CIG faces costly legal fight

| 31/08/2010

Cayman Islands News, Grand Cayman Island Headline News(CNS): The courtroom battle which government now faces with the former schools contractor, Tom Jones International, is set to be an expensive fight.  Not only did government lose its bid to get TJI’s claim against it thrown out, the judge has also ordered that government foot the bill for the contractor’s attorneys in the first round of what looks likely to become a very costly exercise for the Education Ministry. According to the judgment handed down by Justice Alex Henderson last week, TJI was “wholly successful” at this stage and was entitled to costs. Henderson also said that government’s counterclaim against TJI was already vulnerable to strike out because of the “woeful lack of particularity” presented to the court in this first round.

In a government statement last week in relation to the loss, officials said the reason why it was, as the judge said, "forensically embarrassed" was because it had not placed its full case before the court as there was no need to do so at the early stage, but it would now spell out its counter claim against those made by TJI, the company which walked off the school job sites last year after its dispute with government escalated.
 
In the first instance government had applied to the court to have TJI’s claims against it for just under CI$3million plus interest dismissed on the basis that it was frivolous, vexatious and an abuse of process. The attorney general offered five reasons why government should not pay two certificates from TJI issued in October 2009 which related to work undertaken at the two school sites for the previous month, but they were all rejected by the judge.
 
In what is already a complex contractual case, government had essentially said that because of wider negotiations going on with TJI intended to address the broader claims by both parties against each other, these two certificates formed part of the whole negotiations. The goal was to find an interim settlement to deal with the growing school costs and disputes and to try and get the projects back on track.
 
Government claimed, according to the court document, that wider negotiations for all of the claims and counter claims were in the process of being worked out when TJI presented these two certificates, 15A and 17A, which came to $2,947,818. The CIG said it did not need to pay TJI until the entire negotiations were resolved, while TJI claimed that the certificates were not part of the wider dispute but had been signed off by the surveyor and the architects and should be paid whatever the outcome of the other negotiations.
 
Presenting its position to the court, TJI claimed disputes over payment began almost immediately on the school projects. While the details were not set out, in general TJI complained of late payments on a number of occasions and seven day notices announcing imminent work stoppages had been issued several times. Government, however, claimed that some of the applications for payment contained inflated claims and were not adequately documented, so it was necessary to request additional information, which caused the delays.
 
By September 2009 the relationship between the parties had deteriorated and the completion of the two projects had become endangered. By the month end work had stopped at the John Gray site and was reduced at the Clifton Hunter site, which government considered a breach of contract.
 
In view of the problems, government engaged a project manager to try and resolve them, which TJI welcomed and negotiations began with the goal of reaching an interim agreement. Both government and TJI give a varying account of what happened with regard to the negotiations and the issuing of the disputed certificates.
 
The dispute boils down to the whether or not the two certificates for work which was completed and signed off by the architect and surveyor was or was not part of the wider negotiations. TJI says not as it claims these two certificates were approved by the architect and were not intended to be conditional upon an interim agreement and therefore government should pay. Government, on the other hand, says the certificates were drawn up in good faith as part of the attempt to settle the bigger picture, but as no agreement was ever signed they do not need to pay.
 
This argument, along with wider claims and counter claims will now go to a full trial in what is likely to become both an expensive and lengthy court room drama where all of the issues in dispute between the two parties will ultimately be decided by a judge.
 
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  1. Anonymous says:

    In a stroke of pure genius TJI walks off the job and says the Government is broke and blames it all on the extravagant spending of the PPM.

    This is pretty much the same thing the Premier and the rest of the UDP had been saying for months, so they could hardly disagree with TJI. However, at some stage they came to the realization that the UDP was now the Government. Then the sequence of events went something like this:

    Minister Rolston Anglin also said that he would not be intimidated by TJI, as he claimed the previous minister was, into signing unreasonable agreements.

     
    Following his second work stoppage last week, the contractor said he has walked off the job because the new government has offered no evidence that it can afford to complete the projects.
     
    Speaking in the Legislative Assembly on Wednesday, the minister said the claim related to an extraordinary payment. “The government’s position is that these demands are not due or payable and the writ will be defended vigorously,”  Anglin told his fellow legislators.
     
