3rd Nov 2022
Lord Stephens (with whom Lord Lloyd-Jones, Lord Briggs, Lord Leggatt and Lord Burrows agree):
In these proceedings A & A Mechanical Contractors and Company Ltd (“the appellant”) claims the value of variations carried out under a construction contract entered into with the Petroleum Company of Trinidad and Tobago (“the respondent”). At first instance the appellant relied on the respondent’s letter dated 23 June 2008 (“the June 2008 letter”) as agreeing the value of certain variations amounting to TT$7,291,961.81. In addition, it claimed the value of certain other alleged variations not addressed in that letter. The June 2008 letter was not marked “without prejudice”. At trial the respondent objected to the June 2008 letter being admitted in evidence on the basis that it was part of without prejudice negotiations between the parties. In his judgment dated 28 April 2014 Boodoosingh J (“the judge”) held that the June 2008 letter was not written on a without prejudice basis and therefore could be admitted as evidence. Based on the June 2008 letter, the judge made an award in favour of the appellant in the sum of TT$7,291,961.81. The judge also awarded a further TT$2,680,300.93 in relation to variations numbered 27A, 27B1, 27B2, 28 and 29 which were not addressed in the June 2008 letter. Accordingly, the total award in favour of the appellant was TT$9,972,262.74.
On 12 December 2019, the Court of Appeal (Mendonҫa and Smith JJA, with Jones JA dissenting on this issue) held that the June 2008 letter was a “without prejudice” communication and was as a result inadmissible. Consequently, the Court of Appeal set aside the award of TT$7,291,961.81 and remitted the question of the variations addressed in the June 2008 letter for retrial. The Court of Appeal unanimously set aside the further award of TT$2,680,300.93 in respect of variations 27A, 27B1, 27B2, 28 and 29 on the basis that the judge was wrong to conclude that there was no evidence given by the respondent concerning those variations. The appellant’s claims in relation to those variations were also remitted for retrial.
The appellant now appeals to the Board. On this appeal the appellant accepts that the total amount of the valuations which were agreed in the June 2008 letter was TT$5,180,175.31 rather than TT$7,291,961.81. Furthermore, the appellant accepts that by its pleadings it had excluded variation numbered 10c so as to further reduce its claim based on the June 2008 letter by TT$290,000.00 to TT$4,890,175.31.
The issues on this appeal are:
(a) Whether the Court of Appeal was correct to find that the June 2008 letter was without prejudice and inadmissible (“the first issue”);
(b) Whether the Court of Appeal was correct to interfere with the judge’s approach with respect to variations 27A, 27B1, 27B2, 28 and 29 (“the second issue”); and
(c) Whether the judge erred in failing to make an award with respect to interest (“the third issue”).
2. Factual background
The appellant is a limited liability company which performs engineering and construction works primarily in the oil and gas industry. Mr Azard Ali is the managing director of the appellant. Mr Selwyn James was the appellant’s project engineer and Mr Leon David and Mr Ali were the appellant’s project managers in relation to the works which are the subject matter of these proceedings.
The respondent, otherwise known as Petrotrin, was at all material times a state-owned oil company in Trinidad and Tobago. Its principal activities were the exploration, development and production of hydrocarbons in addition to the manufacturing and marketing of petroleum products. Mr Ainsley Newton was the respondent’s project manager and Mr Paul Fortune was the respondent’s construction supervisor in relation to the works which are the subject matter of these proceedings.
By its Invitation to Bid (“the ITB”) dated 28 October 2003 the respondent invited various contractors, including the appellant, to bid to perform stipulated steelworks relating to the strengthening of the respondent’s platform and block station number 4 in the respondent’s main Soldado oilfield.
On 17 December 2003 the appellant submitted its tender to carry out the work as stipulated in the ITB (“the work”) for the price of TT$26,800,000 (exclusive of VAT).
The appellant emerged as the successful bidder and on 23 September 2004, a contract was entered into between the appellant and the respondent. The parties agree that the contract is contained in several documents, namely the ITB dated 28 October 2003, the respondent’s General Conditions of Contract, the appellant’s tender dated 17 December 2003, the respondent’s letter of intent dated 23 July 2004, addenda numbers 1 and 2 dated 20 and 28 November 2003 and the respondent’s purchase order dated 23 September 2004.
Under the contract the appellant agreed to carry out the work for the “Contract price” of TT$26,800,000 (exclusive of VAT) or such other sum as should become payable under the contract.