the republic of trinidad and...

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THE REPUBLIC OF TRINIDAD AND TOBAGO

IN THE HIGH COURT OF JUSTICE

CV No. 2011-04593

Between

TRINSALVAGE ENTERPRISES LTD. Claimant

And

THE ATTORNEY GENERAL OF TRINIDAD AND TOBAGO Defendant

Before the Honourable Mr. Justice Frank Seepersad

Appearances:

Mr. Anand R. Singh instructed by Ms. Mandavi Tiwarie for the Claimant

Ms. Tamara Toolsie instructed by Ms. Michelle Benjamin for the Defendant

Delivered 7th

January, 2014

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DECISION

In this matter the Claimant has claimed against the Attorney General the following reliefs:

a. Loss and damages for breach of contract;

b. The sum of $4,997,021,47 plus VAT representing monies due under the contract;

c. Alternatively, the sum of $4,997,021,47 representing the reasonable value of works and

materials supplied by the claimant to the Defendant for and at its request for which it has

not received any remuneration.

Procedural History

The matter was converted from the Rules of the Supreme Court 1975 to the Civil Proceedings

Rules 1998 (as amended) and the matter was actively managed before a Master. By a Consent

Application filed 21/1/13 the parties agreed as follows:

“(i) That the issue of liability is one of law only and is as follows “whether the Permanent

Secretary in the Ministry of Works and or Lee Young and Partners had the authority and or the

apparent authority and or the ostensible authority to enter into the alleged contract on behalf of

the Defendant and whether any lack of such respective authority would deprive the Claimant of

its claim either on the contract or under its claim for a quantum meruit”, and the parties also

agree that the same be determined as a preliminary issue before a Judge.

(ii) That in relation to the issue of quantum the parties have agreed to appoint a Joint

Independent Expert to determine or ascertain the value of the works in ascertaining the quantum

if necessary and that parties agree to be bound by the valuation of the Joint Independent Expert”.

Directions were given by the Master and the parties filed, inter-alia, statements of agreed issues

and facts in April 2013 the matter was sent to the Registrar to be docketed before a Judge for a

PTR.

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The matter was docketed before this Court on the 2nd

May 2013. By Notice of Application filed

7th

June 2013, the Defendant asked the Court for an Order striking out the Claimant’s Statement

of Case, thereby dismissing the Claimant’s action.

The said application was premised inter-alia on the Defendant’s contention that the claimant

failed to comply with Part (5) 8 and part 26 2 (1) of the CPR as amended.

The matter was heard before this Court on the 10th

June 2013 and directions were given for the

filing of detailed submissions. The parties sought to vary the Court’s time table on two

occasions and their requests were granted.

The central issue to be determined, having regard to the parties consent position by virtue of the

application filed 21/1/13 as well as the Defendant’s application filed 7/6/13 is whether the

Claimant can properly maintain this claim against the Defendant, the claim being a debt

allegedly owed under a contract entered into by the Claimant and the Permanent Secretary in the

Ministry of Works or alternatively a claim for quantum meruit.

In determining this main issue the Court also has to consider:

1. Whether the Permanent Secretary in the ministry of Works or Lee Young and Partners

has the authority whether apparent or ostensible to enter into the contract with the

Claimant.

2. Whether the contract made between the Permanent Secretary in the Ministry of Works or

Lee Young and Partners wall illegal and therefore not subject to suit.

3. Whether a claim for unjust enrichment has been made out.

The Defendant contends that no cause of action was made out on the pleadings and referred the

Court to paragraphs 4 and 6 of the Claimant’s Amended Statement of Claim and submitted that a

Ministry is not a ‘person of law’ and cannot enter a contract. The Defendant further submitted

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that the Permanent Secretary could not have been the Defendant’s agent having regard to the

nature and quantum of the contract in the instant case. In addition the Defendant advanced that

the Claimant’s pleaded case did not directly establish nor can it be implied that the Permanent

secretary was at the material time the agent of the Defendant and it was suggested that there are

two requirements for a contract to be valid if made by a Government representing the state,

namely:

1. That the contract must be within the power of the Government;

2. The contract must have been made by Servants and/or Agents of the Government acting

within the scope of their authority.

The Defendant stated that the local courts have adopted the Canadian position on government

contracts at common law, in Frank Solomon, Christopher Hamel-Smith, Michael Quamina and

J.D. Sellier and Co (A Firm) v. The Attorney General of Trinidad and Tobago HC 3461 of 2004,

a judgment of the Honourable Madam Justice Carol Gobin where in relation to the power of

Ministers to enter into contracts, the learned judge stated at paragraph 11 on page 7:

‘In the light of the above it is not necessary to set out my conclusion as to the

applicability of the cases cited by the plaintiffs’ attorney except to say that I accept the

following proposition which appears in the judgment of Pratte J in the case of R-v-CAE

Industries Ltd. –v- Canada 20 DLR (4th

) 347 and CAE Industries Ltd. –V-Canada 61

N.R.19:20 DLR that:

“in the absence of statutory provisions to the contrary, a minister, in order to

have authority to enter into a contract on behalf of the Crown, need not be

expressly authorized by statute or order in council provided that the contract in

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question be directly related to that part of government business that is assigned to

his department”.

