10
The Plaintiff claimed that, in breach of their agreement, the Defendant had 11 refused to make payment of the agreed sum of $32,000.00 for the further work, 12 which the Plaintiff pleaded were completed. 13 14
The Defendant admits that she entered into an agreement with the Plaintiff, for 15 the Plaintiff to carry out certain works. However, The Defendant avers that the 16 terms of the agreement between the parties have not been properly pleaded by the 17 Plaintiff. 18 19
The Defendant filed a Defence and Counterclaim on the 23rd October 2009 in 20 which she denies that the Plaintiff completed the work she was required to 21 complete. The Defendant avers that the Plaintiff failed to perform and complete 22 the work she agreed to do and, the Defendant further denies that the Plaintiff is 23 entitled to the sum of $32,000.00 or the further sum of $4,995.00. 24 25 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 3 of 39
Furthermore, the Defendant averred in her defence that the Plaintiff failed to 1 carry out the work with reasonable skill and care, and or failed to carry out the 2 work in a timely manner and or failed to complete the work at all and or failed to 3 carry out the work in compliance with requirements of the relevant statutory 4 bodies and or legislation. 5 6
The Defendant in her Counterclaim avers that as a result of the failure on the part 7 of the Plaintiff to complete the works in accordance with their agreement, the 8 Defendant had suffered loss and damage in incurring the costs of remedial works, 9 and or the costs of hiring alternative contractors and therefore the Counterclaim 10 claims damages for loss and damage as a result of the Plaintiff’s breach of 11 contract as aforesaid. 12 13
On the 10th June 2008 the Plaintiff filed her Reply to the Defendant’s Defence 14 and her Defence to the Defendant’s Counterclaim. 15 16
The Plaintiff pleaded that she agreed to separate the electrical connection to the 17 house for four (4) apartments, plus the laundry area, install cabinets in each 18 apartment, separate the water connections for each apartment and install 19 appliances including cabinets, air conditioning units and appropriate plumbing, 20 and finish interior and exterior walls, install appropriate fixtures and fittings and 21 paint the apartments. 22 23
The Plaintiff averred that the works were carried out with all due care and 24 attention, and that the Defendant agreed that upon completion of the works, the 25 Plaintiff would be paid the agreed sum of $32,000.00. 26 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 4 of 39 1
In her defence to the Counterclaim the Plaintiff pleaded that the Defendant had 2 indicated her complete satisfaction with the standard of the work performed by 3 the Plaintiff and denied that the Defendant was entitled to any sum by way of a 4 Counterclaim. 5 6 Relevant Chronology 7 8
Summit was operated by the Plaintiff and her husband, Mr. Damien Thomas 9 (“Mr. Thomas”), and they both acted at different times as the Project Manager. 10 Summit had been in business since approximately 2002. 11 12
The Defendant engaged the Plaintiff and, on or about the 8th January 2004, the 13 Plaintiff provided an initial estimate of $76,444.00 to carry out these works. 14 15
On or about the 5th August 2004 the Plaintiff provided a revised estimate of 16 CI$126,750.00 to carry out the works, together with cost estimates. 17 18
On the 11th September 2004 Hurricane Ivan hit Grand Cayman, and accordingly 19 the project was delayed. 20 21
In October 2004 the Defendant instructed Arnold Berry of Island Drafting to 22 prepare plans and the Court refers to Exhibit 4, which are the three plans – 23 “AOI”, the Electrical Plan (“EP”)/(“EOI”), and the Plumbing Plan (“PP”) 24 “No.#6”. 25 26 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 5 of 39
On or about the 11th November 2004 the Defendant paid the Plaintiff 1 CI$43,787.00 for Phase I of the works. In December 2004 plans were submitted 2 to the Planning Department. 3 4
On or about the 14th January 2005, the Defendant paid a second installment in the 5 sum of CI$36,627.00. 6 7
On or about January and February 2005 the Plaintiff and the Defendant discussed 8 plans for an additional two-bedroom apartment at the existing property. 9 10
On or about the 1st March 2005 the Defendant prepared a draft contract dealing 11 with existing works and Additional Works, and sent a draft to the Plaintiff. 12 13
On or about the 19th March 2005 the Defendant sent an amended draft contract to 14 the Plaintiff. Initially the draft contract had both the names of the Plaintiff and 15 her husband, Mr. Thomas, but ultimately, at the Plaintiff’s request, Mr. Thomas’ 16 name was deleted and the contract was ultimately signed by the Plaintiff and is 17 dated the 24th March 2005. 18 19
It became apparent from both the Plaintiff’s and the Defendant’s evidence that 20 the Plaintiff had been paid for the initial works which was contractually agreed at 21 $126,750.00, and that the Plaintiff agreed to do the additional work and wait until 22 it was completed to receive the payment of $32,000.00 from the Defendant. 23 24
It is clear from the documentation and exchange of emails, and also from the 25 Plaintiff’s own evidence, that the initial $126,750.00 included the separation of 26 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 6 of 39 the Premises into 4 apartments. The $32,000.00 was for the Additional Works – 1 particularly in relation to the electrical work, plumbing work, and also to turn the 2 studio apartment into a one-bedroom apartment, namely apartment ‘A’. 3 4
I find both the Plaintiff and the Defendant to be honest witnesses. The Plaintiff 5 honestly accepted that it was her signature on the contract and, although she may 6 not have read it at the time, she does not deny receiving it and she does not deny 7 receiving email and hardcopies of the contract. 8 9
The Plaintiff also honestly accepted that it was she who asked the Defendant to 10 remove her husband’s name from the document, and therefore, the Court finds 11 that the contract was agreed between the Plaintiff and the Defendant for the 12 Additional Works to be completed by the Plaintiff in consideration of 13 $32,000.00. 14 15 The Contract 16 17
The contract stipulates that the parties wished to enter into this agreement, the 18 terms of which superceded the original agreement. At clause 1.8 the contract 19 defines “works” and stipulates that the Plaintiff would carry out works, as set out 20 in the documents listed at Schedule ‘A’. Schedule ‘A’ provides at Schedule A1 – 21 the drawings prepared by Island Drafting, which are Exhibit 4 and are referred to 22 above. 23 24
The contract specifically refers to: 25 26 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 7 of 39 “The works include the Additional Works, works to the house itself and the 1 exterior works such as the septic tank, drainage, demolition of water cistern 2 and existing septic, access roads where required in accordance with the 3 drawings listed in Schedule A.” 4 5 It is clear from the contract that landscaping had been deleted by the parties. The 6 contract also refers to “Additional Works” required due to the extension to 7 Apartment ‘A’. 8 9
The contract provided for the Defendant to obtain all Planning Department 10 approvals, and that the Plaintiff was to perform the work and comply with all 11 applicable Cayman Islands laws, regulations and subordinate legislation, and to 12 carry out any changes instructed by an appropriate representative of the Cayman 13 Islands Planning Authority and/or Building Control Unit. 14 15
