Vijay Construction (Pty) Ltd v Eastern European Engineering Limited (CC 17 of 2016) [2024] SCSC 119 (26 July 2024)

BURHAN J

1. The Plaintiff Vijay Construction (Proprietary) Limited (VIJAY) filed an amended plaint dated 4 July 2022 against the Defendant Eastern European Engineering Limited (EEEL) setting out the loss given below and seeking the following reliefs as per paragraph 7 of the plaint:

“The Plaintiff avers that the Defendant must make good its loss, which it values at USD1,016,789.48

PARTICULARS OF LOSS

• Rent form 1 September 2012 until 30 April 2016      =         USD 828,564.00
• Interest on overdue rent at 1% per month                 =         USD 188,225.48
• Compensation for forceful acquisition                      =         USD 50,000.00

Whereof the Plaintiff prays to this Honourable Court to enter Judgment in favour of the Plaintiff in the total sum of USD 1,016,789.48 with rent at USD 18,831.00 per month from 1^st May 2016 and interest accruing until the return of the buildings to the Plaintiff, with interest and costs.”

2. It is averred in the plaint that the Plaintiff was a company registered in Seychelles carrying on trade as a building and civil contractor and the Defendant was a company registered in Seychelles promoting the construction of the Savoy Resort and Spa Beau Vallon, Mahe. The Defendant engaged the Plaintiff to construct the said Savoy Resort and Spa and entered into several agreements in respect of same. On or about February 2012, in pursuance of the said agreements, the Plaintiff erected temporary buildings on the site of the said Savoy Resort and Spa to assist in the construction of the said Savoy Resort and Spa.
3. However, the said contracts were prematurely terminated by the Defendant in April and July 2012, and the said temporary buildings on the site of the said Savoy Resort and Spa, and their contents, were forcibly detained by the Defendant in September 2012. By a judgment of the Court of Appeal SCA 10/2024 dated 25 April 2016, it was held that the beneficial owner of the said buildings and their contents was the Plaintiff. It is further averred that the said buildings remain in the possession of the Defendant, despite the demands from the Plaintiff that these be returned and the Plaintiff be indemnified for their loss.
4. Learned Counsel for the Defendant on 4 July 2022 informed the Court that the Defendant would be maintaining the amended defence filed on 9 May 2019. The Defendant in the amended defence took up the following pleas in limini litis:

1. The Supreme Court has no jurisdiction in that pursuant to the Agreements between the Parties, any dispute arising under or from the Agreements should be finally settled by arbitration under the Rules of Arbitration of the International Chamber of Commerce (ICC), and that the place of arbitration should be Paris, France.
2. The Plaint is res judicata in that the dispute has been finally settled by Arbitration in accordance with the several Agreements between the parties in the Final Award of the Arbitrator;

5. It is also admitted in the defence that the Defendant engaged the Plaintiff to construct the said Savoy Resort and Spa and entered into several agreements in respect of same. On or about February 2012, in pursuance of the said agreements, the Plaintiff erected temporary buildings on the site of the said Savoy Resort and Spa to assist in the construction of the said resort. The Defendant states that the temporary buildings erected had been paid for by the Defendant and the contracts referred to by the Plaintiff had been terminated as the Plaintiff had been in breach of the conditions set out in the contract. The Defendant admits that the Court of Appeal ruled that the beneficial owner of the said buildings was the Plaintiff. It is denied that the Plaintiff has made demands for the said buildings to be returned and that the Plaintiff be indemnified for their loss. The Defendant further denies entering into any rental agreements with the Plaintiff in respect of the temporary buildings.
6. According to the ‘Statement of Agreed Facts and Documents’ submitted by the parties, dated 25 January 2023, it is admitted by both parties that the Plaintiff and the Defendant entered into agreements for the construction of the hotel project known as the Savoy Resort and Spa Hotel at Beau Vallon, Mahe. Clause 20 of each agreement provided that any dispute arising under or from the agreement should be finally settled by arbitration under the Rules of Arbitration of the International Chamber of Commerce (“ICC”), and that the place of arbitration should be Paris, France. In the course of the performance of the agreements, disputes arose between the parties, resulting in the termination of all the agreements by EEEL. On 12 September 2012, the disputes were referred to arbitration in Paris under the Arbitration Rules of the ICC. The arbitral tribunal delivered its final award on the disputes on 14 November 2014. Among the orders granted by the arbitral tribunal, the relevant one to the dispute before this Court, is the order that EEEL pays the sum of EURO126,000.00, being damages arising from EEEL's temporary occupation of the buildings, with interest at the rate of 8% per annum.
7. Thereafter, VIJAY applied to the Paris Court of Appeal in France to set aside the award. The application was dismissed on 28 June 2016, and VIJAY filed a notice of appeal to the Court of Cassation in France but did not pursue the said appeal, resulting in its dismissal. EEEL brought a case against VIJAY in the Supreme Court of Seychelles in CC15/2013 claiming, inter alia, ownership of the worker's accommodation, which was dismissed by the Supreme Court on 24 February 2014. The appeal of the said decision was dismissed by the Seychelles Court of Appeal in SCA 10/2014 on 22 April 2016.