Reference was also made to the case of the Attorney General for Ceylon v. AD Silva (1953) AC

461 at pages 476 and 480 where the Court said:

“It is a simple and clear proposition of law that a public officer has not by reason of the

fact that he is in the service of the Crown the right to act for and on behalf of the Crown

in all matters which concern the Crown. The right to act for the Crown in any particular

matter must be established by Statute or otherwise…Next comes the question of whether

the Principal Collector had ostensible authority, such as would bind the Crown, to enter

the contract sued on. All “ostensible” authority involves a representation by the

principal as to the extent of the agent’s authority. No representation by the agent as to

the extent of his authority can amount to a “holding out” by the principal. No public

officer, unless he possesses some special power, can hold out on behalf of the Crown that

he or some other public officer has the right to enter into a contract in respect of the

property of the Crown when in fact no such right exists.’

‘Their Lordships think that the Principal Collector cannot be regarded as having any

such authority, He had no doubt, authority to do acts of a particular class, namely to

enter on behalf of the Crown into sales of certain goods. But that authority was limited

because it arose under certain sections of the Ordinance and only when those sections

were applicable.’

The court adopted the dicta of Lord Atkinson in Russo-Chinese Bank v. Li Yau Sam (1910) AC

174 and further stated:

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‘If the agent be held out as having only limited authority to do on behalf of the principal

acts of a particular class, then the principal is not bound by an act done outside that

authority, even though it be an act of that particular class, because the authority being

thus represented to be limited, the party prejudiced has notice, and should ascertain

whether or not the act is authorized…In as statute the limits of the authority conferred

are fixed rigidly and no recourse to evidence is necessary to ascertain them.’

Reference was also made to the provisions of the Central Tenders Board Act Ch. 71:91 and it

was submitted that pursuant to the provisions of the said Act and in the circumstances of this

case, the Permanent Secretary had no authority to enter into the alleged contract and that the

Board under the Act was the entity empowered to transact on behalf of the state.

In relation to the claim for quantum meruit the Defendant claimed that the quantum meruit can

be equated with unjust enrichment and that the Claimant’s pleading does not make out a case for

this type of relief nor is it permissible to allow such a claim as to do so would undermine and in

effect repeal the powers of the Central Tenders Board Act.

The Defendant further contended that the Claimant was in law required to plead (i) that the

Defendant has been enriched (ii) that the enrichment was at the Claimant’s expense and (iii) that

there was an unjust factor.

The Defendant directed the Court’s attention to the obiter dicta of Mann J in Uren v. First

National Home Finance Limited (2005) EWHC 2529 (Ch) (paragraphs 16 and 18):

‘It seems to me that it has not been established that the authorities have yet moved to a

free standing claim for unjust enrichment in the sense that a Claimant can get away with

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pleading facts which he says is unjust…Accordingly, had I to decide the point in this

case…it would follow that the claim fails because it does not plead facts which are

capable of bringing the case within one of the established restitutionary claims or some

justifiable extension of them’.

Accordingly the Defendant submitted that:

a. The Claimant’s amended Statement of Claim does not substantiate a cause of action in

contract and/or quantum meruit and so does not comply with the requirements of Part 8.6

of the CPR;

b. The Claimant cannot maintain an action for breach of contract against the Defendant

since the Central Tenders Board possessed the exclusive authority to bind the State in a

contract of this value and neither the Ministry of Works nor the Permanent Secretary,

Ministry of Works was so authorized;

c. The Claimant’s amended Statement of Claim does not disclose a plea of unjust

enrichment;

d. Alternatively, there can be no valid claim for unjust enrichment since to do so would

stultify the policy of the Central Tenders Board Act.

The Claimant submitted that the Central Tenders Board is the Statutory Agent of the

Government in awarding contracts by competitive tendering procedures and pointed out that the

Act permits Ministers and Permanent Secretaries to act for the board within limits and as

provided for by sec. 12 (1) and 13 (3) for The Central Tenders Board Regulations. The

Regulations grants a Permanent Secretary authority to do the same where the total value of

works and service does not exceed one million dollars. The officer is also empowered to

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purchase materials and to provide for the payment for services performed where the total cost

does not exceed one million dollars.