Clause 1.2 states that the contract period for “the Works” and the “Additional 16 Works” was to be three (3) months from the 24th March 2005. Clause 1.3 states 17 that the completion date is the date on which the Works would be completed and 18 a Certificate of Occupancy obtained from the Authority, deeming the site ready 19 to be handed over to the Principal and ready for her use. 20 21
The contract stated that the price for the Additional Works was to be agreed and 22 was subsequently agreed at $32,000.00, and it is common ground that this was to 23 be paid upon completion of the Additional Works, and once the Defendant had 24 obtained the necessary financing. It is also common ground that the Defendant 25 would obtain financing after the completion date and after the Certificate of 26 Occupancy was granted. The Plaintiff was then to be paid by the Defendant for 27 the completed Additional Works. 28 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 8 of 39 1
Clause 5.2 stated that if the Plaintiff failed to complete by the end of the contract 2 period, the Defendant could serve a Notice to Complete, making time of the 3 essence. In addition, under Clause 5.3(a) the Plaintiff was at liberty to terminate 4 the contract if the Defendant interfered or obstructed the work. 5 6 The Plaintiff’s Position 7 8
The Plaintiff claims that the Defendant breached the contract dated the 24th 9 March 2005 by failing to pay to the Plaintiff the sum of $32,000.00. 10 11
The Plaintiff’s evidence is that she completed the work. The Plaintiff accepts that 12 the work was not completed within three months, but that in any event, it was 13 completed, and that the tenants were able to move into the apartments. The 14 Plaintiff maintains that she discharged her obligations under the contract. 15 16
Accordingly, the Plaintiff is claiming the $32,000.00 for the Additional Works 17 done. In addition, the Plaintiff’s evidence is that, because of the conduct of the 18 Defendant and the interference of the Defendant’s mother, Ms. Welcome, the 19 Plaintiff had to incur additional expenses in the sum of $4,995.00 for electrical 20 works and labour costs and further subcontractors’ fees. 21 22
When one reviews the plans submitted to the Planning Department, namely 23 Exhibit 4, it is clear that the site plan refers to a storm drain, garbage containers, 24 six parking spaces with parking stops, Asphaltic concrete on the parking bays, 25 works on the road around the building on Parcel 292 and an existing septic tank. 26 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 9 of 39 1 Defendant’s Position 2 3
The Defendant’s position is as pleaded in her Defence and Counterclaim referred 4 to paragraphs 5, 6, and 7 above. 5 6
The Defendant maintains that the Plaintiff was in breach of the terms of the 7 contract by failing to perform her contractual obligations, either within the 8 timeframe provide for in the contract, or at all. 9 10 Review of the Evidence and Chronology 11 12
In order to understand the material facts and the chronology in this matter it is 13 necessary for the Court to carefully review the evidence of both parties and the 14 email communications between them. 15 16
It is clear to the Court that the Additional Works are as set out in the contract. 17 The Plaintiff was to convert the laundry room into Apartment ‘A’; complete the 18 units ‘A’, ‘B’, ‘C’ and ‘D’; install the necessary electrical fixtures for each 19 apartment and to ensure that they were in accordance with the EP/EOI so that 20 each apartment would be self-sufficient when connecting to the electricity supply 21 from the Caribbean Utilities Company (CUC) and for purpose of renting to 22 tenants. The Plaintiff was to provide the relevant plumbing works and water 23 heaters for each apartment, in accordance with the PP. The Plaintiff was also to 24 install the necessary cabinets. In addition the Plaintiff was to complete the 25 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 10 of 39 necessary exterior walls, including painting them, and to ensure that the car 1 parking spaces and garbage receptacles were provided. 2 3
The Court finds that the parties did enter into a binding contract on the 24th 4 March 2005. It is clear from the evidence of both the Plaintiff and the Defendant 5 that the parties had discussed the terms of this contract, drafts had been 6 exchanged and both parties had made certain amendments. What is particularly 7 important is that the Plaintiff removed her husband, Mr. Thomas, from the 8 contract, leaving herself trading as Summit and thereby being the only party with 9 whom the Defendant made the contract. 10 11
The Plaintiff in her evidence stated, with some regret that she could not recall if 12 she had read the agreement, but, to her credit, she accepted that she received it 13 and that she also received a hard copy of it. 14 15
The Additional Works were mainly as set out above. In particular, they included 16 creating the one-bedroom apartment from the studio,, namely Apartment ‘A’, and 17 the additional electrical and plumbing works to the Premises, to ensure that the 18 four apartments were separate from each other as required by Planning. The 19 Additional Works were in addition to the works to the Premises itself and the 20 exterior works such as the septic tank, drainage, the demolition of the water 21 system and the existing septic tank, and the access road. 22 23
It is clear from the contract that the Plaintiff was employing subcontractors to do 24 to the Electrical Works. The electrical works were subcontracted to a Mr. Eric 25 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 11 of 39 Small supervised by Bells Electrical. The plumbing works were subcontracted to 1 a Mr. Gary Edgar. 2 3
As late as the 29th March 2005 the Defendant was urging the Plaintiff to sign the 4 contract, and indicating that time was important. The Defendant also noted that 5 the electrician and plumber had started their work at that time. 6 7
The contract was obviously signed by the 7th April 2005 and the Defendant gave 8 an initial review of the outstanding issues. On that date the Defendant said to the 9 Plaintiff that they needed approval for the Electrical Plan 10 11
At that time, the Plaintiff’s husband, Mr. Thomas, was still involved as he had 12 confirmed that the cracks in the doors and the windows had to be addressed. 13 Additionally, the Defendant had evidently discussed a coat of rendering with Mr. 14 Thomas. At that time the price specifications for the Additional Works were still 15 to be agreed. 16 17
On the 11th April 2005 the Defendant was still discussing matters with both the 18 Plaintiff, and with the Plaintiff’s husband, Damien. The Defendant’s email of the 19 11th April to both the Plaintiff and her husband demonstrated that the Plaintiff 20 and the Defendant had agreed on the $32,000.00 for the Additional Works. 21 22
As the Defendant stated at paragraph 33 of her Witness Statement: 23 24 “The $32,000.00 was to cover the additional works referred to in the 25 agreement, which meant the increased roof pitch and the extension of the 26 studio apartment into a one-bedroom, fully-fitted apartment. The “certain 27 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 12 of 39 works” referred to an agreement which meant the installation of the 1 additional paving and the additional electrical works.” 2 3 At this stage the Plaintiff and the Defendant seem to be in agreement on what 4 Additional Works needed to be done, the time period set out in the contract, the 5 completion date and the price. 6 7
