Rainbow's End Ltd v George Turnbull Appellant
| Jurisdiction | British Virgin Islands |
| Judge | REDHEAD J.A |
| Judgment Date | 12 March 2001 |
| Neutral Citation | VG 2001 CA 1 |
| Judgment citation (vLex) | [2001] ECSC J0312-1 |
| Court | Court of Appeal (British Virgin Islands) |
| Date | 12 March 2001 |
| Docket Number | CIVIL APPEAL No. 9 of 2000 |
IN THE COURT OF APPEAL
Sir Dennis Byron Chief Justice
The Hon. Mr. Albert Redhead Justice of Appeal
The Hon. Mr. Albert Matthew Justice of Appeal
CIVIL APPEAL No. 9 of 2000
Mr. G. Farara Q.C for the Appellant, Miss T. Small with him
Mr. J. Archibald Q.C. for the Respondent, Miss M. Matthew with him
The respondent, Mr. George Turnbull, for seven [7] years, from 1975 to 1982, he was a building superintendent, in St. Thomas and for 18 years, from 1982 to present, he has been a building contractor in the British Virgin Islands {BVI}.
The learned trial judge referred to him as a good builder. On 25 th June, 1990 the appellant and the respondent entered into a written contract whereby the respondent undertook to construct a dwelling house for the appellant.
Article 2 of the contract provides that the work should have begun on 26 th June, 1990 and "be substantially completed on or before 31 st December, 1990"
By Article 4 of the contract the appellant was to make periodic payments to the respondent against certificates of appellant's architects, Messrs. Onions Bouchard and Mc.Culloch.
Article 4 also provides:
"When the architect determines that the work under the contract is substantially completed as defined in Article 64 of Supplementary General Conditions he shall promptly issue a certificate of substantial completion…………….."
Article 5 of the contract provides inter alia:
"Final payment shall be due within ninety {90} days after substantial completion of the work provided that the work is fully performed……………."
The learned trial judge found as a fact that work progressed smoothly and to the satisfaction of the architects appointed by Mr. Ruffel Smith.
The evidence reveals that Mr. Ruffel Smith and his family moved into the house in December 1990.
Mr. Archibald, Learned Queen's Counsel, argued on behalf of the respondent that Article 64 does not exist. He referred to Article 57:-
"Substantial completion - The date of substantial completion of a project or specified area of a project is the date when the construction is sufficiently completed, in accordance with the contract documents, as modified by any variation orders agreed to by the parties, so that the owner can occupy the project or specified area of the project for the use for which it is intended."
Mr. Archibald, Learned Queen's Counsel, argued that substantial completion would have taken place in December, 1990.
Learned Queen's Counsel, Mr. Farara argued on the contrary that this was not so because when Mr. Ruffel Smith moved into the house he was living in, as Mr. Farara termed it, "a construction site" as work was going on all around him.
After the respondent completed the job and moved off the work site the appellant was dissatisfied with the work.
On 5 th November, 1991 the appellant's Architects wrote to the appellant
" Attention Mr. Hugh-Ruffle Smith
Dear Mr. H. Ruffle Smith
It is some 10 months after the original contract completion date and many months since George Turnbull vacated the site.
We are led to believe that the property is completed and valued accordingly.
Substantial completion has never been issued as you are aware.
We therefore propose a final "statement" in accordance with our understanding of the situation.
Please acknowledge/confirm that our assumptions are in accordance with records.
Yours sincerely
David Brindley B Sc B. ARCH; Onions Bouchard and Mc.Cullcoch Ltd"
Attached to that letter was a document marked "certificate 14B".
That document listed itemized deductions from contract sum such as, minor defects relating to electrical work; Housing for pump room and gas cylinder; filing re-work, materials and labour… in accordance with H.R.S. memoranda dated 8 th May, 1991 and 31 st May, 1991. There was a total deduction of $4,721.93.
That document also represented that the balance outstanding and owing to be paid to the respondent on the contract price was $25,121.93.
The appellant refused to pay that sum.
The respondent issued a writ against the appellant on 1 st June 1995 claiming the said amount.
The appellant filed a defence and counterclaim on 20 th June 1995 initially claiming $52,725.73 as the cost for remedying defective work which it alleged was done by the respondent.