Having regard to the regulations the Claimant contends that there can be no question that the

Permanent Secretary of the Ministry of Works contracted with the Claimant to conduct certain

works in relation to the San Fernando Harbour Project Phase 1. In response to the instructions to

tenderer issued by Consulting Engineer and Project Managers – Lee Young and Partners, the

Claimant submitted a tender for the said project in the sum of $6,740,894.00, and a letter of

acceptance was forthcoming from the Consulting Engineers on August 8th

2000. Further, a

performance bond was signed on 23rd

August, 2000, bills of quantities were received and the

works were completed by the Claimant.

The Claimant contended that in the AD Silva case it had not been shown that the collector had

any authority to sell property of the crown or to enter into a contract, nor was it shown that the

Chief Secretary, who had authorized the sale, had any such authority to enter into the contract for

the sale of the goods. Unlike in the AD Silva case, the Claimant indicated that the Permanent

Secretary did have authority to contract with the Claimant but the issue was that due to the value

of the contract, the Permanent Secretary acted beyond his statutory power. The Claimant

advanced that it would be untenable in law and unconscionable for the contract to be viewed as

illegal and contrary to the statute, thereby preventing recovery of the sums claimed for services

rendered to the State and ultimately to the people of Trinidad and Tobago.

The Claimant referred to the case of St. John Shipping Corporation v Joseph Rank Limited

[1957] 1 Q.B. 267. The St. John Shipping case dealt with a refusal by cargo owners to pay the

balance claimed for cargo carried in a ship that had been loaded below its load line, in breach of

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statute, and for which a criminal sanction was prescribed. The contract concerned was not

expressly prohibited by the terms of the statutes, the issue, however, remained as to whether or

not the contract was impliedly prohibited. Lord Devlin stated at page 287 that-

“[T]he fundamental question is whether the statute means to prohibit the contract. The

statute is to be construed in the ordinary way; one must have regard to all relevant

considerations and no single consideration, however important, is inclusive.”

Devlin J went on to sat at page 288 that-

“if a contract has as its whole object the doing of the very act to which the statute

prohibits, it can be argued that you can hardly make sense of a statute which forbids an

act and yet permits to be made a contract to do it, that is a clear implication. But unless

you get a clear implication of that sort, I think that a Court ought to be very slow to hold

that a statue intends to interfere with the rights and remedies given by the ordinary law of

contract. Caution in this respect, I think especially necessary in times when so much of

commercial life is governed by regulations of one sort or another which may easily be

broken without wicked intent.”

The Claimant contended that the learned judge proceeded to elaborate on two main areas which

would be adversely affected by the indiscriminate nullifying of contracts via the doctrine of

illegality and pointed out that there was the more general issue of justice on which Devlin J

commented at page 289 that:

''Persons who deliberately set out to break the law cannot expect to be aided in a court of

justice, but it is a different matter when the law is unwittingly broken. To nullify a

bargain in such circumstances frequently means that in a case – perhaps of such triviality

that no authority would have felt it worthwhile to prosecute – a seller, because he cannot

enforce his civil rights, may forfeit a sum vastly in excess of any penalty that a criminal

court would impose; and the sum forfeited will not go into the public purse but into the

pockets of someone who is lucky enough to pick up the windfall or astute enough to have

contrived to get it.'

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Further the Claimant referred to the issue of the nullification of a valid commercial expectation,

where Devlin J said:

''It may be questionable also whether public policy is well served by driving from the seat

of judgment everyone who has been guilty of a minor transgression. Commercial men

who have unwittingly offended against one of a multiplicity of regulations may

nevertheless feel that they have not thereby forfeited all right to justice, and may go

elsewhere for it if courts of law will not give in to them. In the last resort they will, if

necessary, set up their own machinery for dealing with their own disputes in the way that

those whom the law puts beyond the pale, such as gamblers, have done.

The Claimant also referred to the case of Shaw v Groom [1972] Q.B. 504, Sachs LJ stated at

page 523 as follows:

“One must look at the relevant statute or series of statutes as a whole and then assess

whether the legislature intended to preclude the plaintiff recovering in the action, even

when an essential act is under consideration.”

In the circumstances the Claimant contended that the contract is not illegal and unenforceable

and pointed out that the Central Tenders Board Act does not provide for a circumstance where

the is a failure to comply with the terms of the Act.

The Court was directed to the case of the Attorney General v. Motilal Ramhit and Sons Ltd. Civ

App No 124 of 1996 and the Claimant submitted that the said judgment demonstrates that

illegality is not an absolute bar to the enforcement of civil remedies by a non defaulting

contracting parties and that the Claimant’s case ought not to be struck out because the State did

not comply with its own regulations.

With respect to the Defendant’s submissions on quantum meruit, unjust enrichment and the

Claimant’s pleadings, the Claimant pointed out that the Defendant in its Defence and in the

Consent Application of the 21/1/13, did not raise those issues and the only challenge was in

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relation to the authority on lack thereof of the Permanent Secretary and/or Lee Young and

Partners. In any event, the Claimant contended that every material particular to support the

claim was pleaded at paragraph 16 of its Statement of Claim.