On the 20th April 2005 the Defendant set out clearly in an email to the Plaintiff, 8 the items about which she had some concern. The Defendant said in this email 9 that she was concerned about cost overruns, and cited the sliding mirrored closet 10 doors. The Defendant stated that she was not fussed about the sizes, as long as 11 they are done. The Defendant drew attention to the cistern area and the parking 12 arrangements. Additionally, she expressed concern about the electrical supply, 13 and communications with CUC regarding meter boxes and electrical wiring. 14 Further, the Defendant raised the question of water meters and the required 15 number of meters. The Court notes that at item 10 of the email dated the 20th 16 April 2005 the Defendant raised the question of the septic tank, and enquired 17 whether they needed to install a well to run with the existing septic tank, or 18 whether there should be a new septic altogether. The Defendant specifically 19 stated that she would not bear any responsibility for unforeseen costs if it turned 20 out that the existing septic is useless. 21 22
On the 20th May 2005 the Defendant sent an email to both the Plaintiff and her 23 husband saying that she could not afford any delay past the end of June. The 24 Defendant reminded the Plaintiff that the contract ended on the 24th June, and the 25 bank was already requiring her to start repaying on the principal – a fact which, 26 the Defendant said, placed her finances in the “bright red area”. 27 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 13 of 39
In response to the Defendant’s concerns, the Plaintiff replied by email on the 23rd 1 May 2005 as follows: 2 3 “FYI: tentative schedule for jobs to be completed May 23 – 28: Internal 4 ceiling, insulation, block cross over between apts, masonry work will be 90% 5 complete, paint internal ceiling white, select internal wall colour, slect tiles, 6 install concrete board and insulate dividing wall.” 7 8 The Plaintiff concluded by saying that she hoped to start tiling on Saturday 9 (the upcoming Saturday) but this was uncertain. 10 11
On the 30th May the Plaintiff sent another schedule by email which read as 12 follows: 13 14 “tentative schedule to be completed May 29 – June 4: Install firewall 15 between units, complete tiling of both 2-bed units, complete painting of both 16 two bed units, install ¼ round on all windows, close floor in 1 bed unit, 17 install closet in 1-bed and studio unit, Prep bathrooms in 2-bed units for 18 tub/toilet/basin(white,) and, partition 1 bed unit – kitchen/living” 19 20
On the 9th June 2005 the Plaintiff amended her previous email to the Defendant 21 and the email read as follows: 22 23 “Schedule Amended UPDATE FOR LAST WEEK May 29 – June 4. Install 24 firewall between units – done; Completed tiling of both 2-bed units – 95%. (1 25 bath to be completed); Complete painting of both two-bedroom units – 90% 26 complete; Install ¼ round on all windows – done; Close floor in 1-bed unit; 27 Close floor in 2-bed unit – done; Prep bathrooms in 2-bed units for 28 toilet/basin (white) – 50% (1 bath to be completed); Install tubs in 2-bed 29 units – done.” 30 31
In another email on the 9th June at approximately 10 minutes after the previous 32 email, the Plaintiff set out her schedule for June 9-15 as follows: 33 34 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 14 of 39 “Install external doors for 2-beds and studio; Install toilet and basin 2-beds 1 and studio; Tile bath wall 2-beds; Tile studio unit floor and bath; Prime 2 studio with white paint; Completed tiling of both 2 bed units – 95% (1 bath to 3 be completed); Complete painting of both two-bed units – 90% complete; 4 Close floor in 1-bed unit; Prep bathrooms in 2-bed units for toilet/basin 5 (white) – 50% (1 bath to be completed). Target is to complete the 2-bed and 6 studio units remaining items are Cabinets, water heater, electrical fixtures.” 7 8
The Defendant’s position is that the work was not completed by the 24th June 9 2005, as set out in the contract, and, accordingly, on the 30th June 2005 the 10 Defendant sent the Plaintiff a list of outstanding items and also a Notice to 11 Complete pursuant to Clause 5.2 of the contract, informing the Plaintiff that she 12 must complete all the apartments, save for apartment A, by “two (2) weeks from 13 today,” that is, by the 14th July 2005, and apartment A by early August 2005. In 14 addition, the Defendant reminded the Plaintiff that time was of the essence, and 15 this was due to the fact that she, the Defendant, was expecting tenants. 16 17
The outstanding areas listed by the Defendant included many miscellaneous 18 items but she also drew attention to the septic tank and her expectation to see a 19 complete and operational septic system. 20 21
The most significant item in the list was item 10 and the number of electrical 22 works that were left to be completed. The Defendant highlighted the fact that the 23 Government/Planning would contact CUC once the final inspection had taken 24 place and asked the Plaintiff to check with her electrician and with Planning. The 25 Defendant said that apartments B, C and D needed to be inspected and passed by 26 the 14th July 2005 to give the prospective tenants sufficient time to sort out their 27 accounts with the utility company. 28 29 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 15 of 39
The Defendant also highlighted the fact that cabinets were to be installed by the 1 22nd July, as tenants had been told that the apartments would be available on the 2 25th July 2005. 3 4
The Defendant also said she had contacted Felicia Galbraith of Cayman National 5 Bank in accordance with the Bank’s request to make another visit to the site. It 6 was clear from the evidence before me that the Bank and the financing were 7 dependent on the completion of the Additional Works as set out in the contract. 8 9
On the 7th July 2005 the Plaintiff set out, in an email, works that were being 10 carried out. 11 12
It is accepted that Cayman experienced two hurricane warnings, and 13 consequently, there was some delay in the Additional Works being carried out. In 14 fact, the Defendant’s evidence was that the hurricane season had begun early and, 15 accordingly, when the Plaintiff asked for an extension of time – to the end of 16 August – to complete apartment A, the Defendant readily agreed. 17 18
On the 27th July 2005 the Defendant sent out another action list, which included a 19 number of miscellaneous items. Again, the important items were electrical, to 20 ensure that panel boxes and connections were made to allow the tenants to move 21 in. The Defendant, in that email, also enquired about the cabinets for apartments 22 B and C, the septic tank, and other miscellaneous items. 23 24 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 16 of 39
On the 28th July 2005 the Plaintiff informed the Defendant that she would be 1 unable to complete the electrical works on the apartments, even on a temporary 2 basis, because: 3 4 “The quotes we received from electricians were 4-6 times greater that our 5 current budget. Basically, they realized we were in a tight place in terms of 6 timing and therefore charged exorbitantly. The delay was caused by the 7 threat of several hurricanes and [the lack of] availability of certain material. 8 In addition the electrician on your project had a planned vacation 2 month 9 [sic] ago for the week of July 25th so that he could be home for the birth of 10 his child. Please inform your tenant appropriately as to the delay. A new date 11 of Aug 8th is given for temp power awaiting [pending] Planning approval. I 12 am truly sorry for the inconvenience.” 13 14
The Plaintiff had significant difficulties with the ordering of the cabinets. It 15 appears that cabinets were stolen and or damaged, and therefore cabinets were 16 only available for two of the four apartments. Accordingly, the Plaintiff said that 17 Cabinets needed to be re-ordered. On the 29th July the Plaintiff admitted that the 18 cabinet man was “stressing her out.” 19 20