Analysis and Determination

8. I have considered the evidence led by both parties, the submissions and counter submissions, and documents filed in this case. I will first consider and analyse the submissions of both parties in respect of the pleas in limine litis. The Defendant raises issues of Jurisdiction and Res Judicata. With regards to Jurisdiction, the Defendant submits that the Supreme Court has no jurisdiction as pursuant to the agreements between the parties, any dispute arising under or from the agreements should be finally settled by arbitration under the Rules of Arbitration of the ICC and that the place of arbitration should be Paris, France (as per Clause 20 of the Agreements). The Defendant submitted that it is uncontroverted that the dispute regarding the temporary buildings, which is the cause of action of the present suit, is subject to Clause 20 of all six agreements, the subject of an arbitration agreement. The Defendant submitted that under paragraph 1 of Article 113 of the Commercial Code: "The Court seized of a dispute which is the subject of an arbitration agreement shall, at the request of either party, declare that it has no jurisdiction, unless, in so far as the dispute is concerned, the agreement is not valid or has terminated".
9. It is the contention of the Plaintiff that the current claim arises from the breach by the Defendant of an obligation arising after the delivery of the award. It is an action that is arising as the Defendant continued to hold on to the buildings after the arbitral award was given. This act has given rise to a cause of action based on rent, after the arbitral award was given and based on delict and not arising from the breach of contract. Having given due consideration to the submissions of both learned Counsel and the case law referred to herein I am of the view that the Plaintiff is not precluded from filing an action based on delict in respect of a cause of action that arises after and outside the scope of the award.  Further, Article 1370(3)(a) of the Civil Code allows a party which has a claim in contract or delict to opt which cause of action to pursue and that the Court of Appeal in Machinery and Equipment Limited v Cousine Island Co. Ltd (SCA 18 of 2021) [2023] SCCA 13 (26 April 2023) emphasized this choice. The Plaintiff submits that it has chosen to pursue its action in delict and is free to do so but has to establish that the cause of action arose after the award was made.
10. Although the Plaintiff states that his current claim arises from the breach by the Defendant of an obligation arising after the delivery of the award, it is clear from the prayer of the amended plaint filed by the Plaintiff that he is claiming “Rent form 1 September 2012 until 30 April 2016”, interest and compensation for forcible occupation of the said temporary buildings during this period. It would be pertinent at this stage to draw attention to paragraph 298 of the arbitral award P9 which has already granted the Plaintiff rent in the sum of US $12,500.00 per month for 20 months from the end of September 2012, when the Plaintiff left the site, until the date when Savoy resort opened, namely May 2014. Therefore, it is the view of this Court that the Plaintiff’s claim for the period 1^st September 2012 till May 2014 is untenable and unsustainable as it has already been subject to an arbitration award between the same parties and having received an award based on contract, the Plaintiff is precluded from re-litigating that part of the claim by ways of a delictual action between the same parties.  In Machinery and Equipment Limited v Cousine Island Co. Ltd (SCA 18 of 2021) [2023] SCCA 13 (26 April 2023) it was held that Article 1370(3) of 2020 Code (i) does not bar simultaneous claims under breach of contract and delict, it bars consecutive claims or actions which give the Plaintiff opportunity to simultaneously enjoy remedies accruing from both contract and delict; (ii) the principle of non cumul de responsabilite is no longer part of the law of Seychelles; and (iii) the law in Seychelles is to the effect that claims in both delict and contract can be pursued in the same plaint as long as one of them is pleaded in the alternative (Emphasis added).
11. For the aforementioned reasons, this Court cannot grant any relief in respect of the claim between the period 1 September 2012 and May 2014, which is included in the particulars of loss of the plaint as this period has already been included in the arbitral award.
