IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 206 of 2007L

Between:

JOE MCGOWAN
of Lami, holder of the Power of Attorney for Mr & Mrs Felicia Tugi.
Plaintiff

And :

Mr MUNI CHAND trading as 
M. CHAND CONSTRUCTION of Drasa Vitogo, Lautoka
Defendant

FINAL JUDGMENT

Judgment of  : Ms Dias Wickramasinghe J.

Counsel Appearing : Mr E. Maopa for the Plaintiff.
Mr H.A.Shah for the Defendant.

Solicitors : Babu Singh and Associates for the Plaintiff.
 H.A.Shah Esqr for the Defendant.

Date of Judgment : 21 April 2011

INTRODUCTION

[1]	The plaintiff, by its writ of summons dated 3 July 2007, initiated this action.

[2]	At the commencement of the hearing, Mr Maopa, counsel for the plaintiff, informed court that he was withdrawing the plaintiff’s action on instructions. He explained that the plaintiff was unable to pursue the action, as his dwelling had burnt down destroying all his documents. The plaintiff was not present in Court. Mr Shah, who appeared for the defendant, informed court that he was ready to pursue his counter claim and moved for costs amounting to $5000, as he and his client were informed of the withdrawal of the case only in the morning of the date of hearing. I then dismissed the plaintiff’s action, ordered the defendant to proceed with his counter claim, and reserved to determine the application for costs in the cause. Mr Maopa informed that he would be resisting the counter claim. 

[3]	The four causes of action set out in the counter claim arose from alleged breaches of Articles of Agreement dated 4 November 2005 entered between the parties. (agreement marked Exhibit ABOD 1). The first two counter claims alleged under items (a) and (b) arose consequent to extra work that were to be carried out as variations. The alleged counter claim at item (c) relates to the balance payment for the works carried out for stage 9. The counter claim under item (d) arose consequent to the alleged wrongful termination. At the hearing, Mr Shah informed court that the defendant was limiting his claim on item (d) above to $42,000, which arose consequent to the works carried out for stage 10 and the retention monies due on stage 11 respectively. Accordingly, his total claim in the counter claim stood at $93,500. At the hearing, Mr Shah further informed court that after discounting $3300 for the balance outstanding work, the defendant was only claiming a total sum of $90,200 on all four counter claims. 

[4]	Clause vii (12) of the agreement provided for the parties to refer the dispute to Arbitration. However, neither party raised an issue on the jurisdiction of this court. 

[5]	At the hearing, the defendant- Muni Chand (DW1) and his son Munesh Chand (DW2) gave evidence in support of the counter claim. The Agreed Bundle of Documents (ABOD) consisting of 12 documents were marked as Exhibits ABOD D 1 to D 12. At the trial, the defendant also produced a photograph marked, Exhibit ABOD D 13. 

[6]	At the end of the hearing, parties filed written submissions. None of the submissions made any reference to wrongful termination. Therefore, I requested both counsel to make oral submissions on wrongful termination. The plaintiff’s counsel did not appear to make oral submissions but filed submissions. Mr Shah filed some submissions on 21 March 2011 and requested further time to file additional submissions, but failed to do so. 

AGREED FACTS AND ISSUES 

[7]	As set out in the pre-trial conference minutes, the parties agree on the following facts and issues: 

AGREED FACTS

1.	The plaintiff holds the Power of Attorney for Mr & Mrs Felecia Tugi the owner of the property at Lot 17 FASA Subdivision, Martintar, Nadi.

2.	The defendant involves and operates business of building and constructing private and commercial buildings at Nadi and elsewhere in Fiji.

3.	By Articles of Agreement dated 4th November, 2004 the defendant agreed to construct an eight (8) unit 2 storied apartment for the plaintiff at Lot 17 FASA Subdivision, Martintar, Nadi in the sum of $440,000.00 (four hundred forty thousand dollars).

4.	The defendant commenced construction work on the building site after the execution of the said Articles of Agreement.

5.	Pursuant to clause (vi) of the said agreement liquidated damages for delay beyond the completion date will be charged at $250.00 per day.

AGREED ISSUES

1.	Whether the written completion period Nine Calendar Months was extended by mutual agreement.

2.	Whether the defendant abandoned the construction works or did the plaintiff wrongfully terminate the contract.

3.	Did the defendant breach the written and oral variations of the said contract and if so did the plaintiff suffer any damages as a result thereof.

4.	Whether the plaintiff sought several variations to the written agreement, which necessitated extra works and caused times delay.

5.	Whether the plaintiff caused delay by late payments for progress works.

6.	Whether the defendant at the request of the plaintiff carried out additional works namely:

(i)	Steps footing –: $15,000.00
(ii)	Main switchboard location installation for eight units – cost:$ 6,500.00

And whether the plaintiff has paid the same or not.

7.	Whether the defendant has completed the following works for which payment has not been made by the plaintiff:

(i)	Completion of ceiling and panels;
(ii)	Joinery painting and finishing
Total owed $30,000.00

8.	Whether the plaintiff wrongfully and in breach of the written and partly oral agreement terminated the building contract thereby depriving the defendant of a balance contractual sum of $72,000.00. And whether such sum or any other sum is due and payable by the plaintiff to the defendant.

