Electrotec Services Ltd v Issa Nicholas (Grenada) Ltd
| Jurisdiction | UK Non-devolved |
| Judge | Lord Browne-Wilkinson |
| Judgment Date | 16 February 1998 |
| Court | Privy Council |
| Docket Number | PCA No. 37 of 1997 |
| Date | 16 February 1998 |
Privy Council
Lord Browne-Wilkinson,
Lord Lloyd of Berwick,
Lord Nolan,
Lord Hoffmann
Mr. Justice Gault
PCA No. 37 of 1997
Contract - Claim for work done — Plaintiff claimed against defendant the sum of $325,921.00 for work done — No dispute that work was done by plaintiffs — Whether the work comprised in contract 3 and were ever the subject of any contract between the parties — Court found no evidence of such a contract — Court held that the Court of Appeal was not justified in upsetting the factual findings of the learned judge which were consistent with the evidence before him — Appeal allowed.
Delivered byIn this action the plaintiff, Electrotec Services Limited (“Electrotec”) claims against the defendant, Issa Nicholas (Grenada) Limited (“Nicholas Limited”), the sum of EC$325,921.00 plus interest at 6% for work done by Electrotec in 1985 and 1986 at the Ramada Renaissance Hotel of which Nicholas Limited is the owner. There is no dispute that the work was done by Electrotec Limited. The question is whether Nicholas Limited, as building owner, is liable under a direct contract with Electrotec that Electrotec should do the work or whether the work was done by Electrotec, as a sub-contractor of Project Control Associates (“PCA”) under a main contract made between Nicholas Limited and PCA.
The detailed history of the matter is extremely confused. In outline it is as follows: On 7th August 1985 Nicholas Limited entered into a written contract with PCA as main contractor for the renovation of certain rooms at the hotel (“contract 1”). This contract was subsequently extended to cover further works at the hotel (“contract 2”). The written contract between Nicholas Limited and PCA incorporated common form general conditions which provided for nominated sub-contractors whom Nicholas Limited, as employer, could in certain circumstances pay direct. There is no doubt that in relation to the works covered by contracts 1 and 2 Electrotec carried out works as sub-contractor under contracts with PCA as main contractor.
Late in 1985, Electrotec undertook further works on the site. These further works are referred to in the documentation as contracts 3 and 4. There is no formal written document relating to these later contracts. Some of the work under contracts 3 and 4 consisted of additions and alterations to works done under contracts 1 and 2: the rest was new work. It appears that some of the work under contracts 3 and 4 had been done before 5th November 1985.
On 5th November 1985 a meeting took place between Mr. Gay, of Electrotec, and Mr. Nicholas, the moving light behind Nicholas Limited. According to Mr. Gay's evidence, at that meeting he was instructed directly by Mr. Nicholas to do the work comprised in contract 3. In a letter of 6th November 1985 from Mr. Gay to Mr. Hosein of PCA the work comprised in contract 3 is referred to as being the subject matter of quotations given directly by Electrotec to Mr. Nicholas. A copy of that letter was sent to Mr. Nicholas. Mr. Gay's evidence was that he was later instructed directly by Mr. Nicholas to do the work comprised in contract 4. In a letter dated 2nd December 1985 from Mr. Hosein of PCA to Mr. Nicholas, Mr. Hosein refers to a valuation of the contract work and states, inter alia, that the figures include contract 4 and “incorporate the contracts agreed to by you with Electrotec for the Sewer Treatment Plant and for the External Drainage works.” According to Mr. Gay's evidence, Mr. Nicholas promised to pay Electrotec directly for the work comprised in contracts 3 and 4. This is to an extent confirmed by a letter dated 4th December 1985 from Mr. Gay to PCA in which amounts totalling over $157,000 are described as “amounts promised to be paid by I.N. Limited.”
The work comprised in contracts 3 and 4 were carried out by Electrotec. On 14th November 1985 Electrotec put in a request for payment to PCA on a form which described PCA as “main contractor” and the request for payment covered, in addition to work included in contracts 1 and 2 works included in contracts 3 and 4. In the period from 30th November 1985 to 22nd May 1986, Electrotec continued to apply to PCA for payment for the works included in contracts 3 and 4 but, apparently, without success. Having failed to extract the money from PCA, Mr. Gay sought payment direct from Mr. Nicholas. There was a meeting between Mr. Gay and Mr. Nicholas in June 1986 at which Mr. Gay sought direct payment. Mr. Nicholas requested that Electrotec should separate the work done by Electrotec into two categories viz., first, the category for which Mr. Nicholas was primarily liable to PCA as the main contractor in relation to which Electrotec's claim was against PCA; second, the work for which Nicholas Limited was directly liable to Electrotec. According to Mr. Gay, Mr. Nicholas again promised to pay Electrotec the amount due under the second category.
On 18th June 1986 Mr. Gay wrote to PCA (with a copy to Mr. Nicholas). It reads as follows:–
“As per Mr. I. Nicholas request, we have separated the items of work which were directly requested by him from that for which you are responsible.”
The letter then specified a sum of $82,842 odd as being the sum due from PCA. On the following day, 19th June 1986, Mr. Gay wrote to Mr. Nicholas (with a copy to PCA). The letter reads as follows:–
“Further to our discussions, we have detailed the works requested by you on the attached sheets.
Details of the account are as follows:–
Contract 3 — External works
….
$312,612.00
Contract 4 — Additional works
….
54,459.00
Amount outstanding
….
$367,071.00
We look forward to your payment as promised, as these moneys are now outstanding for over four (4) months and is causing us some serious embarrassment with our Bankers and Suppliers.”
Enclosed with the letter were two schedules setting out the detailed items: these schedules referred to PCA as being the “main contractor.”
There was a further meeting between Mr. Gay and Mr. Nicholas on 11th July 1986. According to Mr. Gay's evidence, he and Mr. Nicholas then agreed that certain items in the schedules sent on 19th June were due but Mr. Nicholas queried certain other items. Mr. Nicholas said that he would pay the amounts which PCA certified as due. Mr. Gay's account of that...
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