Supreme Court
Action No. 107 of 1978
15th July 1982
Moe, CJ

Mr. Denys Barrow for the Plaintiff
Mr. Wilfred Elrington for the Defendant

Contract - Breach of Contract - Repudiation of agreement - Damages - Evidence - Question of fact - Failure to complete contract within a reasonable time is not repudiation - Time was not of essence of the contract - Claim for breach of contract fails.

J U D G M E N T

On July 7th 1977 the plaintiff and defendant entered into an agreement as follows: -

"The following is to certify that agreement has this day July 7th 1977 been reached between Mr. Bernard Mahung (owner) on the one hand and Karl Burke (contractor) on the other to erect an upper flat building on existing building size being 24 x 32 inside measurement; structure to be of reinforced concrete and 8 x 8 x 16 concrete blocks according to plan submitted with agreed alteration complete with septic and painting. Owner to supply all required materials on site and contractor responsible for materials supplied and labour.

"The agreed cost of labour is FOUR THOUSAND FIVE HUNDRED DOLLARS ($4,500.00) Belize currency, same amount to be paid as follows: Advance (as the law specifies) the amount of seven hundred dollars; then on the Friday of the third week after commencement Two hundred and fifty dollars, thereafter, as requested by contractor taking into consideration the amount of production."

The plaintiff claims that the defendant proceeded to erect the four walls and roof for the upper flat but on the 27th February 1978 ceased to do any further work and thereby repudiated the above agreement which repudiation the plaintiff accepted by letter dated 16th May, 1978. He also claims that the defendant failed to apply certain materials to the said agreement, has not returned them and has lost his building plan. He now seeks damages for the expense incurred in employing another builder to complete the building and for the inconvenience, trouble and loss he has suffered. The defendant denied that he repudiated the contract and avers that he was prevented by the plaintiff from completing the work. He also denied failure to apply the materials as alleged.

The evidence is that work under the agreement commenced about the 15th July 1977 i.e. about one week after the agreement was signed. The plaintiff says work stopped on 27th February 1978 whereas the defendant maintained that he worked on the building until May 1978. On this aspect of the matter I found the defendant's account more reliable. He gave the impression that he recalled events quite clearly and his evidence on this was more specific and definite than the plaintiff. On the other hand the plaintiff did not appear to be clear as to what transpired in this regard. His demeanour suggested that he was either not recalling exactly what transpired or was reluctant to cede that the defendant was in fact still working on the building beyond the period he had pleaded. And there is evidence to which I refer in more detail shortly that a misunderstanding about the erection of the building had been going on until about May 18th when the plaintiff changed the locks on the doors to the building at which time the defendant's tools were still in the building. I accepted the defendant's evidence that he was still working on the building as at May 9th, 1978.

I found that before that date i.e. 9th May 1978, there had arisen some dispute between the parties about the erection of the building. The plaintiff approached the defendant on more than one occasion about finishing the building. He couldn't recall how many times he did so no what defendant replied but said merely that the defendant's response seemed unfavourable. By a personal letter dated 16th May 1978 the plaintiff gave the defendant one week within which to come to an amicable solution about the misunderstanding concerning the erection of the house failing which he would take legal action. In response thereto, the defendant told the plaintiff that it had been his desire to do so since November 1977 and was still anxious to do so whereas the plaintiff had chosen to resort to "slander, intimidation, verbal abuse, defamatory remarks and threats." Before he had received this letter from the plaintiff, the defendant has consulted a lawyer who on the said 16th May wrote to the plaintiff stating "Mr. Burke has informed me that because he was unable to conclude the construction of a house he had undertaken to build for you, you have deliberately embarked on a campaign to besmirch has character." The plaintiff's lawyer also in a letter dated May 16th to the defendant stated that from July 1977 to that date was more than a reasonable time within which to complete the contract. That because of the defendant's excessive delay and obvious repudiation of the contract, the plaintiff was entitled to treat the contract as at an end. He also forbade the defendant from going on the premises for any purpose whatever and demanded a return of the house keys.