By the 2nd August 2005 the Plaintiff said that the electrician was proceeding as 21 planned, and that all fixtures for apartments B, C and D should be done on the 2nd 22 August 2005. The Plaintiff added, “Plumbing should have been completed 23 yesterday” and she added that she would confirm whether inspection had been 24 done on that day. The Plaintiff said she was still receiving the runaround 25 regarding cabinets. 26 27
By the 25th August 2005, the Plaintiff was demanding payment of the 28 $32,000.00, even though it is clear from the exchange of emails and the evidence 29 that the work was not complete, and further, a Certificate of Occupancy had not 30 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 17 of 39 been obtained. It was always common ground between the parties that the 1 Defendant’s financing was dependent on a valid Certificate of Occupancy. 2 3
By the 9th August 2005 apartments still had no cabinets, there was no water to the 4 property nor was there electricity. The Defendant was having extreme difficulty 5 in renting out the apartments. Apartment B had no water, no kitchen sink, no 6 cabinets, and a stove that did not work. Accordingly, the Defendant accepted a 7 reduced rent. 8 9
The Plaintiff continued to have difficulty with the cabinets and in order to 10 progress matters the Defendant paid the Plaintiff the sums of $1,000.00 on the 11 22nd August 2005 and $500.00 on the 15th September 2005. 12 13
On the 25th August 2005 the Plaintiff confirmed that the electricians were unable 14 get back to work. No final approval had been given for the electrical works or the 15 plumbing works, and it appears from the witness statements of the Defendant, 16 and the evidence of both the Plaintiff and the Defendant, that these delays 17 continued, with only preliminary inspections from government departments 18 taking place. Accordingly, the Defendant was unable to rent the apartments at the 19 time she had promised. 20 21
It was the Defendant’s mother, Ms. Welcome, who eventually applied for the 22 Certificate of Occupancy on the 30th November 2006. At that time the Planning 23 Department stated that there were still outstanding items regarding drain 24 installation and additional parking. The Planning Department insisted on 25 replacing the four existing parking spaces and adding another two parking 26 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 18 of 39 spaces, as required by the plans. The Defendant paid Watler & Heslop the sum of 1 CI$3,125.00 for the installation of drain wells and CI$5,460.00 to Gire 2 Dominguez to execute the necessary parking arrangements 3 4
On the 12th April 2007 the Water Authority wrote to the Defendant stating that 5 the septic tank at the property had failed and was leaking untreatable wastewater 6 which was going over on to the adjacent lot. 7 8
It is clear to the Court that the septic was a necessary item that had been brought 9 to the Plaintiff’s attention on a number occasions. In addition, the terms of the 10 Planning permission included a provision that required a new septic tank and the 11 Plaintiff had provided for a new septic tank in her estimate. 12 13
As this was an urgent matter the Defendant paid out the sum of CI$5,167.00 in 14 order to empty and remove the old faulty septic tank and install the new septic 15 tank. 16 17
At this time relations between both the Plaintiff and the Defendant had 18 disintegrated. The Plaintiff was not willing to pay the expenses that the 19 Defendant had incurred to complete the Additional Works to the premises. It is 20 this Court’s view that the delays were unreasonable and excessive and continued 21 from the 30th June 2005 until April 2007. 22 23
It is quite clear from the evidence of both the Plaintiff and the Defendant that 24 there were a number of factors which prevented the Certificate of Occupancy 25 from being granted. The Defendant was forced to implement a number of repairs. 26 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 19 of 39 This was something that was agreed to be completed by the Plaintiff in the 1 contract. In order to obtain the Certificate of Occupancy the Defendant found 2 herself saddled with effecting these repairs which cost her the sum of 3 approximately $19,507.97. As an interim measure, an application for special 4 permission to occupy the apartments. This was applied for on the 15th December 5 2006, and this special permission was granted on the 22nd December 2006. The 6 Certificate of Occupancy was not granted until the 21st March 2007. 7 8 Plaintiff’s Reasons for the delay in completion 9 10
The Plaintiff provided evidence in her witness statement dated 1st June 2009, 11 setting out the reasons for the delay in completion of the works. She said she had 12 many difficulties sourcing materials and labour to conduct construction and 13 repair work to the premises. She avers that, not only was there initially a shortage 14 of labour, but also some severe shortage of materials. The Plaintiff candidly 15 admitted that because of the difficulties with sourcing materials and arranging for 16 labour, the completion of the Additional Works took, unavoidably, far longer 17 than initially anticipated. 18 19
It is apparent from the Plaintiff’s evidence that she had no formal training as a 20 building contractor. She had no engineering qualifications, nor had she any on 21 site experience as a mason, or a plumber or a carpenter or an electrician. In fact, 22 whilst running Summit building contractors the Plaintiff had a very senior and 23 fulltime position as the Director of Technology for a major international bank 24 and was also its Regional Head for Data Management, covering the Cayman 25 Islands, New York, Curaçao and BVI. 26 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 20 of 39
In Summit’s construction business, the Plaintiff and her husband, Mr. Thomas, 1 both acted as Project Manager. However, no evidence was produced to 2 demonstrate that Mr.Thomas had any experience or qualifications to be a 3 building contractor, nor was there any evidence that he had any on-site 4 experience as a mason, or a plumber, or a carpenter or an electrician. I 5 understand from the Plaintiff’s evidence that he had a B.Sc. and an M.Sc. in 6 Business Administration. In addition, he also had a fulltime job in the Financial 7 Services industry. Accordingly, the Plaintiff’s evidence was that in the times he 8 could not be the Project Manager, she would fill in, and when she could not be 9 the Project Manager, he would fill in. This would have to be described as a very 10 haphazard and unreliable approach to the running of a business that clearly 11 demands a strict regime of supervision from those in charge. 12 13
Also, at various times, they had an employee called Stanford Campbell who 14 apparently supervised the workers on the site because the Plaintiff and her 15 husband recognized that they both had fulltime jobs in the financial services 16 industry – which this Court notes are themselves very demanding occupations. 17 18
The Court is of the view that although the business may have had some success 19 over the period of time prior to the Plaintiff having been contracted to do the 20 Additional Works, it is extremely unsatisfactory for the Plaintiff to run her 21 business in this way. Construction and renovation for four apartments is not a 22 simple matter and it needs experience, expertise and most of all fulltime 23 attention. 24 25 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 21 of 39
In addition to the fact that both the Plaintiff and her husband had fulltime jobs, 1 they were, during the material time, experiencing significant marital discord and 2 I understand that divorce proceedings had commenced. Although the evidence is 3 that the Defendant was sympathetic to the Plaintiff’s marital difficulties, the 4 Additional Works necessary to renovate the Premises should not have suffered as 5 a result of this distraction. 6 7