Accordingly the Claimant submitted that even if the Court held that the Permanent Secretary

acted ultra vires the provisions of the Act, the State has been unjustly enriched and so the

Claimant is entitled to re-compensate.

In its submissions in reply, the Defendant stated that its submissions was not predicated on

illegality but on want of Authority and that the Claimant’s alternate position in relation to a

quantum meruit claim based on the free acceptance of services was not pleaded and it is

impossible for an unjust enrichment claim based on free acceptance to arise on the Claimant’s

case.

The Defendant submitted that it cannot be a party for contract unless the contract was made by

an agent acting within the scope of his authority and that in this case the Permanent Secretary

had no such authority.

The Defendant sought to distinguish the Motilal Ramhit case and submitted that it was wrongly

decided and stated that the case conflated illegality and agency as well as actual ostensible

authority.

The Defendant stated that the Permanent Secretary in going beyond his authority stopped being

an agent for the Defendant and a civil remedy may be available against him but not as an agent

against the Defendant.

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In addition the Defendant pointed out that the Ramhit case is not an authority for the proposition

that the defendant can be held liable on a contract entered by someone purporting to have

authority and having none.

RESOLUTION OF ISSUES

Issue 1

Whether the Claimant can maintain an action for breach of contract against the Defendant

having regard to the provisions of the Central Tenders Board Act Chp. 71.97 (the act) and

whether the Claimant’s amended Statement of Case complies with the requirements of

parts 8 and 26 of the CPR as amended and outlines a cause of action in contract against the

Defendant.

Section 4 of the Act provides:

(a) To act for, in the name and on behalf of the Government and the statutory bodies to

which this Act applies, in inviting, considering and accepting or rejecting offers for the

supply of articles or for the undertaking of works or any services in connection therewith,

necessary of carrying out the functions of the Government or any of the statutory bodies;

(b) The Board shall have such other functions and duties as the President may by order

prescribe from time to time.

Sec. 35 of the Act provides for the making of Regulations for the carrying out of the intent and

provisions of the Act.

Pursuant to section 12 of the Act a Permanent Secretary may act for the board where the total

value of the articles supplied or works undertaken does not exceed one million dollars and under

Regulation 12(3) the Permanent Secretary may also approve payment for the performance of

services the total value of which does not exceed one million dollars. It should be noted that at

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the time the contract in the instant case was entered into, the limit of the Permanent Secretary

was $25,000.00. Section 12 (1) of the Central Tenders Board Regulations also provides that the

Permanent Secretary shall not for the purpose of giving himself authority to act under the

regulation, sub divide the quantity of articles to be supplied or works and services to be

undertaken into two or more portions so that the value of each portion places such portion within

his jurisdiction.

The regulation therefore clearly placed a limit upon the authority that can be exercised by the

Permanent Secretary.

In the AD Silva Case (supra) portions of which were referred to earlier in this judgment, the

Privy Council clearly stated that “the right to act” for the crown in any particular matter must be

established by stature or otherwise. No public officer, unless he possesses some special power,

can hold out on behalf of the Crown that he has the right to enter into a contract in respect of the

property of the Crown when in fact so such right existed.

Guided by the dicta in AD Silva, this Court holds that the authority of the Permanent

Secretary as provided under Sec. 12 of the Regulations was limited in that it arose under

the regulation and accordingly the authority to act for and on behalf of the Government

was limited to the circumstances where the criteria stipulated under section 12 of the

Regulations are strictly adhered to, namely where the total value of the works and services

undertaken does not exceed one million dollars. Once the total value of the works or

services exceeds one million dollars then the Central Tenders Board, in accordance with

the provisions of the Act, has the sole and exclusive authority to act for and in the name of

and on behalf of the Government of Trinidad and Tobago.

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Accordingly, the Court holds that in the instant case the Permanent Secretary had no

authority either apparent or ostensible to contract with the Claimant in the manner and on

the terms that were engaged.

Does the lack of Authority render the contract illegal?

The Defendant’s position is that in going beyond his authority the Permanent Secretary stopped

being an agent of the State and his actions therefore do not bind the State and the Claimant could

have pursued civil remedies against the Permanent Secretary personally.

Consequently the Defendant says that the contract is illegal and unenforceable. The Claimant

relied on the case of the Attorney General v. Motilal Ramhit & Company Ltd. Civ. App. 124 of

1990 and advanced that the judgment indicates that illegality is not an automatic bar to civil

remedies by a non defaulting contracting party.

Analysis and Effect of AG v. Motilal Ramhit

In the Ramhit case the Plaintiff said the Attorney General of Trinidad and Tobago and Mr.

