Maroc - NEWSDAY.CO.TT - A la Une - Hier 15:52

Appeal Court reduces EMBD million-dollar payout to contractor

The Court of Appeal has largely upheld a judge’s findings in a long-running dispute between the Estate Management and Business Development Company Ltd (EMBD) and NAMALCO Construction Services Ltd, which was ordered to pay over $427 million in unpaid fees to the mega-contractor from La Brea, for infrastructure works it performed on four residential communities for former Caroni (1975) Ltd. In the appeal, both companies challenged the findings of then-High Court judge Ricky Rahim (now an Appeal Court judge). Justices Peter Rajkumar, Ronnie Boodoosingh and Geoffrey Henderson varied the High Court ruling, instead ordering the EMBD to pay Namalco $121 million for infrastructure works at the four housing projects. The state entity also successfully reclaimed $48.5 million in overpayments to Namalco. In 2022, Rahim ordered EMBD to pay Namalco more than $427 million for works done at Cedar Hill, Roopsingh Road, Petit Morne, and Picton Monkey Town on lands once managed by Caroni (1975) Ltd. Rahim, however, voided several supplemental contracts after finding they were procured through an “unlawful means conspiracy.” Namalco had originally claimed, in 2016, more than $1.3 billion, asserting EMBD had failed to pay for completed infrastructure works. EMBD countered that some contracts, signed by then–chief executive officer Seebalack Singh, were invalid because he lacked the authority to approve agreements over $1 million without a public tender. Rajkumar, delivering the main judgment, agreed that Singh acted beyond his authority and in breach of fiduciary duty. He ruled that Namalco knew or ought to have known that Singh could not unilaterally sign off on the multimillion-dollar supplemental agreements (SAs), which inflated project costs by roughly $314 million. As a result, the appellate court affirmed that the supplemental agreements were void and recalculated the company’s liability using the original contract rates. The court ordered EMBD to pay Namalco $121,090,343.66 for certified works at Roopsingh Road, while Namalco must repay $48,519,231.25 for overpayment under the Petite Morne project. Interest of 2 per cent per year will accrue from May 6, 2016, until final settlement. Justice Boodoosingh, while concurring with the outcome, expressed concern that findings of conspiracy were made without Singh being named as a party to the proceedings, noting that fairness requires alleged wrongdoers to be allowed to respond in court. Rajkumar acknowledged his colleague’s concerns about fairness, but noted that their ruling made no conclusive adverse finding against Singh. He further noted, “However, it was legitimate to examine his conduct, not in the context of making conclusive findings of wrongdoing by him, but in the context of such alleged conduct constituting prima facie, though rebuttable, evidence against Namalco. “That evidence was not adequately rebutted by Namalco.” In his reasons, Boodoosingh noted the case highlighted the need for stronger governance and clearer contract oversight within state enterprises, particularly when political administrations change. “Cases set precedents. As boards and governments change, there may be reviews and investigations of what occurred previously. It sets a potentially bad precedent when the court is called upon to make findings such as that an individual was involved in a conspiracy or breached his or her fiduciary duties without being brought as a party to answer it. “A choice can always be made in respect of whether a relief in damages may be pursued against such an individual, but to not have that party brought before the court for declaratory relief creates a real difficulty to establish a case against an alleged coconspirator.” He also offered advice to litigants, “There will likely be cases like this in the future. Notwithstanding the obvious eagerness to act that occurs when administrations change, when civil cases are filed, perhaps parties ought to assist the judge more carefully and directly to ensure that the overriding objective of the CPR is attained, to deal with cases justly and to ensure the resources of the court are efficiently employed. “The core issues should be identified and addressed, and there must be cooperation to ensure the cases are managed efficiently, proportionately and with economy. “Shorn of some of its strands, this was an assessment claim for the work that was actually done. No doubt some of the errors the judge made happened simply because of the breadth of the case that was put before him for determination.” He noted the case was really about rates, work done, and sums claimed “to ensure value was obtained in the expenditure of public funds for work being undertaken for a societally beneficial objective,” and commended Rahim for his thorough approach to the evidence. “This was obviously an important case for the parties and the public because it involved the use of public funds. The sums involved were substantial.” In deciding EMBD’s appeal, the judges held that Rahim was correct in his findings on conspiracy to injure and unlawful means conspiracy. “The main acts carried out pursuant to the conspiracy were the execution of the SAs and the submission of claims thereunder for amounts which far exceeded the actual value of the works performed.” Rahim’s finding that Namalco knew EMBD’s internal procedures had been breached by the execution of the SAs without a tender process was also upheld, and so, too, was his finding on breach of fiduciary duty. “The trial judge had all the evidence before him to make such a finding unequivocally, and arguably did so.” However, the Appeal Court found he erred in concluding that the EMBD board, in 2015, had ratified the SAs, and the calculation of the rates payable under the agreements, some of which he had referred to a master for assessment. “The trial judge’s failure to appreciate that he did have this evidence constituted a material error justifying appellate intervention. It was his misconstruction of the evidence and misunderstanding of its effect that led to his decision to refer the assessment to a Master.” To avoid unnecessary and unjustifiable duplication of resources, Rajkumar invoked the appellate court’s power to intervene and recalculated the rates. Rahim’s award of interest remained the same. At the High Court, Rahim had also been asked to review related issues involving four engineering and project management firms, including Atlantic Project Consultants Ltd, BBFL Civil Ltd, and Lee Young and Partners. While some breaches of duty were found, the judge ruled that EMBD had not proven it suffered financial loss due to those firms and dismissed parts of that claim. In the ruling, the Appeal Court acknowledged that the parties had agreed that those issues would not be addressed in its ruling, including the necessity of remitting it to the High Court, unless and until the parties are given a final opportunity to explore other possible resolutions. Representing the EMBD were Jonathan Acton Davis, KC, George Hayman, KC, Colin Kangaloo, SC, Christopher Reid and Danielle Inglefield. Namalco’s attorneys were Richard Millett, KC, Roger Kawalsingh, Ashely Roopchansingh, Karina Singh and Leon Kalicharran. Atlantic Project Consultants was represented by Douglas Mendes, SC, and Blaine Sobrian. The post Appeal Court reduces EMBD million-dollar payout to contractor appeared first on Trinidad and Tobago Newsday.