12. The Plaintiff in its submissions states that the period of his claim for rent is with effect from December 2014 (the month after the Arbitral Award was rendered). Since the first contract is dated 15 April 2011, and the temporary buildings would have been erected about then, the rent would run until April 2021, a period of 10 years which was the lifespan of the temporary buildings given by the Plaintiff’s expert witness Mr Eric Frank. Therefore, the Plaintiff’s claim is for the period December 2014 to April 2021 covering a period of 75 months, making the total rent due US$1,412,325.00. The Plaintiff submits that this is the sum to compensate the Plaintiff and to penalize the Defendant for its fault. Even though, the Plaintiff explained in his submissions that the claim is actually from the date of the award, November 2014, and not September 2012, such argument is not in accordance with the particulars of loss in the plaint.
13. Upon perusal of the amended plaint, submissions of the parties and annexed agreed documents, this Court comes to the following determinations. The Particulars of Loss in the Amended Plaint state that the Plaintiff is claiming the amount of USD 828,564 as “Rent form 1 September 2012 until 30 April 2016” (in the initial Plaint – “Rent from 1 September 2012 until 30 April 2016”). The particularized period does not align with the Plaintiff’s submissions that the claim is for period from the date of arbitral award, which is 14 November 2014.
14. Learned Counsel for the Plaintiff further submits that he could have claimed the value of the buildings but chose not to do so and, instead, claims the loss of use of the buildings on the basis that the buildings had a residual life and would have been re-erected and reused on another site of works by the Plaintiff. The loss of the buildings was a loss to the Plaintiff who was unable to use them. The Plaintiff submits that the best way of calculating the loss was to notionally determine what the Plaintiff would have had to pay every month to use, on another site, buildings such as the ones it had erected on the site of the resort. Such a sum would coincide with the cost that the Defendant would have had to pay to rent similar buildings and use them. The action of the Defendant in not returning the buildings not only breached Clause 15 of the contracts, but it constituted a fault, being an act which caused damage to the Plaintiff which 'Fault is an error of conduct that would not have been committed by a prudent person in the circumstances' per Article 1382(2)(a) of the Civil Code.
15. The Defendant submits on this issue that it is clear from a reading of the amended plaint, that the Plaintiff has made a claim for rent against the Defendant, as per its pleadings; and the Defendant has replied that there was no rental agreement between the Plaintiff and Defendant. It is submitted that the claim for rent was contained in the original plaint and denial of rental agreement was contained in the original defence. The Plaintiff has not made any attempt to amend its pleadings in respect of the claim for rent - when it amended its plaint. The Plaintiff maintained its claim for unpaid rent even in its amended plaint.
16. The Defendant further submits that in accordance with section 71 (d) of the Seychelles Code of Civil Procedure Act, “The plaint must contain the following particulars: . . . (d) a plain and concise statement of the circumstances constituting the cause of action and where and when it arose and of the material facts which are necessary to sustain the action;”. The Defendant further refers to the decision in Leveille v Pascal SCA 5/04 where it was observed:

"[W]e do reiterate - as we did in SCA No. 2/04 (A. Leon v Volare (Pty) Ltd) - our concern over the drafting of pleadings. The mere skeleton information provided, as in the case at hand, left much to be desired. It does not conform to the requirements of sections 71 to 76 of the Seychelles Code of Civil Procedure. It is trite that parties are bound by their pleadings and that one must not be allowed to depart from what one has pleaded. Doing so, may lead to acclaim of ultra petita as is now alleged in this appeal. The evidence given at a trial must be intra petita. Material facts have to be pleaded as required under section 71 - 76 (supra)".