BACKGROUND FACTS 

[8]	The plaintiff employed the services of the defendant to construct a two-storied apartment complex (the works) with eight units, in Nadi, (the property) for a sum of $ 440,000. (contract sum). The works had to be carried out subject to the terms and conditions stipulated in the agreement. The contract sum had to be paid at eleven different stages, as stipulated in the ‘Progress Payment Scheme’. Clause iii of the agreement required the plaintiff to pay the contract sum progressively upon certification of the progress claims approved by Grey Project Designs Limited. The contractual period was 9 months, commencing from 7 November 2005, with a ‘practical completion’ scheduled for 28 July 2006. Admittedly, the works were not completed within the contractual period of 9 months. The defendant asserted that the plaintiff sought several variations, which necessitated extra work, resulting in delays. Subsequently, the plaintiff by letter of 3 April 2007 terminated the agreement. The defendant alleged that the termination was wrongful and counter sued in quantum meruit for the value of extra work and the balance monies payable on stages 9, 10 and 11. 

EVIDENCE 

[9]	DW 1- Muni Chand, the defendant in his oral testimony in court stated that he entered into the agreement (ABOD D1), and commenced work at the site in November 2005. He confirmed visiting the site daily, but said that his son was managing the construction work. He also agreed receiving payments from the plaintiff, except few bills, and said that his son, the next witness would further explain the outstanding payments. In cross-examination, he admitted that only 60%-70% of the work was completed at the time when the agreement was terminated. His evidence was that his workers were at the site when he received the termination letter and the delay was not caused by the defendant but by the owner, the plaintiff. He also said he understood the agreement to give him a 3-day notice before termination. 

[10]	DW2 - Munesh Chand, son of Muni Chand, and the Construction Manager of the defendant, in his evidence asserted that the work on the property commenced as per the agreement; received payments as set out in the ‘Progress Payment Schedule’ at page 4 of the agreement except payments for stages 9 to 11; carried out several extra works on the instructions of the engineer for which the defendant had not received payment. He confirmed the manner in which the variations had to be carried out at the site, i.e. only with the approval of the engineer- which was akin to the terms and conditions set out in the agreement. The witness admitted under cross examination that whilst construction was pending at the plaintiff’s property, the defendant also commenced construction at another building site at Wailoaloa, Nadi and when the plaintiff visited him a couple of times at Wailoaloa, only three workers were employed at the plaintiff’s site. Witness also confirmed that at the time of receiving the termination letter there were some outstanding works and the ‘Practical Certificate of Completion was not issued for the project while they were at the site. Witness also stated that the plaintiff delayed payments approximately 2 weeks or so, but did not produce any corroborative evidence. 

DOCUMENTARY EVIDENCE 
 
[11]	Exhibit ABOD D 6 confirmed that the engineer had inspected the site on 18 July 2006; recommended 50% of the payment for stage 9; and confirmed that approximately 60% to 70% of the works were completed. Evidence was not provided before me whether the engineer had made a similar recommendation for payment for the balance sum of money for stage 9. 

[12]	Two inspection reports were filed in the Agreed Bundle of Documents. The copies before court are much to be desired, which prevented me from identifying the source; perhaps one appears as Udu Limited. The first report dated 20 September 2006, marked ABOD D 7 was based on an inspection carried out on 16 September, detailing the outstanding works. (The year is not noted however, it should presumably be 2006). The second report dated 28 March 2007, marked, ABOD D 8, was prepared based on an inspection carried out on 21 March 2007, once again detailing the outstanding work as at that date. Evidence does not disclose who initiated the two reports. The two reports however, clearly reveals that as at the dates stated therein, the project had several outstanding works. Both reports were produced before court as part of the Agreed Bundle of Documents. DW1 in his evidence said that he could not remember whether the site was inspected by any other company other than Grey Project Limited. 

[13]	Munesh Chand, contrary to the evidence of his father Muni Chand, in his evidence stated that the outstanding works entailed only installation of a gate, tiling of a toilet in one unit, fixing kitchen bench tops for four units. The statement of defence in paragraph 7, sets out that the outstanding works as kitchen bench for four units, gate installation and paint touch up. According to the witness, the value of the above said remaining works was only $3,300. 

Payment mechanism 

[14]	An understanding of the payment mechanism adopted by the parties is necessary to examine the causes of action in the counter claim. Oral testimonies were not led before me to establish the payment mechanism between the parties. ABOD Exhibits D2 to D6, however confirmed that Kacimaiwai Engineers approved the release of the payments to the defendant by certifying same to ANZ Bank albeit, clause iii, clause vii (7) and clause vii (11) of the agreement required certification of the progress claims by Grey Project Designs Limited/ architect/ project manager. Although evidence was not led before me relating to the contractual relationship between Kacimaiwai Engineers and Grey Project Designs Limited, the documents at ABOD Exhibits D2 to D6 evinced that the payments were only released through the ANZ Bank and the Bank paid the defendant only upon the certification of the progress claims by Kacimaiwai Engineers. 

LEGAL MATRIX

[15]	This is a lump sum contract. Simply, the defendant agreed to construct two storied, eight units, apartment complex and the plaintiff agreed to pay $440,000.00 in consideration thereof. The agreement provided for the defendant to perform extra works, upon receiving written variation instructions. Needless, to state that the plaintiff would then be required to pay consideration for the extra work in excess of the contractual sum. 