The Plaintiff had constant problems in the electrical area. After Mr. Eric Bell, a 8 Mr. Merlin Wells was the next subcontracted electrician, but his performance, 9 again, was less than satisfactory. At varying times the Plaintiff employed other 10 electricians by the names of “Cleo Scott,” “Eric” and “John”. The Plaintiff in her 11 evidence candidly acknowledged that her biggest problem was the failure to 12 perform the necessary electrical works. Various electricians walked off the job 13 for different reasons. The costs in this area were constantly increasing with each 14 new electrician. Moreover, there were many times when no electrical work was 15 being carried out. Again, this was the liability of the Plaintiff and to a large 16 extent caused the Plaintiff to be in breach of her contractual obligations to the 17 Defendant. 18 19
In her email dated the 28th June 2006 to the Defendant the Plaintiff says: 20 21 “It seems that the electrician will be the hold up again, your mother is 22 excellent at getting him to work, so perhaps you could encourage her to do 23 this.” 24 25
Almost a month later, on the 24th July 2006 the Plaintiff said in another email: 26 27 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 22 of 39 “The electrician has run off … again. Saga continues…” 1 2
The Defendant, on many occasions, reminded the Plaintiff of her contractual 3 obligations and of the need for the work to be completed on a timely basis. It is 4 clear from the Plaintiff’s evidence that she was unable to complete the work she 5 agreed to do in the time period set out in the contract. The Plaintiff, in fact, 6 admitted to the Court that she did not respond to the prevailing circumstances on 7 site as much as she should have. She said in her evidence that, with hindsight, she 8 should have responded to the Defendant’s emails but due to her problems with 9 the different electrical contractors, her ongoing divorce, her failure to obtain and 10 install the cabinets and, what she herself described as a “spell of bad luck[which 11 all] had a knock-on effect.” The Plaintiff actually described the failure to install 12 the cabinets as having the “wind taken out of her.” 13 14
The Plaintiff experienced what she termed as very bad luck with all her 15 electricians – with the best example being in her evidence under cross 16 examination that “Martin” left in September 2006. Martin had told the Plaintiff 17 that he was waiting for a particular inspector however, Martin was, not only not 18 doing his job, but he also went off the site. 19 20
On the 11th August 2006 the Plaintiff writes to the Defendant and states: 21 22 “Look!! You informed me of the deadline but I can’t force people to work. 23 The electrician received his money and then was late a week. What the f… do 24 you want me to do about that…I could have paid many electricians 25 previously the 10K or 4.5K they were asking, but why should I when I was 26 not going to get it back, thus it took time to find a decent electrician that 27 would work for 2K, given all the circumstances. Not too many people want to 28 pick up someone else’s work.” 29 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 23 of 39
On the 24th July 2006 the Plaintiff stated in an email: 1 2 “The final plumbing inspection is tomorrow … the final structural inspection 3 is July 28th … I have seen the estimates [the estimates for the electricians]… 4 only 1 day work left. Apt A is 95% complete.” 5 6
Yet on the1st August 2006 the Plaintiff said in her mail: 7 8 “I have had three other people look at the job and they all estimate 3-4 days 9 to complete Apartment A and 2-3 to review all previous work before 10 inspection.” 11 12
On the 2nd August 2006 the Plaintiff said: 13 14 “The final plumbing and building inspections are complete … just waiting on 15 electrical.” 16 17
On the 14th August 2006 the Plaintiff said: 18 19 “The electrician is almost completed, should be finished by Wednesday and 20 apply for inspection assuming all goes well final inspection for electrical 21 should be done this week.” 22 23
Yet, on the 29th August 2006 the Plaintiff in an email stated: 24 25 “We had a preliminary electrical inspection. The inspector provided the 26 electrician with a list of things that need to be done. He will start working on 27 them today and re-apply for inspection this week.” 28 29
On the 4th September 2006 the Plaintiff stated: 30 31 “The electrician has not returned to the island…thus no progress has been 32 made. He assures me that he will be back to finish this week and arrange 33 inspection immediately following.” 34 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 24 of 39
On the 13th September 2006 the Plaintiff stated: 1 2 “The electrician has finished. The a/c guys were supposed to complete a/c 3 today but I had difficulty getting them keys to enter. Thus they will be by 4 tomorrow to complete. Inspector said he would be able to do the inspection 5 on Friday. My guys will finish on the weekend. Should have CO by 6 September 26th assuming no delays from Planning.” 7 8
On the 23rd September the Plaintiff said: 9 10 “The Inspector issued additional changes…if all goes well… we will have 11 signoff on Monday the [25th September 2006].” 12 13
On the 2nd October 2006 the Plaintiff said: 14 15 “Electrician asked us to bear with him. He is going through some personal 16 stuff at the moment. There are 12 open items from the Inspector. 4 have been 17 completed…Electrician said things should be done and he should have 18 request to CUC submitted for full power by Monday [9th October 2006].” 19 20
On the 23rd October 2006 the Plaintiff stated: 21 22 “Final inspection complete. We will need to arrange to get the CO [Cert of 23 Occupancy] issued.” 24 25
However, by the end of October 2006 the Plaintiff had left, she says having 26 completed all the work she could. On the 31st October 2006 the Defendant wrote 27 to the Plaintiff and stated that: 28 29 “Ken Wright has informed us that certain plumbing/building inspections 30 have not been signed off.” 31 32 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 25 of 39
In effect, the Central Planning Authority did not issue the final Certificate of 1 Occupancy for the Plaintiff’s Premises until the 24th March 2007. 2 3
The Plaintiff employed subcontractors to complete the Additional Works 4 she had contracted to do for the Defendant. When her subcontractors failed to 5 complete the Additional Works, the risk and liability fall squarely on the 6 Plaintiff. 7 8
For many reasons, not least of which has been the failure of her 9 subcontractors to do the work, the Court finds that the Plaintiff is in breach of her 10 contract by failing to carry the works in accordance with the plans prepared by 11 Island Drafting. The Site Plan dated December 2004 which bears approved 12 stamps dated the 6th February and 8th March 2005 refers to a storm drain, garbage 13 containers, six parking spaces with parking stops, Asphaltic concrete on the 14 parking bays and the roads around the building at Parcel 292, and, an existing 15 septic tank. 16 17
The Plaintiff throughout the course of the 18 months of delay on the 18 project consistently sought to lay blame for delays at the feet of workers, 19 subcontractors, the Defendant’s mother, the Inspectors’ inspection reports and so 20 on. The Court finds no evidence of the Plaintiff taking full or any responsibility 21 for the delays as the contractor and the signatory to the contract, either in her 22 email responses and explanations to her client, the Defendant, or by putting in 23 place successful remedial actions to avoid the repeated delays. 24 25 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 26 of 39