17. Having carefully scrutinised the amended plaint, this Court is also of the view that the Plaintiff has clearly made a claim for rent against the Defendant as per his pleadings and his demand letter P3. Nowhere is it mentioned that the claim is based on the loss of use of the buildings, on the basis that the buildings had a residual life and would have been re-erected and reused on another site of works by the Plaintiff or that the loss of the buildings was a loss to the Plaintiff who was unable to use them elsewhere. The failure to include these facts, thereby somewhat disguising the circumstances of the claim, has misled the Defendant into believing this was a simple claim of rent. The Defendant also relies on the case of  Tirant & Anor v Banane [1977] 219, where Wood J. held: "In civil litigation each party must state his whole case and must plead all facts on which he intends to rely, otherwise strictly speaking he cannot give any evidence of them at the trial. The whole purpose of pleadings is so that both parties and the Court are made fully aware of all the issues between the parties.” (Emphasis added).
18. The plaint in this instant case does not contain a plain and concise statement of the circumstances constituting the cause of action and of the material facts. I am of the view that this is also a clear case where the Plaintiff has failed to give fair notice of his case.  In Gallante v Hoareau [1988] S.L.R 122, it was held, "the function of pleadings is to give fair notice of the case which has to be met and to define the issues on which the Court will have to adjudicate in order to determine the matters in dispute between the parties" (Emphasis added). The plaint does not contain a plain and concise statement of the circumstances constituting the cause of action and of the material facts referred to by the Plaintiff and as set out in para [14] herein. It is my view that on this ground the plaint should be dismissed.
19. The Plaintiff further contends that the judgment of the Court of Appeal SCA 10/2024 dated 25 April 2016, held that the beneficial owner of the said buildings and their contents was the Plaintiff. It is further averred that the said buildings remain in the possession of the Defendant despite the demands from the Plaintiff that these be returned and the Plaintiff be indemnified for their loss.  It is the Defendant’s contention that the buildings were not in a usable state after usage and after the opening of the Savoy hotel were lying around and in their answer they deny that the Plaintiff made any demand in respect of same.
20. As the Plaintiff does not claim the value of the buildings and chooses not to do so but instead, claims the loss of use of the buildings on the basis that the buildings had a residual life and would have been re-erected and reused on another site of works, the Plaintiff in order to establish his case must satisfy this Court on a balance of probabilities that the temporary buildings had a residual life and could have been reused and was needed on another site of works. In respect of the residual life of the said temporary buildings, I would revert to the evidence of the experts.
21. The expertise of the Quantity Surveyor (QS) called by the learned Counsel for the Plaintiff Mr Eric Frank was heavily challenged in cross-examination. Although he stated he was well qualified for the post, he failed to produce any certificate to prove his qualifications or expertise. He admitted that he had never given reports earlier to courts either in the Seychelles or South Africa. In other words his expertise has not been accepted before in any court of law. In such a situation when a challenge is forthcoming on the expertise of a witness no effort was made to rectify the situation by even producing the relevant certificates of the expert during the trial to prove his expertise at another date. It is the view of this Court that in the face of such a challenge there should have been an attempt to prove the expertise of the witness otherwise his evidence is unacceptable. In The Queen v Bonython (1984) 38 SASR in the context of admitting the expert opinion of a witness into evidence the court stated that the judge must decide two questions, second being “. . . whether the witness has acquired by study or experience sufficient knowledge of the subject to render his opinion of value in resolving the issues before the court” (see Hedge Funds Investment Management Ltd v Hedgeintro International Ltd & 2 Ors (CC 4/2012) [2017] SCSC 88 (5 February 2017)). The Plaintiff has failed to prove that expert witness testifying on their behalf had sufficient qualifications or expertise.
22. It is the evidence of the QS of the Defendant, Cecile Bastille that she had compiled her report on the legend of the proposed Vijay buildings layout sent by the contractor Vijay for approval, dated 18/04/2021, and the actual photographs of the site given to her by the Defendants. On perusal of her report it is clear that she has set out what the temporary structures were. It comprised of 2 workers accommodation buildings  referred to as barracks No. 1&2, Kitchen/dining building No. 3, Shower/toilet building  No. 4, Main store building No. 5, Cement store Building No 6, 1 Security hut, and water tanks. The barracks she states are manufactured in China and have the following custom modular building features: External and Internal walls, wall combination, doors, windows, structural construction, ceiling coating and insulation, electrical installation, and sanitary installations. She produced actual photographs of the structures and stated the temporary structures built by VIJAY did not have ceilings and had no pre-electrical installation or electrical installation. Sanitary installation was also excluded and was contained in a separate building. The floors were mass cement or concrete floors, which certainly could not be reused in another site. She stated in her evidence there were no pre-fabricated office containers, and the rooms on the bottom floor of the barrack were being used as office space.
23. She further stated in her evidence under oath that the temporary structures fixed by VIJAY were not new and had been taken from another site. This was not denied and the QS Eric Frank expert witness for the Plaintiff did appreciate that the period given by him was based on the temporary buildings being new structures at the time they were erected.  Further, the evidence of QS Cecile Bastille is that the temporary buildings were customized and made for the duration of the project which was three years. Her evidence based on the actual photographs of the site indicate that that the temporary buildings set up by VIJAY did not contain ceiling or electrical wiring as referred to in the catalogue models. It is clear that the QS Eric Frank was unaware that the temporary building structures had been customised as he based his report on the knowledge he collected from internet catalogue models as he was unable to visit the site. The QS Cecile Bastille also refers to the fact that the temporary buildings were subject to much damage at the time of removal and wear and tear and as it was built on a construction site being constantly used by many workers. QS Bastille further stated that what would have been left are only the salvaged items at the end of the term of usage of the said buildings. I am inclined to accept QS Bastille’s evidence on these issues as her approach is more practical than the theoretical approach of QS Eric Frank, whose credentials were never proved by the Plaintiff. She further stated that the lifespan of the prefabricated housing on a construction site would definitely not be the same as the prefabricated housing outside a construction site where a person is living in it and taking care and taking precautions in respect of it.
24. She further stated that the duration of the temporary structures on a construction site under a contract is the duration of the project; in other words, they would last only for the duration of the project and “terminate” thereafter. She stated that according to her experience, once the construction is over, the temporary building are demolished and removed from the site. She added that most of the temporary accommodation, by the time the workers finish working at the site and the project is over, is demolished and reduced to rubbles. She stated that the toilets, wash basins, mass concrete for the flooring, GI sheets, and pipelines are all subject to wear and tear, and steel mixed with  concrete are hacked and thrown away as the elements like cement dust have had its effect on these items. At page 8 of Proceedings on the 30th August 2022 at 9:30 am the QS Cecile Bastille further testified the following:

