The Court of Appeal has ordered CEPEP Contractor Eastman Enterprises Limited to pay CEPEP’s legal costs in their recently concluded appeal, in which the Court ruled that the Contractor was wrong to bypass the Alternative Dispute Resolution clause in the contract by filing a claim in the Courts.
The Court previously condemned the Contractor’s conduct in attempting to bypass the contract. According to the Court, “The parties having agreed to dispute resolution prior to approaching the courts, on issues arising out of the contract. It defeated the very purpose of that procedure to ignore and bypass the process which had been designed to attempt to resolve disputes by instead immediately approaching the court.”
Mr. Larry Lalla SC, who appeared for the CEPEP Contractor, together with Kareem Marcelle and St. Clair Michael O’Neil, argued that the Court should make no orders as to costs and that each party should be made to bear its own costs because the Court of Appeal found that the trial judge erred in referring the matter to the DPP.
The Court, however, rejected in a unanimous judgment (Rajkumar, Aboud, Rahim JJA) in the Court of Appeal rejected this argument and upheld CEPEP’s legal submissions that this issue was a minor part of the appeal that did not justify any substantial judgment on costs. The Court said:
“[5] The referral issue however, did not account for a substantial part of the trial judge’s reasons for granting the stay application. That application for a stay was granted primarily on the basis of the law as to the circumstances in which Alternative Dispute Resolution clauses could constitute a necessary condition precedent to litigation. In this Court, that argument also occupied the majority of the submissions and the oral arguments. The referral to the DPP was not a relief sought by the respondent before the trial judge. There is no basis therefore for altering or modifying the order for costs made by the trial judge in the Court below because the respondent was successful on the issues that it had raised.
[6] In the Court of Appeal the referral issue arose in the context of the trial judge’s exercise of discretion, at that stage, to order the referral of documents to the DPP. The conclusion of this Court was that that referral, on the stay application, on untested evidence, without affording necessary parties the opportunity to respond, was premature. The trial judge having made that referral, the respondent on appeal argued in favour of upholding it.
[7] The determination of the referral issue did not affect the main bases of the stay application, or the issue that was ultimately determined by the Trial Judge and by this Court in favour of the respondent.”
The Court further stated that the referral to the DPP was “not a significant aspect of the appeal” (paragraph 8), as reflected by the fact that it did not occupy any real time during the hearing of the appeal:
“[9] In no way can it be said that this accounted for any significant portion of the resources expended on this appeal, either with respect to written submissions or oral arguments as reflected in their product – the judgment of this Court itself. However, as confirmed by counsel to the Court, it did constitute a separate issue on appeal and a separate event, on which the respondent was not successful.
[10] In those circumstances there is no reason i] to depart from the usual order that costs follow the event, and ii] to recognize that the successful party on appeal, who would be entitled to costs on the main issue or event, was the respondent. That was because the appellant was not successful in reversing the order of the Trial Judge staying the proceedings.”
The Court therefore made the usual order that the losing party pay CEPEP two-thirds of its legal costs, but made a minor discount of 20% to cater for the reversal of the reference to the DPP.
CEPEP therefore, calls upon Contractors to abide by the terms of their contracts with CEPEP and is committed to upholding the rule of law in relation to its conduct of business.
CEPEP wishes to thank its legal team from Freedom Law Chambers, led by Mr. Anand Ramlogan SC, for their dedication and hard work in this matter.