Lennox Rattansingh for the balance owing for upgrade works done at the Honeymoon

Recreation Ground in Tunapuna. The Attorney General was sued on behalf of the state on whose

behalf it is alleged that its servants or agents Mervyn Theodore and Ulric Williams attached to

the Unemployment Relief Programme (URP) a division of the Ministry of Works, had engaged

the plaintiff to carry out the works. Lennox Rattansingh was sued in his personal capacity for

ratifying the contract and instructing the plaintiff to carry out further works. The evidence in that

case was that the plaintiff has received works from the Ministry for 28 years without award from

the Central Tenders Board. The Court found that while it was true that the Central Tenders Board

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is a statutory agent of the government in awarding contracts by competitive tendering

procedures, Williams, Theodore, Rattansingh were held out as having ostensible authority to

award contracts. The Court ordered inter-alia that the Attorney General was to pay to the

Plaintiff $421,286.40 with interest rate of 6% per annum.

Nelson JA delivered the judgment on appeal and the appellant argued:

(a) That the works performed were executed in breach of the Central Tenders Board

Ordinance 1961 as amended (“the Ordinance”) and regulation 12 of the Central Tenders

Board Regulations 1965 (“the Regulations”).

(b) That none of the persons who requested the works had actual or ostensible authority to do

so because of the provisions of the Ordinance and that the State is not stopped from

denying the lack of authority of its servants or agents where they in fact have none.

In the case, the facts were not in dispute and the appellant offered no evidence before the trial

Judge. The contract was awarded by the Unemployment Relief Programme (URP) supervisor

(the URP being a division of the Ministry of Works) and a project coordinator.

The contract was in relation to one project at a single location but it was agreed that the work

was to be done in sections from week to week and weekly invoices had to be submitted for sums

not in excess of $5,000.00.

Sometime after, the URP supervisor was replaced by another individual who was named as the

second defendant and the evidence was to the effect that this party agreed for the works to

continue when he took over from the supervisor.

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The re-amended Statement of Claim pleaded the engagement, performance of works and failure

of the Appellant to pay invoices which were approved and presented. In the Defence, the

engagement was admitted but it was alleged that the Project Coordinator had no actual or

ostensible authority to engage the Respondent.

In the closing address, Counsel for the Appellant pointed out that the contract did not comply

with the Central Tenders Board Ordinance because the value of contract required that the same

had to be awarded by the Central Tenders Board and that under the Ordinance only specified

officers had the power to award contracts.

The Court of Appeal pointed out that in the Reply it was expressly pleaded by the

Respondent/Plaintiff that the works were broken down into divisible contract and invoices each

under $5,000.00 were presented and the Court noted that no evidence was led in rebuttal of the

Respondent’s evidence on this issue.

It is clear that on the facts as the Court found them, that the contract having been broken into

divisible contracts, resulted in a situation where it was not required under the Ordinance for the

contract to have been made by the Central Tenders Board. The issue then was whether the

officers who engaged the Respondent/Plaintiff to undertake the smaller divisible contracts

namely the URP Supervisor, his subsequent replacement as well as the Project Coordinator, had

the authority to do so.

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The Court of Appeal pointed out that illegality must be particularized and pleaded but where in

the absence of a pleaded reference, the illegality is disclosed on the Plaintiffs evidence the court

would not uphold an illegal transaction . The Court found that on the facts disclosed at trial there

was no evidence on the Respondents/Plaintiff’s case of any illegality. Nelson JA at paragraph

(xiiv) of the judgment went on to state that “no evidence was led to counter either the pleading or

the viva voce evidence that the project constituted a series of contracts each of a value not

exceeding $5,000.00 so it could not be properly contended that the sums raised a presumption

that the Ordinance applied to the said work.”

The Defendant in the instant matter submitted that on the facts of Motilal the Ordinance would

have applied whether the contract was a single contract or divisible contracts. The position

appears to this court to be accurate, however the Ordinance would have applied in different ways

depending on the nature of the contract. Under the Ordinance and depending on the total value of

the contract either the Board or by a Permanent Secretary and/or a public officer to whom he

delegated his power in accordance with the provision of the Ordinance could have entered

contracts under a certain value. For the smaller contract sums as provided for by the Ordinance,

the Permanent Secretary or a delegated public officer could enter into contracts by or on behalf

of the state. As a result an issue raised by the facts of Motilal was whether the URP Supervisor

(and his replacement) as well as the Project Coordinator were public officers to whom the

Permanent Secretary had delegated his powers in accordance with the Ordinance. Unlike a

Minister who under the common law had the authority to bind the state, the officers who

engaged the Respondent in the Motilal case had to have been authorized to enter into the

contract.

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The Trial Judge held that they did have the ostensible authority to enter into a binding contract

with the Respondent. In the AD Silva case (supra), it was established that the burden of showing

that an officer of the crown had agency power in respect to a particular transaction on behalf is

the crown was on the party asserting that he had such powers and that the ostensible authority

does not arise through representations made by the officer himself.