[16]	As stated earlier, the plaintiff did not give evidence. Neither any evidence was led to defend the counter claim, except instructing his counsel to cross-examine the witnesses. Nor did the plaintiff at the end of the defence case move for a non-suit. Nonetheless, the defendant who is now in the ‘shoes of a plaintiff’ must prove his case on a balance of probability. 

[17]	The defendant in the counter claim prayed for the following four reliefs. 

(a)	$15,000 under paragraph 21 (i) (extra work - variation)
(b)	$ 6,500 under paragraph 21 (ii) (extra work- variation)
(c)	$30,000 under paragraph 23 (balance payment of stage 9)
(d)	$72,000 under paragraph 24 ( wrongful termination)

[18]	Both claims of item (a) and (b) above arose from variation orders. I would therefore, determine both these claims together. 

Counter claim for $15,000 under paragraph 21(i)/ $6,500 under paragraph 21 (ii) of the Statement of Defence.

[19]	While the claim for $15,000-under paragraph 21 (i) of the statement of defence, related to cost incurred due to construction of a step footing, the claim for $6,500 under paragraph 21 (ii) of the statement of defence, related to costs incurred, installing main switches in the eight units. The defendant alleged that the works carried out by him under both claims were extra works outside the agreement, as variations therefore required additional payment outside the agreed contractual sum. 

VARIATION ORDERS IN A BUILDING CONTRACT

[20]	Munesh Chand in his evidence explained that the cost for step footing which he was claiming under this claim, had occasioned consequent to a design error in the site leveling, which had to be corrected by the defendant as extra work. The costs for the switchboard locations had resulted when the defendant was requested to relocate them by the plaintiff. He asserts that these works are variations that need to be paid in addition to the agreed contractual sum. 

[21]	The agreement before me specifically provided several variation clauses, as stated below. 

Clause vii (6) of the Agreement provides:

‘any and all variation to the work must be communicated in writing by the Contractor to the Architect/Project Manager, provided that any and all variations shall be carried out and undertaken by the Contractor only after the same has been approved and certified in writing by the Project Manager’.

Clause vii (9) of the Agreement provides:

‘The Architect/Project Manager shall supervise the Contractor and the works in accordance with the generally accepted architectural procedures and practices shall make representation to the Employer regarding requests of the Contractor for variations that are relevant to the efficient and safe undertaking of the works advise the Employer and Contractor on variation/s required for the safe and efficient undertaking of the works and shall not unnecessarily or unreasonably withhold certifications necessary for the efficient and safe undertaking of the works in collaboration with the Employer’.

Clause vii (10) of the Agreement provides: 

“Any and all variation to the work requested by the Employer shall be given in writing by the Employer to the Architect/Project Manager who shall then make the necessary arrangements in writing that such variation may be incorporated by the Contractor in the works’. 

[22]	As seen above, the agreement specifically provided the manner in which variations should be carried out. I have no doubt that the parties in this case were well aware of the methodology of implementing the variations. Under cross-examination, Munesh Chand explained that he did not have any written instruction for variations in court but it was at home. However, when the witness was questioned by the court, he answered as follow;

Q1- Witness when you were asked to do the variations, were they made in writing. 
A-	No

Q2- Did the parties agree the amount that would cost to do the variations i.e. you, owner and engineer. 
A-	Yes. Not in writing. No quotations. As quotations would have exceeded that amount. 

Q- You have no documents to prove costs. 
A-	No. Not with me. Variation request claims are with Grey Project Office. I do not have a copy with me now. 

[23]	I am unable to accept the contradictory evidence of Munesh Chand on the issue. When giving evidence I found the defendant to be evasive on the point. The two claims are based on extra work. The defendant is pursuing the counter claim and onus rest with the defendant to prove his claim. 

[24]	There was no bar for the defendant to call as a defence witness, the architect or project manager or any other person to give evidence on the issue or to explain to court the inability of their presence. The above persons were not even subpoenaed by the defence, which would have no doubt assisted the defence case. The parties had ample time to prepare for their respective cases as the hearing date was fixed on 3 November 2010. Instead, Munesh Chand simply stated that variation orders were with Grey Project Design. If so, the defendant should have called Grey Project Design as a defence witness. The defendant did not produce any receipts or invoices to prove the costs, as claimed on these two claims. Not even a copy of a progress claim, that was required to be submitted for certification in terms of clause vii (3) of the agreement was produced before me, which would have confirmed the extra works, if any. I am reluctant to accept the uncorroborated evidence on these two claims. As the defendant failed to call as defence witnesses the architect or engineer or the project manager or any other, I am of the view that this is an ideal case to apply the Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 principle; where an inference should be drawn that the uncalled evidence of the said architect or engineer or the project manager would not have assisted the defendants’ case to prove that variations were in fact carried out. 

[25]	Hudson’s Building and Engineering Contracts (Tenth Edition) at page 506 explains the importance of a variation clause in a contract as follows. 