By an order of court dated 16 th September 1998, the appellant was given leave to amend its defence and counterclaim.
In that amended defence and counterclaim the appellant was now claiming $179,052.15 as the cost of remedying defective work.
The matter came before Moore J. who gave judgment for the respondent in the amount claimed and dismissed the appellant's counterclaim.
The appellant now appeals against the decision of the learned trial judge.
A multiplicity of grounds of appeal were filed on behalf of the appellant but, in my view, for a determination of this appeal it is not necessary to consider all of these grounds,
The learned trial judge in giving judgment for the respondent said at paragraph 5 of his judgment:-
"Attached to the letter of the 5 th November 1991 was certificate #14B which showed a net balance of US$25,121.93 which is the sum claimed by the plaintiff. On all the evidence before me in this case both oral and documentary, I am satisfied that certificate #14B is the final certificate as contemplated by the parties under the contract; and that therefore that sum, admittedly not having been paid by the defendant, the plaintiff is entitled to judgment upon his claim."
A great deal of time and emphasis were spent on this aspect of the case by learned Queen's Counsel for the appellant.
Mr. Farara, Learned Queen's counsel, drew attention to Article 5 of the contract which provides inter alia:-
"The Architects upon receipt of the written notice that the work is ready for final inspection, and acceptance, and where they find the work acceptable under the contract fully performed, they shall promptly issue a final certificate over their own signature stating that the work provided for in the contract has been completed and is accepted by them under the terms and conditions thereof and that the entire balance found to be due, the contractor and noted in the said final certificate is due and payable……."
Learned Queen's Counsel, Mr. Farara argued that the document is not even described by the Architect as a final certificate but rather a proposed "final statement".
It does not conform to the format of previous certificate issued by the Architects. It does not certify anything. All previous certificates were worded " This is to certify that the sum of $x is now due to George Turnbull as a progress payment for work on Rainbows End house"
For these reasons, learned Queen's Counsel contended that it is difficult to glean what material the learned trial judge relied on to make such a concise finding of fact that the document is the final certificate contemplated by the parties under the contract.
Mr. Archibald, learned Queen's Counsel, on the other hand, argued that the building contract agreement does not provide for the form of a certificate to be in any specific form whether the certificate 14B in issue constitutes a certificate for the purpose of the contract is a question of judicial construction.
He further argued that the certificate was made by the appellant's appointed architects whose professional duty in this respect was to act impartially and independently; and in doing so they meticulously followed the appellant's specific instructions to deduct amounts claimed by the appellant against the builder for defects out of moneys due.
In Halsburys Laws of England 4 th Edition Volume 4(2) paragraph 425.
"Form of Certificate - Generally each contract will provide for the form of certificates required under it but, subject to an express provision to the contrary, a certificate need not be in writing, whether the document or statement relied on constitutes a certificate for the purposes of the contract is a question of construction.
If the contract requires only that the architect should certify his satisfaction with the works, it is not necessary that the certificate should state a balance due and, if an amount is stated, neither party is bound by it. Similarly a statement by the certifier approving the contractor's account may be taken as an expression of satisfaction."
Mr. Archibald argued that a reading of Article 1, Article 4 and Article 57 of the General Conditions of the of the Contract, coupled with the admission by Ruffel Smith that he has not seen supplementary General Conditions or Article 64 would lead to the inevitable conclusion that substantial completion occurred in December 1990 as a question of fact.
However, the respondent did say in answer to a question from the court that substantial completion was effected in May, 1991.
In my view for the purpose of this case it matters not whether substantial completion was effected in December 1990 or May 1991 as the document marked "certificate" which was issued under the cover of a letter by the appellant's architect was issued well beyond ninety days after May 1991 as contemplated by Article 5 of the contract.
"Final payment shall be due within ninety days after substantial completion of the work……"
It was not until November 5, 1991 that the architects issued that document headed "certificate" which the appellant disputes that it is a final certificate which document made itemized deductions for minor defects etc.
It is significant, in my view that the deductions made by the Architects on 5 th November 1991 were $4,721.93.
On 13 th January, 1991 Ruffel Smith wrote to the Architects saying inter alia:-
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