At paragraph xvii of the Motilal judgment, Nelson JA said:

“It is therefore manifest that the person relying on the Ordinance has initially an

evidential burden to show the lack of authority of a contracting officer. He must also

demonstrate that the value of the works and/or services brings the contract within the

Ordinance or that such value is outside the statutory limit prescribed for the relevant

officer or his authorized nominee. No such evidence was led by the Appellant.

Accordingly, the argument about ostensible authority not being in Williams, Theodore

and Rattansingh is without substance. Nor is possible by merely looking at the sum

claimed to maintain that contracts for the project works came within the Ordinance.

Accordingly there was no factual basis for a defence of illegality or lack of authority.

This position is not consistent with the approach adopted in the AD Silva Case. The effect of

Nelson JA’s statement is that the burden of proof in relation to establishing ostensible authority

rests with the state if it seeks to rely on the provisions of a contracting officer.

Ostensible authority must be predicated on a representation by the principal to the existence of

the agent’s authority. As a result it appears to this Court that the burden of proof to establish

same must therefore rest with the person who seeks to establish the ostensible authority and such

a person would have to adduce evidence of the nature of the representation by the principal that

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outlined the facts of and the extent of the agent’s authority. This analysis however conflicts with

the dicta of Nelson JA in the Mootilal Ramhit case and while this Court respectfully disagrees

with the statement in Motilal on this issue, the Court is bound by same.

Nelson JA went on to state that it was not possible by merely looking at the sum claimed to

maintain that the contracts for the work came within the Ordinance. In the instant case this Court

is however of the view that by looking at the quantum claimed it is evident and patently obvious

that the contract entered into by the Permanent Secretary and the Claimant in relation to the work

undertaken was beyond the powers conferred to the Permanent Secretary whose limit at the time

was $25,000.00.

At paragraph xviii of the judgment, Nelson JA went on to state:

This conclusion is sufficient to dispose of this appeal. However, even on the assumption

that the Ordinance applied the Appellant must fail. The provision of work and services to

the government is not expressly or impliedly prohibited by the Ordinance. In the present

case the Ordinance prescribes penalties for illegal performance of the part of the

government and public officers only: see section 16(1) and (3) of the Ordinance. When

“the policy of the Act in question is to protect the general public or a class of persons by

requiring that a contract shall be accompanied by certain formalities and conditions ,

and a penalty is imposed on the person omitting those formalities or conditions, the

contract and its performance without those formalities or conditions is illegal, and

cannot be sued upon by the person liable to the penalties… But the other party to the

contract is not deprived of his civil remedies because of the criminal default of the guilty

party”: see Chitty on Contracts 25th

edition para. 1152. Where a government agent

breaches the Ordinance in the absence of knowledge or collusion the other contracting

party is entitled to avail itself of its civil remedies. The Respondent is therefore entitled to

recover the sums claimed.

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The Court is of the view that a distinction has to be made between an officer making the contract

who has acted within the ambit of his authority but has not fulfilled the proper conditions or

contractual formalities that are required and one where the officer has no authority to enter into

the contract and that later circumstance cannot be properly equated with the failure to follow

formalities or conditions. In the Mootilal Ramhit case, the Trial Judge found that there was

ostensible authority but nothing on the agreed facts before this Court establishes that there was

any representation by the Defendant that demonstrated that the Permanent Secretary had any

authority to act on behalf of the State in relation to the contract effected with the Claimant.

In the circumstances and having considered the Mootilal Ramhit decision, the Court is of the

view that issue of illegality was focused upon and therefore, the case does not stand as an

authority for the proposition that the defendant can be held liable on a contract entered into by

someone purporting to have authority and having none. The contract entered into in the

instant matter was not binding on the state, the Permanent Secretary had no apparent or

ostensible authority to enter into same and acted ultra vires of the provisions of the Central

Tenders Board Act and Regulations. The Court wishes to point out that Parliament

enacted the Act so as to ensure that proper procedure characterized by transparency and

fairness is adopted and adhered to in the procurement process. The effect of the Act, is to

regulate the conduct of officers of the state and to ensure that contracts are not awarded on

an arbitrary or self serving basis by persons such as Ministers who were entitled to

contract on behalf of the state at common law. If the spirit and tenor is rigorously followed

many of the unfortunate allegations of kickbacks and financial impropriety that have been

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levied against successive Governments would be curtailed. The Court feels that it is

necessary to point out that the Act and Regulations needs to be revisited. There is no

penalty for default by Permanent Secretaries or Ministers who do not follow the

procedures laid down in the Act nor is there any provision for the imposition of penalties

and deficiencies ought to be addressed.

Is the Claimant left without any recourse?