‘The provision usually found in building and engineering contracts under which the employer, or more usually his architect or the engineer, is given power to order variations, is inserted in the contract for two important reasons. In the first place, it gives the employer the power to require a variation of the work as of right, as opposed to relying on the readiness of the contractor to agree. In the second place, it has already been seen that and architect has no implied authority to contract on behalf of his employer’ 

[26]	Variations in a project could either be alterations, additions or omissions. Works, which are not included expressly or impliedly in a contract, are therefore performed as variations. Variations constantly affect the ‘contract price’ where the owner would either be required to pay an additional sum for the alterations or additions. Else, the contractor would be required to refund monies to the owner if the variations amount to omissions. Variations also influence the ‘contractual period’. While some variation may require additional time extensions, others may not require so. The architect/engineer or the project manager is, therefore, required to consider time extensions and costs of such time extensions. When professional services are provided in building contracts, such professionals are personally liable for their respective professional inputs in such buildings i.e. architects, engineers, etc. Therefore, even if an owner requires alterations such alterations may necessitate the input and the approval of the relevant professional experts to ensure that the variation would be safe and would not have any adverse effect on the construction. These requirements are more crucial in the present era than in the past in view of concomitant legal liabilities attached to professional’s work. Furthermore, full knowledge of the variations enable the employer to consider financial consequences thereby either refuting or authorizing additional payments with precision. It therefore requires the parties to have a full understanding before commencing the works on variations. Aforesaid reasons have now prompted most modern contracts to contain explicit provisions requiring variations to be in writing. 

[27]	In the absence of written approval for variation, it must evidence that, the owner had knowledge of and acquiesced the proposed variation for an owner to be liable for payment. If not, the owner, and in this case the plaintiff will not be liable for payment for variations.

[28]	As contended by Mr Moapa, it is the responsibility of the party to prove its claim. As held by Singh J in the case of Khan v Vinod Patel Company Ltd [2008] FJHC 102; HBC 121 of 2006 (30th April 2006), at paragraph 23, 

‘Plaintiffs who bring actions for substantial damages must prove their damage. They cannot simply write down figures and assert that this is their loss and expect the court to grant those damages or loss. They have to prove their loss. The court looks at the circumstances and the nature of the case and if greater details are warranted, the court will insist on that: Bonham Carter v. Hyde Park Hotel – (1938) 6 TLR 177; Ratcliffe v. Evans – (1986) 2 QB 524 at 532.There are situations where assessment of damages is largely speculative but the court does its best to arrive at a figure if it is satisfied that real damage has being suffered’. 

[29]	I am not convinced that the defendant has proved the aforesaid two claims on a balance of probability. Had the defendant at least proved that the plaintiff had knowledge of and acquiesced to the variation by leading independent corroborative evidence, I would have considered the breach of clauses vi (6), and (10) as being not fatal. It was only then I could have decided that the breach of an express provisions still justified payments. Mr Shah states that I should consider the defence evidence as admitted since it was unchallenged. I am unable to accept the submission of Mr Shah that the court must necessarily admit all unchallenged evidence as admitted facts. As noted earlier Munesh Chand’s evidence was evasive and therefore in the absence of independent or corroborative evidence, I am unable to accept the evidence of Munesh Chand as being sufficient to prove these two claims. For the foregoing reasons, I determine that the defendant has not submitted any proof that variations were carried out or the variations were approved or the plaintiff had agreed to the payments for these two alleged extra works in terms of the agreement. 

[30]	Accordingly, I dismiss defendant’s claims at item (a) and (b) of the counter claim. 

Counter claim for $30,000.00 under paragraph 23 of the statement of Defence. 

[31]	This claim related to the works that had to be carried out for stage 9; completion of ceiling and panels; and joinery painting and finishing, totaling to $30,000 which formed as balance payment agreed in the ‘Progress Payment Schedule’ attached at page 4 of the agreement. (parties agreed payment at $60,000 for stage 9). Kacimaiwai Engineers in ABOD 6 approved $30,000 as part payment for stage 9. The defendant admitted receiving only $30,000 and therefore claimed the balance $30,000 under this cause of action. 

[32]	Kacimaiwai Engineers in ABOD 6 recommending the payment of $30,000, especially stated that, “The balance of this stage ($30,000) to be paid at completion of all ‘Stage 9’ works”. 

[33]	Munesh Chand, in his evidence simply informed court that the defendant had not received the balance payment for stage 9. The defendant did not submit any evidence to demonstrate whether the balance work in ‘Stage 9’ were carried out or completed. Nor did the defendant produce a copy of a progress claim certificate in terms of clause vii (3) of the agreement. 

[34]	I am not convinced that the defendant has proved the aforesaid claim on a balance of probability as required under the law. 

[35]	Accordingly, I dismiss the defendant’s claims at item (c) of the counter claim. 

COUNTER CLAIM FOR $42,000.00 UNDER PARAGRAPH 24 OF THE STATEMENT OF DEFENCE – WRONGFUL TERMINATION 

[36]	At the trial Mr Shah moved to limit the counter claim at paragraph (d) to $42,000. 

[37]	Paragraph 24 of the Statement of Defence sets out the basis for this claim which read thus;

‘On the 3rd of April, 2007 (sic) the plaintiff wrongfully and in breach of the written and (partly) oral agreement terminated the building contract thereby depriving the plaintiff of a balance contractual sum of $72,000’.

[38]	Admittedly, the contractual period of the Agreement was 9 months commencing from 7 November 2005. The practical completion was scheduled for 28 July 2006. The agreement does not provide for time extensions and, in fact, had specific provisions for liquidated damages for delays beyond the completion date where the parties had agreed at $250 per day. 

[39]	The plaintiff in the statement of claim at paragraph 7 alleged that following works remained pending as at July 2006, viz the completion date.

a.	External site works
b.	External building works
c.	Internal building works 
d.	Entry foyer
e.	Apartment 1 – laundry rooms, lounge/dining & kitchens, bathrooms, bedroom and railings.
f.	Apartment 2 – laundry rooms, lounge/dining & kitchens, bathrooms and railings. 