I turn now to determine whether the defendant can be held to be in breach of the contract. There was not time stipulated in the agreement for completion of the contract. Agreement to complete within a reasonable time is therefore to be inferred. What was a reasonable time is a question of fact for my decision. This was a difficult decision to make. There was little to go on as to the time to be regarded as normal within which to build such a structure in Belize. There was evidence from the defendant that if he could have finished about two months after January 1978, i.e. about end of March or about 8 months for the job. There was evidence from the plaintiff which suggests the other building contractor took from about mid November 1978 to mid March 1979 about 4 months to finish what was left to be done. If I were to base my judgment on what I have seen in Belize, taking 10 months i.e. from July 1977 to May 1978 to erect the structure is not necessarily unreasonable and the portion of evidence just referred to tends to confirm this. In this case I have to take into account that the structure was to be reinforced concrete and cement blocks but there was no water on the site which thus necessitated spending much time daily in drawing if from elsewhere and putting it in a container before certain work could be done. There is no evidence that water was ever run on to the site during the time the defendant was working on the building. Further the defendant when he needed materials had to seek transportation and along with his employees collect the materials from the plaintiff's mother's residence and bring them to the site. I also took into account that the amount paid for the labour was extremely low. This would certainly have a bearing on the amount of workers employed and consequently the speed of production. The plaintiff's own witness, a contractor whom he employed to finish the work after he had shut out the defendant said that at the relevant time if he had been given the job from start he would have charged thirteen to fourteen thousand dollars. He said it was not reasonable to build such a house for $4,500 and it would be very hard to build it for that amount. Indeed the witness charged $7,300 to finish the work and with that added to the $4,500 paid as the defendant's agreement called for, the plaintiff still got his building for about a quarter less than what should have been properly charged from the start. The plaintiff could not reasonably expect for $4,500 the result i.e. the production for which he should have paid $14,000.00. The plaintiff was getting a job "dirt cheap" from the defendant and the defendant was labouring under trying circumstances. The bargain doesn't appear to have been fair and reasonable. Taking all the above factors into account I would hold that as at 16th May 1978 the defendant being still at work on the building was not unreasonable, and thus was not in breach of this contract.

I however do not rest there. Even if I am wrong and the defendant as at May 16th 1978 had in fact exceeded what may be properly regarded as a reasonable time within which he ought to have finished the building and was thereby guilty of delay, the question which then arises is whether the defendant can be held to have thereby repudiated the contract or was guilty of a breach entitling the plaintiff to treat the contract as at an end.

In Cheshire & Fifoot on Contract (4th edition) at p. 485, it is stated "A breach of contract is a cause of discharge only if its effect is to render it purposeless for the innocent party to proceed further with performance. Further performance is rendered purposeless if on party, either shows an intention no longer to be bound by the contract or breaks some stipulation so essential to the continuance of the contractual tie that the very foundation of the contract is discharged." and at p. 486 "Repudiation of a contract is a serious matter, not to be lightly found or inferred" and it is pointed out that the question whether the inference is justified is one of fact dependent upon the nature of the default and the circumstances in which it was made.

I do not think that an intention by the defendant to repudiate the contract could be inferred from his failure to complete within a reasonable time. The evidence which I accepted is that the defendant was trying valiantly to keep his part of the bargain. By November 1977 the defendant has used up $4,450.00 and sought loans from the plaintiff to assist him in completing the job. He only raised $300.00. When the money ran out, he lessened his work force, worked on the building three days a week and two elsewhere or 2 on the building and 3 elsewhere to keep things going and eventually worked on it by himself. But although there is not intention to repudiate a contract, it is still discharged if the breach is so fundamental as to destroy the foundation of the contract. Did the defendant's failure to complete the building within a reasonable time go to the root of the contract? In this case, time was not of the essence of the contract and therefore non-completion of the contract by the defendant within a reasonable time did not release the plaintiff from the contract.

In the circumstances I think the right of the plaintiff would be as stated by Singleton L.J. in Charles Rickards Ltd., v. Oppenheim [1950] 1 A.E.R. 420. He said "If a person wants something done and that which he has contracted to have done is not done within a reasonable time ---- he has the right in the circumstances to say "Well, I will not have unless you deliver it within a certain length of time" and states a reasonable time". What was necessary after the reasonable period for completion had expired was letter to the defendant stating that from thereon time was being regarded by the plaintiff as essential to the contract and giving the defendant a reasonable time within which to comply. Rather than that what was sent to the defendant was letter treating the contract at an end and prohibiting the defendant from doing any further work on the house. As Harman J. said in Smith v. Hamilton [1950] 2 A.E.R. at p. 933, "If time to be not initially of the essence of the contract, one party cannot, by his own motion, make it so."

In the result I would not find that the defendant repudiated the contract or was guilty of a breach entitling the plaintiff to regard the contract between them as at an end. The plaintiff's claim for damages for repudiation and breach of contract fails.

I am not satisfied that the defendant lost the plan nor that he is to be blamed for the absence of a length of galvanized pipe, part of the materials claimed to be lost. The defendant has admitted he has fluorescent light value $16.00 belonging to the plaintiff. He is to pay the plaintiff for it. Judgment accordingly. Defendant to have his costs.

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