The Defendant has submitted that the Claimant’s pleading does not support a claim for quantum

meruit. This is an issue that was not raised in the Defendant’s pleadings and is a position that

appears to resile from the agreed position adopted under the consent application filed on the 21st

January 2013. It was agreed that the issue to be determined was whether the lack of apparent or

ostensible authority deprived the Claimant of its claim for a quantum meruit and the agreement

further provided that on the issue of quantum meruit that a joint independent expert would be

appointed to determine and ascertain the value of the works done and the parties agreed to be

bound by the valuation of the joint independent expert. This view notwithstanding, the Court

finds that by virtue of paragraph 16 of the amended Statement of Claim, the Claimant pleaded

the necessary particulars so as to support a claim for quantum meruit or unjust enrichment.

In its submissions the Defendant stated that to make a claim in unjust enrichment a Claimant

must prove, and therefore plead, three things: (i) that the Defendant has been enriched; (ii) that

the enrichment was at the Claimant’s expense; and (iii) that there was an unjust factor, that is,

something the law recognizes as making the enrichment unjust and requiring the Defendant to

make restitution of it – Banque Financiere de la Cite v Parc (Battersea) Limited (1999) 1 AC

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221, Lord Steyn at 227 and Lord Hoffman at 234. The Court accepts that the aforementioned

factors must be addressed in the pleadings.

The Claimant at paragraph 4 of its Statement of Case pleaded the nature and extent of the

arrangement that it agreed to undertake. At paragraph 8 the Claimant pleaded that it obtained

and executed the necessary performance bond and insurances and commenced work on the

project. At paragraph 13 it was pleaded that Engineers Lee Young and Partners certified the

completion of the works and issued a certificate on the 17th

October 2001. In its Defence the

Defendant admitted paragraphs 5 to 14 of the Statement of Claim.

At paragraph 2 of the Defence, the Defendant pleaded the lack of authority by the Permanent

Secretary and Lee Young and Partners to enter into any contractual relationship with the Plaintiff

and further pleaded that in response to paragraph 16 of the Statement of Claim which dealt with

the refusal to pay the amounts claimed that the refusal was as a result of the lack of authority to

enter into the alleged contract as was pleaded at paragraph 2 of the Defence.

In its Reply, the Claimant at paragraph 4 pleaded that the Defendant is estopped from raising

those arguments as the Ministry of Works received the benefit of the Plaintiff’s services and

have been unjustly enriched and further that the Plaintiff has received payments for some of the

work and services provided, from the Ministry of Works its servant and/or agents.

Halsbur’s Laws of England 5th

ed. Vol. 8 para 410 states, 414 and 415 states:

“It is now generally accepted that there are four stages to any restitutionary claim: (1)

the defendant must have been enriched; (2) the enrichment must have been at the expense

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of the claimant; (3) that enrichment must have been unjust; and (4) consideration must be

given to any applicable defences. The claimant must satisfy the court that the first three

elements of the claim have been satisfied. All three must be satisfied before a

restitutionary claim can succeed.”

414. “Where the defendant has requested or asked the claimant to carry out the work or

to provide the goods or services, the defendant generally cannot resort to subjective

devaluation and will be required to pay for the goods according to the terms of the

request or, in the absence of any price stipulated in the request, at a reasonable rate. In

many cases the existence of a request, together with work done or goods supplied in

compliance with the terms of the request, will lead to the inference that a contract has

been concluded between the parties and that contract will then govern the relationship

between them. However, where the 'contract' between the parties is void or

unenforceable, any obligation to pay for the work done or goods supplied under the

'contract' cannot be attributed to the law of contract and must be found, if at all, in the

law of restitution.

415. A defendant who 'freely accepts' goods or services may be held to have been

enriched thereby. A 'free acceptance' has been stated to occur where 'a recipient knows

that a benefit is being offered to him non-gratuitously and where he, having the

opportunity to reject, elects to accept'1 so that 'when a defendant has passed up an

opportunity to reject a benefit knowing that it was not offered gratuitously he has only

himself to blame for the resulting situation'.[…] Although a defendant is not generally

required to inform a claimant that he does not wish to receive and pay for a particular

service or good, there may come a point where the conduct of the defendant in hanging

back while the claimant carries out the work in the belief that he will be paid for it is so

unconscionable that a court will conclude that the defendant is unable subjectively to

devalue.”

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In Kleinwort Benson Ltd. v. Lincoln City Council (1998) 4 All ER 513 at 560 Lord Hope of

Craighead stated:

“The answer which is given to it will have significant implications for the future

development of the law of restitution on the ground of unjust enrichment. In my opinion

the proper starting point for an examination of this issue is the principle on which the

claim for restitution of these payments is founded, which is that of unjust enrichment. The

essence of this principle is that it is unjust for a person to retain a benefit which he has

received at the expense of another, without any legal ground to justify its retention, which

that other person did not intend him to receive.”

In its submissions the Defendant stated that this is not a case where the Defendant requested any

work or had any mistake belief about contract and that the Defendant was not involved at all.