[40]	The defendant in the statement of defence rejected the allegations and further asserted that the balance work only consisted of kitchen bench for four units, gate installation, and paint touch up.

[41]	The two inspection reports, ABOD 7 and 8 dated 20 September 2006 and 20 March 2007 respectively are evidence of the outstanding works as at those days. The allege termination letter (ABOD 9) was sent on 3 April 2007, just two weeks after the engineer’s report, ABOD 8. Both these two inspection reports, ABOD 7 and 8 were tendered in court as part of the agreed bundle. The defence witnesses did not dispute these two documents in his evidence. I have no reason to doubt their creation. I am satisfied, that the two reports are genuine. 

[42]	The alleged outstanding works listed in the statement of claim by the plaintiff is, as at July 2006. Since then the defendant continued to be at the site for another 9 months or so. Undoubtedly, some work would have been completed during that time. The defendant’s evidence stated that when the agreement was terminated, the defendant had to carry out only the outstanding works stated in the statement of defence. This is a lump sum contract. If the defendant disputes the outstanding works detailed in the inspection report in ABOD 8 the evidential burden is with the defendant to establish that the inspection report ABOD 8 was erroneous. The defendant did not produce any evidence to such effect. I therefore determine that, as at the alleged date of termination, the defendant had to carry out the works as listed in the inspection report at ABOD 8. 

[43]	Evidence was not led to demonstrate what followed consequent to obtaining the inspection reports, except the production of ABOD 9. However, considering the circumstances of the facts, it would be safe for this court to infer that the alleged termination at ABOD 9 was sequel to obtaining the detail report in ABOD 8.

[44]	 I will now examine the legal effect of ABOD 9, letter dated the 3 April 2007, which was written almost after 9 months after the agreed completion date. I have reproduced ABOD 9 below:

3rd April 2007
The Director
M.Chand Construction
Drasa, Vitogo
LAUTOKA

Attention: Mr Muni Chand

Dear Sir

RE: TERMINATION OF ARTICLES OF AGREEMENT

We act for Mr & Mrs Felecia Tungi.

We are instructed that you entered into an Agreement with our client to construct a 8 Unit, 2 storeyed apartment at lot 17 Fasa Subdivision, Namaka, Nadi.

According to the said Agreement the contract period shall be 9 (Nine) months commencing on Monday 07 November 2005 with the Practical Completion scheduled for Friday 28th July, 2006. We are instructed that the construction work is now 9 (Nine) months late and you have failed to take effective actions to bring such construction work update. You have failed to inform our client the reason of such delay.

We are also instructed that you failed to comply with the building plan/drawing and specification as per approved plan. Since our client arrived to inspect the building there was no worker on the construction site.

In view of the above we are instructed to give you notice that due to the serious breach of the Articles of Agreement dated 4th November 2005(the said Agreement) by you and your company, our client has terminated the said Articles of Agreement forthwith.

We are further instructed to demand from you liquidated damages for delays at $250.00 per day pursuant to Clause (vi) of the said Agreement particulars of which are as follows:

Month of August 2006	-	$7750.00
Month of September 2006	-	$7500.00
Month of October 2006	-	$7750.00
Month of November 2006	-	$7500.00
Month of December 2006	-	$7750.00
Month of January 2007	-	$7750.00
Month of February 2007	-	$7000.00
Month of March 2007	-	$7750.00
Total Amount due and owing:	$53000.00

Our client has incurred further financial loss and unnecessary expenses due to your breach of the said Agreement.

You are advised that our client will employ another builder to continue and complete the construction of the building. You shall not in any way do any damage on the adjoining land or buildings and prevent your workmen, agent or servant from trespassing on to our client’s property.

Take further notice that if you fail to pay the said sum of $53000.00(Fifty Three Thousand Dollars) being liquidated damages for delay within 14 days from the date of this letter, we have instructions to institute legal proceedings against you in which case you are liable to pay further cost.

Yours faithfully

PILLAI NAIDU & ASSOCIATES (Signed)

[45]	The defendant then by letter of 12 April 2007 requested 14 days to reply ABOD 9 in detail. However, such a reply was not produced before me or was not included in the agreed bundle of documents. The writ of summons was filed thereafter on 3 May 2007. For the first time the defendant took up a defence of wrongful termination only in the Statement of Defence which was filed on 30 July 2007. 

[46]	Before analyzing the legality of this alleged termination letter- ABOD 9, let me first examine clause vii (15), which appears to have caused some perplexity regarding the 3-day notice stated therein. 

Clause vii (15) which reads:

‘If the Builder shall in any manner delay or neglect completely to finish the said works within the time prescribed for the purpose aforesaid it shall be lawful for the Owner by giving 3 days notice to require the Builder to proceed with such works and on its failing to do so accordingly the owner will employ any other builder to continue and complete the said works according to the said Plans and to authorize the other to use any plant, material and property of the first Builder upon the site and the first Builder shall in such case forfeit and forego all its interest whatsoever under this contract’.

