Jada Construction Caribbean Ltd Applicant v The Landing Ltd Respondent [ECSC]

• Jurisdiction: St Lucia
• Judge: EDWARDS, J.
• Judgment Date: 16 October 2006
• Judgment citation (vLex): [2006] ECSC J1016-2
• Court: High Court (Saint Lucia)
• Date: 16 October 2006
• Docket Number: CLAIM NO. SLUHCV2006/0771

[2006] ECSC J1016-2

IN THE EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

CLAIM NO. SLUHCV2006/0771

Between:

Jada Construction Caribbean Ltd

Applicant

and

The Landing Ltd

Respondent

Appearances :

Mr. Peter Foster with Ms. R. St Rose for Applicant

Ms. N. Glitzenhirn Augustin for Respondent

INTRODUCTION

EDWARDS, J.

1 This is a judgment for 2 Applications; one made by the Landing Limited for the discharge, and the other made by JADA Construction Caribbean Ltd for the continuation of an interim injunction granted by this Court on 29^th September 2006. The Judgment is arranged in sections captioned as follows:-

Background Facts — paragraphs 2 to 5; The Agreement — paragraphs 6 to 16; the Documentary and Other Evidence — paragraphs 17 to 33; The Applications — paragraphs 34 to 37; The Law and Submissions of Counsel — paragraphs 38 to 49; The Injunctive Relief — paragraphs 50 to 67; The Arbitration and Termination Clauses — paragraphs 68 to 72; The Arbitration Act — paragraphs 73 to 77; Arbitration Before Repudiation — paragraphs 78 to 80; Conclusions —paragraphs 81 to 85.

BACKGROUND FACTS

2 JADA Construction Caribbean Ltd (JADA) is a company incorporated under the Laws of Barbados with its registered office at Spring Hall, St. Lucy, Barbados.

3 The Landing Ltd (L.L.) is a Company incorporated under the Laws of St. Lucia, with registered office at 20 Micoud Street, Castries.

4 L.L. owns 19.09 acres of land at Pigeon Island Causeway, Gros Islet on which it is presently creating a resort comprising 228 residential units in 24 residential buildings, 2 service buildings, 1 security building, roadways, swimming pools, a harbour and docks with other facilities.

5 JADA is in the business of building construction, project management and property development, and provides services as contractors, civil engineers, project managers and developers for major developments in Barbados. JADA is also engaged in developments in St. Lucia; Puerto Rico, Antigua, Bahamas and St. Croix.

THE AGREEMENT

6 On 13^th January 2006 the parties entered into a Construction Management Contract. By this agreement JADA is required to manage the construction of the residential and Pavillion components of Phase I of the Resort development. The target substantial/practical completion dates for the Phase I buildings are listed in the Appendix B to the Contract as follows:

Building B2 -	September 1st, 2006
Building B1 -	October 30th, 2006
Building L8 -	August 16th, 2006
Building H1a -	August 28th, 2006
Building H1b -	September 22nd, 2006
Building H8 -	March 15th, 2007
Building P1 -	March 15th, 2007

The construction management period is stated to be 20 months in JADA's confirmation letter, Appendix A to the Contract.

7 Article 2.3.3. of the Contract provides:

"The Construction Manager shall provide administrative, management and related services to co-ordinate scheduled activities and responsibilities of the various Contractors, Sub Trades and Suppliers with each other and with those of the Construction Manager, the Owner and the Architect/Project Manager to endeavour to manage the Project in accordance with the latest approved estimate of Construction Costs, the agreed Project Schedule and the Construction Documents. The Construction Manager will provide all site supervisory staff required to ensure that all work performed is in strict compliance with the quality and standards set out in the contract documents. In the event the local trades and practices require amendments to the contract documents the amendments will be reviewed and approved by the Owner prior to any changes being made in the documents. The quantity of site supervisory staff is detailed in the JADA proposal letter attached hereto as Appendix A."

8 The JADA proposal letter detailed as Appendix A to the Contract lists the quantity of site supervisory staff as follows —".. 2. Management team — project manager (1 No.), project engineers (4 No.), building foremen (7 No.), finishing foreman (2 No.) and site check (1 No.).

9 Article 2.3.4. of the Contract provides that: "The Construction Manager shall attend weekly site progress meetings. The Owner's Project Manager team will take minutes at these meetings and prepare and distribute the meeting minutes within 48 hours of the meeting taking place. All parties agree that additional site meetings and or coordination meetings may be required on an ongoing basis and the Construction Manager undertakes to ensure that the Construction Management team will be available to attend such meetings as required."