The Defendant in its pleading admitted the Plaintiff’s claim as outlined at paragraphs 5 to 14 of

the Statement of Claim, in addition the parties’ filed an agreed statement of facts. The fact that

the Claimant undertook works on the San Fernando Harbour Project was not disputed.

It was also stated in the Statement of Agreed Facts filed on the 16th

March 2013, at paragraph 17

that the Claimant claims it did works at the San Fernando Harbour Project between August 2000

and December 2004 and that it was for and at the request of the Defendant its servant and/or

agents.

Paragraph 8 of the agreed statement of facts stated that it was agreed that the works executed

comprised inter alia of coastal reclamation in the vicinity of the derelict jelly.

The Claimant in support of the quantum meruit claim relied on three authorities: Craven Ellis-v-

Cannons Limited [1936] 2 K.B 403; Halsbury’s Laws of England 5th

edn Vol 88 para 410 and

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paras 414 and 415; and by Kleinwort Benson Limited –v-Lincoln City Council [1998] 4 All ER

513 (at 560).

The statement in the headnote from Craven Ellis case says:

‘The obligation to pay reasonable remuneration for work done when there is no

binding contract between the parties is imposed by a rule of law and not by an

inference of fact from acceptance of services.’

The phrase ‘from acceptance of services’ seems to qualify ‘an inference of fact’ and not ‘a rule

of law’, but this is just a shorthand way of making the distinction between the inferences of fact

and law, the basis of the inference being secondary. The acceptance of services is necessary for

the inference of law to arise, as is clear from reading the judgment.

In the said case the defendant was a limited liability company, the shareholders were A. du Cors,

P. du Cors, A.W. Wheeler, and the plaintiff. All the shares were held by P. du Cors and A.W.

Wheeler, but they held them as nominees for the du Cors. On the 14th

of April 1931, the

company purported to make a contract with the plaintiff through persons who at one time had

been directors, but who, at the time the contract was made, had ceased to be directors. Those

persons were the du Cors, Wheeler and the plaintiff himself. The plaintiff provided the defendant

with valuable services under the contract. Before entering the contract he had provided services

to the company (between December 31, 1930 and 14 April 1931) without there being a contract

between himself and the company, which the company received and accepted.

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The plaintiff was held entitled to recover a sum in quantum meruit for the work done before he

entered the contract. The contract was held to be void, but it was also held that he could recover

in quantum meruit for the services provided pursuant to it as well.

‘As regards the services rendered between December 31, 1930, and April 14,

1931, there is, in my judgment, no defence to the claim. These services were

rendered by the plaintiff not as managing director or as a director, but as estate

agent, and there was no contract in existence which could present any obstacle to

a claim on a quantum meruit for services rendered and accepted.’

The Court stated at page 409.

‘As regards the plaintiff’s services after the date of the contract, I think the

plaintiff is also entitled to succeed. The contract, having been made by directors

who had no authority to make it with one of themselves who had notice of their

want of authority, was not binding on either party. It was, in fact, a nullity, and

presents no obstacle to the implied promise to pay on a quantum meruit basis

which arises from the performance of the services and the implied acceptance of

the same by the company.’

In the instant matter the work undertaken between 2001 and 2004 was done in a very public

location the Defendant admitted the fact of the work, and in the filed statement of agreed facts it

was stated that the Defendant was aware of and accepted the Claimant’s services.

In the view of this Court, it cannot be rationale to conclude that although substantial work

is undertaken which ultimately benefited the public and people of Trinidad and Tobago

and therefore the Defendant, that the cost associated with the said work is not to be

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addressed. It was clear that the Claimant did not agree to undertake same free of charge

and the value that can be attached to same is significant.

Although the Permanent Secretary acted ultra vires the provisions of the Central Tenders

Board Act in entering into a contract with the Claimant, the work that was subsequently

effected over an extended 4 year period, in a public place which would have been under the

control and charge of the State of Trinidad and Tobago. In so far as the work was done on

property belonging to the State, the State derived a benefit from the said work that was

conducted in relation to the San Fernando Harbour Project. This Court therefore holds

that the state has been unjustly enriched and the Claimant is therefore entitled to

recompense.

Accordingly pursuant to the terms of the agreement entered under the consent application,

the court orders that:

1) The Claimant is entitled to be paid for the work effected on a quantum meruit basis.

2) The parties are to appoint a joint independent expert within 28 days to determine

and/or ascertain the value of the works undertaken by the Claimant. The parties

shall be bound by the said valuation. The Defendant shall pay to the Claimant the

sums stated in the valuation by the joint independent expert within 30 days of

receipt of same together with interest thereon.

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3) The Defendant shall pay to the Claimant costs to be calculated pursuant to the

provisions of the CPR 1998 (as amended) and having regard to the Pre Trial Review

stage of this matter and based on the valuation of the independent expert.

4) There shall be liberty to apply.

…………………………………..

FRANK SEEPERSAD

JUDGE

the republic of trinidad and...

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