[47]	It is palpable from the above, that the defendant was required to complete the works within 9 months, failure of which, required the plaintiff to give the defendant 3-days notice to rectify the defects. The most cogent interpretation that could be given to the words ‘3-day notice’ is that within 3 days the defendant had to commence the outstanding works and complete it within a reasonable period. It is a well-established principle in building contracts that the right to treat the contract as being repudiated under a forfeiture clause, must necessarily be unqualified and made within a reasonable time and with notice. In the instant case, if the defendant failed to comply with the forfeiture notice, the plaintiff was then entitled to use another builder and the defendant had agreed to forfeiture and to forgo all interests whatsoever.

[48]	Clearly, ABOD 9 did not provide the 3-day notice envisioned in clause vii (15) of the agreement. Ex facie the notice at ABOD 9 was in breach of Clause vii (15) viz breach of the forfeiture notice. However, even if a valid forfeiture notice was given, such forfeiture notice does not ipso facto amount to a notice of termination. A notice of termination is independent to a notice of forfeiture. 

[49]	The plaintiff in the supplementary submissions argued that this was a contract where ‘time is of essence’ and drew my attention to the following judgments:

•	In Union Eagle Ltd. v. Golden Achievement Ltd. - 1997 2 ALL ER 215. The Privy Council concluded that requirements of certainty in commercial transactions dictated that in the absence of a waiver or estoppel courts would hold parties to their bargains

•	Similar views were expressed by Sir R. Malins V.C. in Webb v. Hughes LR 10 Eq. 281 at 287 as follows:

"But if time be made the essence of the contract, that may be waived by the conduct of the purchaser; and if the time is once allowed to pass, and the parties go on negotiating for completion, then time is no longer of the essence of the contract."

•	Marlins J. went on to add that the parties need not wait indefinitely and if it becomes apparent that they have to wait indefinitely, a party can give a reasonable notice and fix a time for completion. [ Cited by Jitend Singh J in Tradeplus (Fiji) Ltd vs Chand [2004] FJHC; HBC 065 of 2004 (5 July 2004)

[50]	 The parties had explicitly agreed that the contract period was 9 months. At the expiration of the contractual period of nine months, the plaintiff could have terminated the contract. Instead, the plaintiff elected (by his conduct) to permit the defendant to be at the site. In fact, the defendant was at the site for 18 months for a 9-month contract. It is therefore apparent that time was 'not of essence' in this contact. Nor does the agreement specify that 'time is of essence'. The agreement also provides for liquidated damages for each belated day at $250, without a cap on the period. These factors can only be construed as 'time was not of essence' and in fact the plaintiff waived his right to terminate the agreement at the end of the 9 months -contractual period.

REMEDIES FOR WRONGFUL FORFEITURE

[51]	The statement of defence is based on 'wrongful termination' and not 'wrongful forfeiture.' However having considered the agreement, it is evident that ABOD 9 was erroneously termed by the defendant as wrongful termination. I therefore continue with my reasoning based on 'wrongful forfeiture'.

[52]	Hudson's Building and Engineering Contracts (Tenth Edition) at page 710 to 711 states:

'Generally, the measure of damages in the case of a wrongful forfeiture falls to be determined by the ordinary common law rules…..'

'The right of the appellant (the contractor) would be to recover such amount of damages as would put him in as nearly as possible the same position as if no such wrong had been committed – that is, not as if there had been no contract, but as if he had been allowed to complete the contract without interruption…..'

'But the builder is not restricted to suing for damages for breach of contract. He may, as an alternative, where he has elected to treat the contract as rescinded, sue upon a quantum meruit. This will enable him to seek to establish, if he can, that the contract rates were low or uneconomical'.

[53]	The defendant states that all works under the contract was satisfactorily carried out and the balance work constituted only the extra works on variations which were requested to be done by the plaintiff. The $42,000 claimed in paragraph 24 of the statement of defence is based on quantum meruit, i.e. for the works carried out for stage 10 and the retention money for stage 11. The works in stage 10 are not extra work. The defendant has not submitted any progress claims or any documents or evidence to prove that the stage 10 works were completed. I am therefore unable to determine that the defendant is entitled to payments for stage 10 on quantum meriut. In my view, this part of the claim is in conflict with the evidence. 

[54]	However, I find the defendant is entitled to some parts of the retention claim in stage 11, agreed at $22,000, which is 5% of the total contract sum of $ 440,000.00. The retention payments are held as a security to rectify defects during the warranty period. The plaintiff has not adduced any evidence that the defendant should not be entitled for the retention money for stages 1 to 8. In fact, the defendant admits that it had been paid for the work carried out for that period. After deducting 5% each for stages 9 and 10, which amounts to $3000 and $1000 respectively, I determine the defendant is entitled to the balance retention money for stages 1 to 8 which amounts to $ 18,000.00. 
 
[55]	Accordingly, I determine that the forfeiture is wrongful, and the defendant is entitled to part of the retention money for stage 11, which I assess as $18,000. 

AGREED BUNDLE OF DOCUMENTS 

[56]	Mr Shah in his submissions took up an interesting point of law, i.e. the two inspection reports, ABOD 7 and 8, which form part of the agreed bundle of documents (ABOD) have not been formally tendered into evidence, and therefore this court should not consider the two reports. Effectively, I therefore cannot even begin to consider whether the two reports have any evidential or probative value. To determine this issue I will first examine the procedural and the legal basis of an ABOD. 

[57]	In the UK, it was the practice for many years for solicitors to compile an ABOD at around inspection stage. This practice apparently flourished under the old English 1988 Supreme Court Rules, upon which, the Fiji's High Court Rules 1988 are based. 