The Court has examined the evidence before it and cannot find where the 1 Defendant’s agent and mother, Ms. Welcome, interfered in a negative manner to 2 affect the Plaintiff’s capacity or ability to complete the Additional Works. In fact, 3 as was recognised by the Plaintiff, all Ms. Welcome was trying to do was to 4 assist the Plaintiff in completing the Additional Works so that the Defendant’s 5 tenants could move in to the apartments, to the satisfaction of Cayman National 6 Bank thereby ensuring that the financing would be made available to pay the 7 Plaintiff for the completed Additional Works. 8 9
The Court finds that the Plaintiff failed to provide two of the required six 10 parking spaces and also, the Plaintiff was in breach of the contract by failing to 11 adequately cover the parking bays and the reduced roadway area with a sufficient 12 quantity of Asphaltic concrete. 13 14
Despite the fact that the Plans required a storm drain and the 24th March 15 2005 contract refers to drainage, the Court finds that no storm drains were 16 installed by the Plaintiff. 17 18
Additionally, despite the fact that the Plans refer to garbage containers, 19 no garbage containers were supplied by the Plaintiff. 20 21
The contract dated the 24th March 2005 refers to the demolition of the 22 existing septic tank and its replacement. The Plans also refer to the existing septic 23 tank and an FEFF well. Despite repeated warnings by the Defendant, the Plaintiff 24 failed to check whether the old septic tank was fit for the purpose. Clearly, from 25 the report of the Water Authority it was faulty. Accordingly, the Court finds that 26 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 27 of 39 the Plaintiff is in breach, for failing to install a new septic tank and thereby 1 causing the Defendant further loss and damage. 2 3
There is evidence that the Plaintiff also failed to complete certain 4 painting and caulking work. In addition, the Court finds that a number of 5 appliances such as toilet paper holders, towel rails and items in Apartment 4 had 6 not been completed, forcing the Defendant to make good these faults. 7 8
It is common ground that the Plaintiff voluntarily left the site in October 9 2006 – that is, some five to six months before the Certificate of Occupancy was 10 obtained. At no time did the Plaintiff exercise her right under the contract to 11 either suspend or terminate the agreement. 12 13
Although Clause 5.4 states: 14 15 “Upon termination of this Agreement by either the Contractor or the 16 Principal, the Contractor remains entitled to, and the Principal must ensure 17 as far as reasonably practicable, that the Contractor will receive the 18 reasonable proportion value of the Works done by the Contractor up to such 19 date.” 20 21
It is apparent that there were some negotiations between the parties to 22 reach a settlement but these efforts broke down and ultimately the Plaintiff issued 23 her proceedings in September 2007. 24 25
On the evidence before this Court the Plaintiff voluntarily left the site 26 after having failed to complete the Additional Works within the contract period 27 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 28 of 39 or within the period stipulated by the Defendant’s Notice to Complete and well 1 before the Certificate of Occupancy was obtained. 2 3
In view of the fact that the parties agreed that the completion of the 4 Additional Works would cost a lump sum of CI$32,000.00, the contract can be 5 properly described as one with entire obligations rather than divisible obligations. 6 At paragraph 21-027 of the 29th Edition of Chitty on Contracts the learned 7 authors state: 8 9 “A contract is said to be “entire” when complete performance by one party 10 is a condition precedent to the liability of the other; in such a contract 11 consideration is usually a lump sum which is payable only with complete 12 performance by the other party.” 13 14
Accordingly, this Court finds the contract in this matter to be an entire 15 contract rather than a divisible contract. 16 17
The learned authors of Chitty further state at paragraph 21-029: 18 19 “In the reported cases the courts have tended to the view that in every lump 20 sum contract there is an implied term that no part of the price is to be 21 recovered without complete performance.” 22 23
When one reviews the terms of this contract, it is clear that the 24 Defendant’s obligation to pay CI$32,000.00 to the Plaintiff would only come into 25 existence after the completion date as set out in Clause 1.3 of the contract. 26 27
Furthermore, at paragraph 21-030 the learned authors of Chitty state: 28 29 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 29 of 39 “Where a party performed only part of an entire obligation he can normally 1 recover nothing, neither the agreed price, since it is not due under the terms 2 of the contract, nor any smaller sum for the value of his partial performance, 3 since the court has no power to enforce apportion the consideration. The 4 refusal of pro rata payment is based on the inability of the court, as a matter 5 of construction, to add such a provision to the contract, and also upon the 6 rule that the mere acceptance of acts of part performance under an 7 expressed contract cannot, taken alone, justify the imposition of a 8 restitutionary obligation to pay on a quantum meruit basis.” 9 10
In this case the Plaintiff has failed to complete the work she undertook to 11 do, and it is this court’s view that her claim fails. 12 13
The Court finds, on all the evidence, that the Plaintiff has failed to carry 14 out, maintain and complete the works and the Additional Works with reasonable 15 care and skill. In addition the Plaintiff also failed to put right the defects in the 16 Additional Works, due to faulty workmanship and faulty material. 17 18
On the evidence before me, the Court finds that the Plaintiff is in breach 19 of the contract to complete the project in 3-month timeframe provided for in the 20 terms of the contract. The Plaintiff failed to perform the works in accordance 21 with the Plans submitted to the Planning Authority and failed to complete all the 22 works as agreed between the parties. 23 24
Accordingly, this Court rejects the Plaintiff’s claim for the sum of 25 CI$32,000.00 and further rejects the Plaintiff’s claim for the additional 26 $4,995.00. 27 28 29 30 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 30 of 39 Defendant’s Counterclaim 1 2
The Defendant’s Counterclaim filed on the 19th October 2007 is set out at 3 paragraph 5, 6 and 7 of this Ruling. 4 5
The evidence supporting the Defendant’s Counterclaim was provided by 6 the Defendant in her witness statement dated the 4th February 2010 and by Ms. 7 Welcome in her Witness Statement dated the 7th February 2010, and in their 8 evidence before this Court given on the 19th and 20th May 2010. 9 10
In September 2009 the Defendant had to leave the Cayman Islands to 11 take up a position in the United Kingdom, and it was then that her mother, Ms. 12 Welcome, began acting as the Defendant’s agent to try and ensure that the 13 Additional Works to the premises were completed. Ms. Welcome’s evidence was 14 that apartments B, C, and D were occupied by tenants by the 1st September 2005, 15 although there were still outstanding construction issues with apartments B, C 16 and D. In addition, Ms. Welcome’s evidence demonstrated that apartment A was 17 far from complete. 18 19
Ms Welcome’s task was to stay “on the ground” to make site visits and 20 to organise payments and to liaise with the utility companies, government 21 departments and the Planning Department. 22 23