“Q.        It was also put to you in cross examination that the fact that you gave 20% as salvage for the temporary structures in your Report shows that the structures life expectancy extended beyond the 20 months that you gave to the structures?

A.          No it doesn’t mean it extended because I put 20% as salvage because once the project is complete the site had to be cleared. And once the site had to be cleared the accommodation and including all the temporary structures is going to be dismantled and once it’s dismantled it is not a building it is like piles of metals, piles of timber and everything. These piles for me I’ve considered this as salvage because these piles once you dismantled either you can sell it for salvage or if you want to whatever you want to do with it you put it as salvage because it is no longer a building it is a pile of materials.”

25. It appears it is for these reasons that learned Counsel for the Plaintiff, in the better interest of his client, decided to claim damages by way of delict and not on the value of the structure being retained by the Defendant less depreciation and lifespan of structures, materials and equipment contained therein but rather on the notion of what the Plaintiff would have had to pay every month to use, on another site, buildings such as the ones it had erected on the site of the resort. The witness was subject to lengthy cross examination but her evidence on these issues stood firm. Therefore, on consideration of her evidence, a serious doubt arises as to whether the not new prefabricated temporary structures being used by a large work force on a daily basis in a construction site and exposed to the elements and cement dust with no maintenance and care and built for the duration of the project could be removed again and used in other sites on a regular basis. Therefore, this Court is of the view that the Plaintiff has failed to establish that the said temporary structures relevant to this case could be reused.