[58]	It appears to me that the practice was premised on a culture that encouraged solicitors to narrow down the area of dispute and agree on many issues before the commencement of the trial. Hence, in their commentary of the old English RSC Rules, O'Hare & Hill in Civil Litigation, Longmans, 5th Edition, at page 434 say as follows:

In practice the position is as much more straightforward than a reading of the rules might at first suggest. Solicitors should always do everything possible to narrow down the area of dispute and agree as much as possible. Thus, it is often agreed that documents should go in evidence and they are prepared in the form of "agreed bundles". The volume of documentation obviously varies from case to case. If the case is relatively straightforward so far as documentation is concerned then one agreed bundle containing all documents would suffice. Where the case is complicated they should be divided into convenient bundles and labeled accordingly, e.g., a bundle of correspondence between the plaintiff and defendant prior to the contract; the second bundle could contain the contractual documents; a third bundle could contain correspondence between the parties after the dispute arose and a fourth bundle correspondence between the parties' solicitors.
It is important to ensure that documents prepared for trial are in a neat and convenient form. Thus after inspection it is usual to agree the documentation and agree how it shall be bundled and then one party's solicitor (usually the plaintiff's) has the task of preparing bundles in the agreed form.

(my emphasis)

[59]	O'Hare & Hill's statement that "solicitors should always narrow down the area of dispute and agree as much as possible" is in fact, a statement of a duty that practitioners owe as officers of the court.

[60]	In Fiji, this duty is part and parcel of the duty imposed on practitioners to take all reasonable steps to avoid unnecessary expense or waste of the Court's time (see Rules 3.1 and 3.2 of the Rules of Professional Conduct and Practice under Fiji's Legal Practitioners Decree 2009). 

[61]	This duty or otherwise, at least the desirability of having issues narrowed down- would appear to be the foundation of the Practice Direction No. 3 of 1986 ("PD No. 3") which I reproduce in full below:

PRACTICE DIRECTION NO. 3 OF 1986.

PRODUCTION OF DOCUMENTS BEFORE COMMENCEMENT OF TRIAL

I am directed to draw the attention of all legal practitioners to the following procedures that is intended to take effect immediately in the civil jurisdiction of the [High Court].

1.	In civil actions it would be of great convenience and assistance to the trial judge to have the opportunity before the trial to read the correspondence and other documents in the case including the reports of medical and other experts which have been agreed between the parties. (my emphasis)

2.	Solicitors should agree upon the documents to be used as soon as possible after directions have been given. The documents should be bundled up and properly paged in chronological order and a copy made for the use of the trial judge and lodged with the chief registrar not less than seven days before the date upon which the trial is set down for hearing. (my emphasis)

3.	Any documents whose admission in evidence is contested may be excluded from the bundle, but a note as to the existence of such document should be made on the agreed bundle.

4.	If before or during a case a document, not included in the agreed bundle, comes into the possession of the solicitor for any party, he should, if he intends to use it, inform his opponent in sufficient time to enable him to object to its use, and advise the court of his intention in this regard.

(Filimone Jitoko)
Chief Registrar

[62]	Without doubt, PD No. 3 complements the provisions in the High Court Rules, which set out the various pre-trial processes that practitioners had to complete before a matter was ready for trial, in particular, Orders 24, 25, 27 and 34, which govern discovery and inspection of documents, summons for directions, admissions and pre-trial conference. There is in fact a common thread in all these Rules. While comprehensive discoveries permit counsel to crystallize the issues between themselves, they are also far better placed to agree on the evidence that could be produced before the trial judge in an ABOD. An ABOD is also justifiable as an appropriate means of reaching agreement as to possible ways of curtailing the duration of the trial thereby curtailing costs and prolong hearings. (see Order 34 rule 2)

[63]	Section 10 of the Civil Evidence Act 27 of 2002, which deals with 'proof of statements contained in documents', stipulates that a court could approve the manner in which documents can be proved. Therefore the PD No 3 read along with O 27 r 4 also justifies the production of ABOD before trial in court. 

[64]	Hence, while the High Court Rules may not expressly require parties to file an ABOD, I am of the view that an ABOD, in fact complements Orders 24, 25, 27 and 34 of the High Court Rules 1988. There is no doubt that ABOD do not derogate from the procedural rules of the High Court Rules. Nor that it could be interpreted to state that the Rules do not require or permit the filing of the ABOD in court. 

[65]	In my mind, consideration of the Orders 24, 25, 27, 34 of the High Court Rules, the Practice Direction 3 of 1986 and section 10 of the Evidence Act echoes that the cumulative effect of all these provisions amounts to achieve efficacious disposal of a trial; justly, cost-effectively, and expeditiously. 

[66]	Having said that, I must also express my view that, as a matter of evidence, placing of an ABOD before a trial judge is no threat to the well-settled principles of practice and procedure pertaining to the tendering of documents, or the admissibility of evidence on challenged documents. The best evidence rule for example remains intact for other documents that are not in an ABOD and where admissibility is challenged. And so do the principles governing the admissibility of secondary evidence - if admissibility is in fact challenged. In addition, the rule that, where the authenticity of a document is challenged, it must then be tendered through its author - is by no means compromised by an ABOD placed before the judge. 