10 Article 2.3.21 of the Contract states that:

"The Construction Manager shall record the progress of the Project. The Construction Manager shall keep a daily log containing a record of weather, each Contractor's work on the site, number of workers, identification of equipment, work accomplished, problems encountered, and other similar relevant data as the owner may require."

11 Article 2.3.25 states that: "When the Construction Manager considers each Contractor's Work or a designated portion thereof substantially complete, the Construction Manager shall, jointly with the Contractor, prepare for the Architect a list of incomplete or unsatisfactory items and a schedule for their completion. The Construction Manager shall assist the Architect/ProjectManager in conducting inspections to determine whether the work or designated portion thereof is substantially complete."

12 Article 2.3.26 provides that:

"The Construction Manager shall co-ordinate the correction and completion of the work. Following issuance of a Certificate of Substantial Completion of the work or a designated portion thereof, the Construction Manager shall evaluate the completion of the work of the Contractors and make recommendation to the Architect/Project Manager when work is ready for final inspection. The Construction Manager shall assist the Architect/Project Manager in conducting final inspections."

13 Article 4.10 requires:"Prompt written notice shall be given by the Owner to the Construction Manager and Architect/Project Manager if the Owner becomes aware of any fault or defect in the Project or non conformance with the Contract Documents."

14 By Article 8.1, the parties have agreed that:"Claims, disputes or other matters in question between the parties to this Agreement arising out of or relating to this Agreement or breach thereof shall be subject to and decided by arbitration in accordance with the arbitration Act of Saint Lucia currently in effect unless the parties mutually agree otherwise."

15 Article 8.2 states how Arbitration proceedings should commence:

"Demand for arbitration shall be filed in writing with the other party in accordance with the Arbitration Act of Saint Lucia. A demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter in question has arisen …"

16 Article 9.1 stipulates that"This Agreement may be terminated by either party upon not less than seven days written notice should the other party fail substantially to perform in accordance with the terms of the Agreement through no fault of the party initiating the termination."

THE DOCUMENTARY AND OTHER EVIDENCE

17 It appears from the Affidavit and documentary exhibits for the 2 Applications that up to 10^th May 2006, Mr. Mark Benoit, the Vice President-Design and Development for L.L., had led Mr. Bjorn Bjerkhamn the Director and Chairman of JADA, to believe that he was satisfied that the work on the site was progressing well despite some challenges from Presconco.

18 The site meetings minutes disclose that L.L.'s Owners had raised the issue of the quantity of JADA's on site staff at the meeting held on 30^th June 2006. This issue was apparently never satisfactorily addressed by JADA as far as L.L. was concerned. Consequently it was an ongoing concern for L.L. for several subsequent meetings held on 7/7/06, 14/07/06, 21/07/06, 28/7/06, 4/8/ 06 and 11/8/06.

19 From 7/7/06 the Minutes noted the L.L. Owner's perception that they were incurring costs due to the lack of on site co-ordination. Then on 28^th July, 2006, it was also noted that Interborough Electric was concerned about co-ordination of the drywall framing contractor's works. L.L.'s Vice President Mr. Benoit, therefore asked JADA to amend their schedule and supervision of this trade accordingly.

20 Despite these concerns, at a meeting where JADA's Mr. Bjerkhamn, Mr. Philip Tempro JADA's Managing Director, and Mr. Benoit were present, Mr. Benoit had apparently discussed negotiating the Phase 2 contract with JADA. According to Mr. Benoit, L.L.'s Owners were then"cautiously optimistic that thereorganization of JADA's on site team to be augumented by newly appointed staff, might have helped to resolve the issues."

21 It would seem that the reorganization of JADA's on site team was ineffective. At the site meeting held on 24/08/06 the previously mentioned concerns were again mentioned as not having been addressed by JADA. There was also a complaint at the meeting held on 1/9/06 about some schedule that the team workers of JADA had prepared at the request of L.L.'s owners, which were noted in the Minutes of the Site Meeting 1/9/06 as wholly inadequate.

22 On 24^th August 2006, Mr. Benoit sent Mr. Bjerkhamn an E-mail, requesting a meeting at the Hilton Barbados at 9:00 a.m. on 6^th September, 2006 "to review in an amicable and cordial manner the challenges we are having with JADA as the construction manager for the Landings."

23 The E-mail continued —

"Once we review the issues we would like to then discuss the options available including negotiating several aspects of our existing agreement to the satisfaction of both parties.

As per discussion this morning you requested that I provide you with a summary of our major concerns. To this end...