In her evidence Ms. Welcome stated that there was a lot of painting 24 which needed to be done as well as caulking, and after the caulking, more 25 painting. She said that the Plaintiff’s husband, Mr. Thomas, was still involved 26 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 31 of 39 and he helped to patch up one side of a wall. Ms. Welcome’s evidence was 1 detailed and she said that only one apartment had the base skirt boards, and that 2 apartments B, C, and D did not. 3 4
Ms. Welcome said she had asked the Plaintiff to avoid using sheetrock 5 and recalled two panels of cement board being joined. She said the Plaintiff’s 6 husband, Mr. Thomas, “patched up one side” but never did the other side. Ms. 7 Welcome said that, as a result of this, she had to call the Plaintiff on many 8 occasions. Ms. Welcome’s evidence is that the Plaintiff often promised to ensure 9 that the other jobs would be done, but, more often than not, that did not happen. 10 Ms. Welcome said that she could not get through to the Plaintiff, Dawn Smith, on 11 many occasions. She also raised these matters with the Plaintiff’s husband, 12 particularly when the plumbing was not complete and when there were no 13 faucets. Ms. Welcome said that despite reassurances from the Plaintiff and her 14 husband that they would take care of matters, things were not done. Ms. 15 Welcome said that oftentimes Dawn Smith, the Plaintiff, did not return her calls 16 for over a week, and she found the whole experience to be very unsatisfactory. 17 18
This Court finds that the Defendant was put to the following additional 19 expenses in order to complete the Additional Works. It would appear to be 20 unchallenged that the Defendant gave the Plaintiff CI$2,000.00 to enable her to 21 purchase cabinets and countertops. In addition the Defendant paid the Plaintiff 22 CI$1,500.00 to allow her to purchase electrical wire. This evidence came from 23 Ms. Welcome’s Witness Statement. 24 25 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 32 of 39
The Defendant also had to pay Gire Dominguez the sum of CI$5,636.10 1 to finalise the necessary parking for the Premises as set out in paragraph 73 2 above. 3 4
It is clear from the evidence before this Court as well as the evidence 5 provided by the documents from the Water Authority, that a new septic tank had 6 to be installed and, accordingly, despite several warnings from the Defendant, the 7 Plaintiff failed to do this. This cost the Defendant an additional CI$5,167.00 8 which this Court will allow. 9 10
In addition, the Defendant had to pay Watler & Hislop the sum of 11 CI$3,125.00 to install drain wells, as referred to in paragraph 70 above. 12 13
Ms. Welcome kept detailed accounts in relation to the miscellaneous 14 items and even kept the copies of the cheques to the various local companies, 15 which were paid for the purchase of items such as fire extinguishers, paint, cable 16 wires, toilet seats, door locks, mirrors, towel racks, garbage bins and associated 17 materials – all amounting to a total of CI$5,166.20 as set out in Ms. Welcome’s 18 Witness Statement and exhibited in the court bundle. 19 20
Accordingly, the Defendant paid out the following amounts in relation to 21 the necessary remedial work and cost of hiring alternative contractors in order to 22 complete the Additional Works: 23 24 25 26 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 33 of 39 a. Cash advances – CI$ 3,500.00 1 b. Parking – CI$ 5,636.00 2 c. Septic tank – CI$ 5,167.00 3 d. Drain wells – CI$ 3,125.00 4 e. Miscellaneous – CI$ 5,166.20 5 f. Subtotal – CI$22,594.30 6 7 Loss of Rent 8 9
The Defendant in her Counterclaim pleaded that she has suffered loss 10 and damage in incurring the costs of remedial works and or the cost of hiring 11 alternative contractors, and loss and damage generally. 12 13
Although the Defendant did not specifically plead loss of rent, she is 14 claiming for loss of rent in her general claim for loss and damage. 15 16
The Defendant submits that the Plaintiff was fully aware of the deadline 17 in relation to tenants, as an important consequence of the completion of the 18 contract, as was the fact that the Defendant would not be able to obtain financing 19 from CNB until the granting of the Certificate of Occupancy. The Defendant 20 contends that this is confirmed by the terms of the contract which specified the 21 period of three (3) months and a completion date corresponding with the grant of 22 the Certificate of Occupancy. 23 24
The lamentable litany of subcontractors failing to do their work, as well 25 as the unreliable supervision of the project, led to the inevitable conclusion that 26 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 34 of 39 the Plaintiff failed to perform what she was contracted to do. Furthermore, the 1 Plaintiff singularly failed even to complete the Additional Works within the 2 further reasonable and specified period, as set out in the Defendant’s Notice to 3 Complete, and even with the Defendant’s assistance to the Plaintiff of making 4 additional payments (as detailed in paragraph 127 above) which were already 5 provided for in the original quotation. 6 7
It is clear from the evidence of both parties that the Plaintiff knew that 8 the Defendant could only obtain financing after the Certificate of Occupancy was 9 in hand, and, in addition, the Plaintiff knew that financing to the Defendant from 10 Cayman National Bank was dependent on the fact that the Defendant had 11 represented to the Bank that she would be renting the apartments from July 2005. 12 13
The Defendant gave detailed evidence regarding her frustration and 14 inability to rent apartments A, B, C and D. On the 9th August 2005 the apartments 15 still had no cabinets, there was no water to the property and there was no 16 electricity. The Defendant had a tenant for apartment B who had paid a deposit 17 on the basis that the apartment would be completed by the 25th July 2005. The 18 Defendant’s tenant moved into apartment B some time between the 11th and the 19 15th August 2005, but the tenant had no water, no kitchen sink, no cabinets and a 20 stove that did not work, so, therefore instead of paying CI$1,500.00 for the 21 month of August, the rent was reduced to CI$450.00, resulting in a loss to the 22 Defendant of CI$1,050.00. 23 24
The tenant for apartment C was also to move in by the 1st August 2005. 25 Again, for the reasons set out above, this tenant was not able to move in until the 26 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 35 of 39 1st September 2005. Therefore the Defendant lost one month’s rent, being 1 CI$1,650.00. 2 3
Apartment D suffered from the same problems but the tenant was 4 prepared to occupy the apartment and the Defendant reduced the rent from 5 CI$950.00 to CI$650.00. Therefore the Defendant only lost CI$300.00 on 6 apartment D. 7 8
Accordingly, the Defendant lost CI$3,000.00 on apartments B, C and D. 9 10
Although the issues in relation to apartments B, C and D were eventually 11 finalised by the end of 2005, the problems with apartment A continued and 12 therefore this apartment was not rented until the 1st November 2006. 13 Accordingly, the Defendant lost 15 months of rent on apartment A, making the 14 total loss on this apartment CI$16,500.00. 15 16
Accordingly, the Defendant lost rent of CI$19,500.00 on all four 17 apartments as set out in paragraph 72 of her Witness Statement. 18 19
The evidence of this loss of rent was clearly set out by the Defendant in 20 her Witness Statement dated the 4th February 2010 and was not challenged by the 21 Plaintiff either by direct evidence or in cross examination of the Defendant. As I 22 said before, I find both parties to be honest and I have no reason to disbelieve the 23 Defendant on this issue. 24 25 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 36 of 39