[67]	Therefore filing of ABOD does not in practice undermine in any way the principles that have traditionally guided the court on when and how it should give due weight to the content of documentary material placed before it. Simply, the Court retains the prerogative to determine the probative and evidentiary value of each document in the ABOD even if they are unchallenged by the parties and deemed as admitted.

[68]	In Fiji, it has been the practice for many years that lawyers agree to certain documents at pre-trial stages. These documents are then complied in a bundle and filed in Court.

[69]	 In Smith v Min Sik Pak [2008] FJHC 354; HBC077.2007 (19 December 2008), Master Udit expressed the view that an ABOD is actually a compilation of documents where admissibility and content are not in dispute.

[70]	The above may be stating the ideal. Nevertheless, in my view, the right of a party to cross-examine on the content of any document in an ABOD is sacrosanct, and cannot and should not be compromised merely by virtue of the inclusion of the document in an ABOD. This right is so entrenched so as to justify even a retraction at trial on the part of a party who had earlier agreed at pre-trial stage as to the content of a document, albeit the retraction would require justification on the balance of prejudice. 

[71]	O'Hare & Hill in Civil Litigation (supra) and Master Udit in Smith v Min Sik Pak (supra) suggested the manner in which parties could file documents. Master Udit suggests that an AGREED BUNDLE OF DOCUMENTS could contain all those documents where admissibility and content are not in dispute and a separate bundle marked "REQUIRING CROSS EXAMINATION" where admissibility is not in dispute but only of the contents. He also suggested a third Bundle to contain all documents where both admissibility and content are disputed. ('DISPUTED DOCUMENTS"). I agree that such categorization would be ideal and assist court, especially to prevent duplicate filing of documents in different bundles, which requires burdensome perusal by court. (i.e. the ABOD, plaintiff bundle and defendant bundle)

[72]	The practice direction 3 of 1986, which appears to compliment the spirit of High Court Rules, at paragraph 1, alludes to the necessity of judges reading the court's record before the hearing. To facilitate this requirement, the practitioners are directed to provide the ABOD, one week before the trial. Needless to state that the Judges can consider only the evidence before court. Therefore, the practice direction no doubt infers that the ABOD should form part of the evidence requiring judges to read it before the hearing. Therefore, the practitioners must necessarily separate the documents, which would require cross-examination when filing the ABOD. 

[73]	As stated earlier, ABOD would predominantly have two parts of documents. Firstly, the documents where the authenticity and contents are admitted. Secondly, where the authenticity is admitted but the contents are challenged. Either way these documents forms part and parcel of ABOD that are filed one week before the hearing for judges perusal. Parties complied these documents in an ABOD after due consideration of them. It is therefore my considered view that documents, which form part of agreed bundle of documents, do not require formal proof by tendering through a witness. It is only the disputed documents that do not form part of the ABOD, require formal proof. This process undoubtedly complies with the requirement of efficacious disposal of a trial as envisaged in the High Court Rules. 

ANALYSIS OF ABOD 7 AND ABOD 8 IN THIS CASE

[74]	The Pre-trial conference minutes in the instant case, which are signed by the Solicitors of both parties at paragraph 14, had agreed as follows. 
Documents: Agreed bundle with liberty to cross examine'

[75]	As I have stated earlier the plaintiff withdrew his case. For the purpose of convenience, I marked the agreed bundle of documents' as ABOD 1 to 12. ABDO 13, which consisted of a photograph, was marked and tendered through a witness.

[76]	The defendant did not dispute or challenge ABDO document 1 to 12 at the hearing. As these documents were part of the agreed bundle of documents and their creation was not disputed by the defendant, I admitted them as genuine. Since the contents of those documents were not challenged in cross examination, I also deemed that both parties admit its contents. In my analysis of this judgment, I have already stated the evidentiary value I have placed in them, so I will not further dwell on them, at this stage. 

[77]	 I must state that Mr. Shah did not formally tender the termination letter ( ABOD 9) through his witnesses, which also formed part of the Agreed Bundle of Documents. If so, his case too must fail solely on that point because if I reject ABOD 7 and ABOD 8, I must also reject ABOD 9. Then I do not have a termination letter before me to make a determination. Mr Shah cannot approbate on one part and then reprobate. 

COSTS

[78]	I do not award any costs on the counter claim.

[79]	The plaintiff informed Mr Shah and his client that he will be withdrawing his case only in the morning of the hearing. Mr Shah moved $5000 as cost. This case was fixed only as a one-day trial. The failure of informing the defendant in advance therefore could not have caused any inconvenience or prejudice to the defendant as the defence would have had to be prepared to meet the defence and the counter claim the same day. I therefore do not award any cost. However, I must state that legal profession has many traditions. Those traditions and common courtesy required either the plaintiff or his counsel to inform the defendant or his counsel of the withdrawal. In this modern age there are ample convenient commutation methods which can be used for such purpose. 

ORDERS

(a)	The counter claim for $15,000 under paragraph 21 (i) is dismissed.
(b)	The counter claim for $ 6,500 under paragraph 21 (ii) is dismissed.
(c)	The counter claim for $30,000 under paragraph 23 is dismissed.
(d)	The defendant to be paid $18,000 (eighteen thousand) on the counter claim under paragraph 24 within 21 days hereof. 
(e)	No order for costs. 

……………………………………………………
Ms Dilrukshi Dias Wickramasinghe
Judge