Derek Achong
A contracting company has succeeded in its legal battle with another company over a failed $16 million land deal.
Delivering a judgement yesterday morning, High Court Judge Frank Seepersad upheld Mootilal Ramhit and Sons Contracting Limited’s lawsuit against API Pipeline Construction Company Limited over the return of a ten per cent deposit paid before the deal collapsed.
According to evidence in the case, in 2017 Mootilal Ramhit and Sons entered into an agreement with API to purchase its interest in three lots of land leased from La Brea Industrial Development Company Limited (LABIDCO).
In November 2017, Mootilal Ramhit and Sons accepted a request from API that the deadline for closing the deal be extended to March 2018 as there was a delay in obtaining LABIDCO’s consent. Almost two weeks before the extended deadline elapsed, API sought a second extension to November 2018.
Mootilal Ramhit and Sons eventually requested that its deposit be returned as it no longer wanted to pursue the deal. API refused the request as it claimed Mootilal Ramhit and Sons had orally accepted the second extension.
In the lawsuit, Justice Seepersad had to consider whether the second extension was valid as the contract between the companies stated that its terms could not be amended without the expressed written agreement.
He noted that while such modification clauses aid and enable commercial certainty, some degree of flexibility is required. He stated that oral modifications are not valid unless the party claiming such can produce cogent and compelling evidence that they agreed and acted upon the same.
“The evidence must also demonstrate that the reliance upon the altered consensus position was so manifest that it would be unconscionable to permit any party to resile from the agreed position,” Justice Seepersad said.
In analysing the communication between officials of both companies, Justice Seepersad noted that Mootilal Ramhit and Sons never consented to the second extension.
“The defendant has not rebutted the presumption against the invalidity of any oral modification of the agreement,” he said.
He also criticised API for its conduct in the case, as he noted that it proceeded to push through the sale when it had an ongoing dispute with LABIDCO about overdue rent, which caused the delay.
“The defendant ought not to benefit or seek to obtain an advantage from his own wrongful conduct especially where that conduct directly hindered its fulfilment of the requirements under the agreement,” he said.
Stating that API’s position was disingenuous and devoid of merit, Justice Seepersad noted that it sought to use the judicial process to delay repaying the deposit as required.
“The mantra ‘do the right thing’ has seemingly been replaced by, ‘delay deflect and deceive’,” Justice Seepersad said.
Mootilal Ramhit and Sons was represented by Jagdeo Singh and Karina Singh, while Ronnie Bissessar and Varin Gopaul-Gosine represented API.