In considering the question of damages and their quantum in relation to 1 the Defendant’s Counterclaim, I note that the Defendant’s counsel reiterates that 2 the starting point, is as enunciated by the learned authors of McGregor on 3 Damages, 18th Edition at paragraph 6-155, where they stated: 4 5 “The starting point in resolving a problem as to the measure of damages for 6 breach of contract is the rule that the claimant is entitled to be placed so far 7 as money can do it, in the same position as he would have been in had the 8 contract been performed.” 9 10
Counsel for the Defendant also relies on dicta in Hadley v. Baxendale 11 1854 9 Exch 341 and at paragraph 6-157 of McGregor which stated: 12 13 “Where two parties have made a contract which one of them has broken, the 14 damages which the other party ought to receive in respect of such a breach 15 of contract should be such as may have fairly and reasonably be considered 16 either arising naturally, i.e. according to the usual course of things, from 17 such a breach of contract itself, or such as may reasonably be supposed to 18 have been in the contemplation of both parties, at the time they made the 19 contract, as the probable result of the breach of it.” 20 21 22
The Hadley v. Baxendale rule was re-stated in the judgment of Asquith 23 L.J. in Victoria Laundry v. Newman [1949] 2KB 528, from which the learned 24 authors of McGregor on Damages saw fit to re-state the six propositions: 25 26 “(1) It is well settled that the governing purpose of damages is to put 27 the party whose rights have been violated in the same position, 28 so far as money can do so, as if his rights had been observed. 29 This purpose, if relentlessly pursued, would provide him with a 30 complete indemnity for all loss de facto resulting from a 31 particular breach, however improbable, however unpredictable. 32 This, in contract at least, is recognized as too harsh a rule. 33 Hence, 34 (2) In cases of breach of contract the aggrieved party is only entitled 35 to recover such part of the loss actually resulting as was at the 36 time of the contract reasonably foreseeable as liable to result 37 from the breach. 38 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 37 of 39 (3) What was at that time reasonably so foreseeable depends on the 1 knowledge then possessed by the parties, or, at all events, by the 2 party who later commits the breach. 3 (4) For this purpose, knowledge ‘possessed’ is of two kinds; one 4 imputed, the other actual. Everyone, as a reasonable person, is 5 taken to know the ‘ordinary course of things’ and consequently 6 what loss is liable to result from a breach of contract in that 7 ordinary course. This is the subject matter of the ‘first rule’ in 8 Hadley v. Baxendale. But to this knowledge, which a contract- 9 breaker is assumed to possess whether he actually possesses it or 10 not, there may have to be added in a particular case knowledge 11 which he actually possesses, of special circumstances outside the 12 ‘ordinary course of things,’ of such a kind that a breach in those 13 special circumstances would be liable to cause more loss. Such a 14 case attracts the operation of the ‘second rule’ so as to make 15 additional loss recoverable. 16 (5) In order to make the contract-breaker liable under either rule it 17 is not necessary that he should actually have asked himself what 18 loss is liable to result from a breach. As has often been pointed 19 out, parties at the time of contracting contemplate not the breach 20 of the contract, but its performance. It suffices that, if he had 21 considered the question, he would as a reasonable man have 22 concluded that the loss in question was liable to result. 23 (6) Nor, finally, to make a particular loss recoverable, need it be 24 proved that upon a given state of knowledge the defendant could, 25 as a reasonable man, foresee that a breach must necessarily 26 result in that loss. It is enough…if he could foresee it was likely 27 so to result. It is indeed enough if the loss (or some factor 28 without which it would not have occurred) is a ‘serious 29 possibility’ or a ‘real danger.’ For short, we have used the word 30 ‘liable’ to result. Possibly the colloquialism ‘on the cards’ 31 indicates the shade of meaning with some approach to 32 accuracy.” 33 34
It is correct that Asquith L.J.’s judgment in Victoria Laundry v. 35 Newman was criticised by Lord Reid in the House of Lords decision of 36 Czarnikow v. Koufos [1969] 1 A.C. 350, but as the learned authors of McGregor 37 state as paragraph 6-152: 38 39 “Yet it is fair to say that taken as a whole, Asquith L.J.’s careful restatement 40 in Victoria Laundry v. Newman has survived the various strictures 41 appearing in their Lordships’ speeches. For Lord Morris, Asquith L.J.’s 42 “illuminating judgment” was “a most valuable analysis” of the Hadley v. 43 Baxendale rule. For Lord Pearce, it was “a justifiable and valuable 44 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 38 of 39 clarification of the principles which Hadley v. Baxendale was intending to 1 express.” 2 3
Furthermore, Donaldson J. in Aruna Mills v. Dhanrajmal Gobindram 4
1 Q.B. 655 stated that Victoria Laundry v. Newman “remained 5 unimpaired as the classic authority on the topic of remoteness in contract. As 6 McGregor states at paragraph 6-163: 7 8 “…no doubts were cast upon Asquith L.J.’s second criteria that liability 9 depends upon actual or imputed knowledge, and even the objection to his 10 first criterion of reasonable foreseeability was really that it was liable to be 11 misunderstood rather than that it was necessarily wrong.” 12 13
It is my view that the Plaintiff was aware of the nature of the work she 14 was to perform and was clearly aware of the fact that the Defendant intended 15 letting the apartments on a commercial basis. The completion date in the contract 16 itself was tied to the Certificate of Occupancy so that the site would be ready to 17 be handed back to the Defendant ready for use. Indeed the Defendant told the 18 Plaintiff by email on the 20th May 2005: 19 20 “I’m just letting you know that I cannot afford any delay past the end of June. 21 The contract ends on June 24th and the Bank has already required me to start 22 repaying the principal, which puts my finances in the bright red area. So 23 please put first priority on this project and a full crew on the site as much as 24 possible to ensure completion by June 24th.” 25 26 27
Furthermore, on the 10th August 2005, the Defendant informed the 28 Plaintiff by email: 29 30 “Both tenants have confirmed they cannot wait any longer and must move in, 31 i.e. be living in the unit by w/e. I will need to collect all keys off you once 32 cabinets are installed and laundry machines installed.” 33 Ruling. Cause No. 425/2007. Dawn Smith T/A SUMMIT v Tricia McDoom. Coram Quin J. Date: 27.9.2010 Page 39 of 39
Accordingly, I accept the Defendant’s contention that the claim for loss 1 of rent in this case is a claim for a loss naturally arising from the breaches of the 2 Plaintiff which have already been enumerated in the foregoing paragraphs, and 3 the damages arising are natural and are according to the usual course of things 4 and would have reasonably been in the contemplation of both parties. 5 6
Accordingly I find that the Defendant has made out her Counterclaim, 7 and therefore award the Defendant the sum of CI$42,094.30 for loss and 8 damages sustained by the Defendant by reason of the breach of the contract by 9 the Plaintiff. 10 11
As costs follow the event I also order that the Plaintiff pays the 12 Defendant’s costs, to be taxed if not agreed, and interest thereon. 13 14 15 16 Dated this the 27th September 2010 17 18 19 20 Quin J. 21 Judge of the Grand Court 22