26. The other element the Plaintiff has to prove is that he did in fact have a need for the temporary buildings to be re-erected and reused at another site of work. The Plaintiff submits that the best way of calculating the loss was to notionally determine what the Plaintiff would have had to pay every month to use, on another site, buildings such as the ones it had erected on the site of the resort. Such a sum would coincide with the cost that the Defendant would have had to pay to rent similar buildings and use them. The Plaintiff has not presented any evidence that it has rented any similar temporary buildings on any other sites. Even though the Plaintiff is a known contractor, this Court cannot take judicial notice of the fact that it had other sites that required the use of these buildings.   Therefore, this Court cannot come to a finding that in actual fact the Plaintiff had other sites where the temporary structures in whatever state they were, could have been re-erected and reused on such sites of work or that he had to rent out similar temporary buildings for other sites.
27. This Court agrees with the Defendants’ submissions that the Plaintiff should have pleaded and brought evidence of the actual payment that the Plaintiff had to pay to use other temporary buildings on another site. Otherwise, it appears to this Court that the Plaintiff is indeed attempting to claim a hypothetical maximized damages it could have sustained without proof that it has actually sustained. As held in Marie-France Marguerite v Wilfred Alcindor CC6 2013: “Plaintiffs must understand that if they bring actions for damages it is for them to prove their damage, it is not enough to write down the particulars and, so to speak, throw them at the head of the court, saying: "This is what I have lost; I ask you to give me these damages. They have to prove it” (see also Hari Builders (Pty) Ltd v S A Fabrication (SCA 31 of 2021) [2023] SCCA 42 (25 August 2023)). It is the view of this Court therefore that the Plaintiff has failed on a balance of probabilities to establish the two most important elements of his claim, namely the temporary buildings used at the site were reusable and there was a need for the them to be  re-erected and reused at another site of works.
28. It is the Defendant’s contention that  that there is a factual finding of the Arbitrator that the Defendant’s occupancy of the temporary buildings has ended when Savoy Resort opened (May 2014)  however  there is no such express finding by the Arbitrator. The Arbitrator however in his award has not awarded rent as compensation until the temporary buildings are returned to Vijay, it has awarded compensation until a specific date, namely, when the Savoy has opened for business. Therefore, it is clear that the Arbitrator found that there was a cut-off date for the compensation for occupancy as claimed. Such a date was the opening of the resort and not until the temporary buildings are returned as the Plaintiff is claiming in the present suit. In the view of this Court, this finding means that the occupancy basis of the claim has expired at the time resort has opened. For this reason, this Court agrees with the Defendant’s submissions that finding that the occupancy carried on after the opening of Savoy would be finding contrary to the arbitrator’s determination.
29. Consequently, it is clear to this Court that the Plaintiff’s relief for the period from September 2012 to May 2014 has already been decided upon by the arbitrator and cannot be claimed again in these proceedings. This Court further finds that after May 2014 there is no legal basis for the claim of rent for occupancy of the buildings in the strict meaning of term rent as there is no further rental agreement between the parties.
30. The Court, further agrees with the Defendant’s submissions that firstly there is no agreement between the Plaintiff and the Defendant for rent of the temporary buildings. Therefore, there is no basis for the Court to award the Plaintiff rent as damages claimed. Secondly, in light of the testimony of the QS Cecile Bastille regarding the demolition and removal of temporary structures after completion of the project and salvage value thereof, the Plaintiff has failed to establish that the said temporary structures relevant to this case could be reused. Furthermore, the Plaintiff has not substantiated their submissions that the amount claimed is for the actual loss they sustained by renting temporary buildings on other site while they could have re-used the ones left of the Defendants’ site.
31. On this basis and as explained above, this Court cannot award the Plaintiff damages as claimed in the amended plaint’s ‘Particulars of Loss’. The Plaint is therefore dismissed. Considering the facts peculiar to this case both parties have to bear their own costs.

Signed, dated and delivered at Ile du Port on 26 of July 2024

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M Burhan J