    Anglin is defending so vigorously that he is even willing to pay TJI’s legal fees so that they can have a fair chance.
     
    Thanks again Rollie.
  2. Beachboi says:

    If I’m not mistaken the 3 schools were going to cost in excess of 200 million to finsih.  This was not even going to include the furnishing and equipment and the fill at Frank Sound must have cost 10 million of that.  We obviously need these schools not to mention we desperately need a curricullum to bring us in line with international standards but let me get to the point. 

    The current leader will undoubtedly blame the former party and maybe rightly so but if TJI was the lowest bid what were they to do.  Obvioulsy this was not well thought out to begin with but if the current government leaders inherited this problem they should have made certain that they budgeted for the completion of the projects and tried their best to work through the problems.  When I see that the future of our youth is jeapordised in order to give 30 million to Cayman Airways and Boatswain’s Beach I want to slam someone up against the wall.  Not to mention the fact that the Attorney General should be immediately replaced as this is not the first evidence of negligence that he has been shown to bring to this island recently. 

    I have stopped blaming McKewad and his zombies and I am now placing fault on the lap of the Governor.  He needs to grab someone by the balls and squeeze hard and get some results.  This is the most embarrassing time for Cayman in its whole history and something has to be done. 

    CNS: Beachboi, have you read the new curriculum?

  3. Anonymous says:

    The PPM were willing to pay a substantial amount to get a grand school building.. The UDP will unwillingly pay a substantial amount to not get a grand school building. The problem is they are both paying with our and our children’s money.

  4. Anonymouse says:

    OMG and we need to add a sixth Minister to this grossly incompetent bunch.

    What a mess.

    O Well! Having removed junk food from the childrens Menu at school is sure to cure this problem come the next election.

  5. Anonymous says:

    I must say I am really torn with this one. On the one hand, I would love for Government to finally get a big slap that they hopefully never forget, so that they learn that they have to act just as professional and play by the rules as anyone else.

    On the other hand, TJI should have never gotten this project to begin with, and it is a sad day that the people in this country have to foot the bill for the Government’s continued F…..U….., so there is part of me who hopes that Government will get by with a black eye as otherwise we all are going to suffer the consequences.

    • Anonymous says:

      12:51, TJI bid was invited to bid onthis project along with all local and international firms.  Why do you think that they did not deserve the job?

  6. anonymous says:

    They better finish this case soon so as not to incur more court costs.

    Its best to settle this out of court!

  7. Anonymous says:

    I agree with most of the above comments, however, we cannot forget this is not simply a legal matter but also a construction / technical matter. The legal team obviously has limited experience in that area and so depends heavily on the construction professionals for support and guidance. this must be provided by the PM & QS and even the Architect. They should have sufficient knowledge and experience in dealing with construction contracts and industry norms. They should therefore be advising the CIG and the legal department accordingly. In addition, the technical team should be in a possition to present sufficient information at an early stage to avoid them from being embarrassed in court.

  8. ill eagle says:

    CIG Legal Department is a joke.

    Crown counsel seem to be those lawyers that couldn’t cut it in the private sector.

    Even if you were not putting forward the full counterclaim, the Crown is still obliged to put forward a sufficient case to legally support its counterclaim. This tripe about "no need to do so at this early stage" makes no sense and is indicative of the naivete of the AG’s legal team.

    Q.1 – If not at this "early stage" of the action, when else would Government’s proposed counterclaim be formally put before the Court for adjudication? Or were they just going to vaguely make noises about a counterclaim and hope it sticks later on? TJI has made a fully particularised legal claim against the CIG.

    Q.2 – Sensible litigation management means planning ahead to avoid costs, delay and risk of also paying TJI’s legal fees.  Here, the CIG have not thought ahead to anticipate the actual outcome: the CIG application to strike out TJI’s claim fails, its slapped with TJI’s legal fees and the CIG counterclaim pleading is so weak that TJI are practically invited to apply to strike it out.

    So, there will likely be a strikeout application by TJI to knock out the CIG’s poorly drafted counterclaim.   If TJI succeed, its legal fees for the strikeout will have to be met by Government.   This application would not be necessary if the Crown had simply put in the effort to draft its counterclaim not in full, but atleast sufficient to not be vulnerable to a strikeout.

    Jokers! 

    But I guess its ok when the Crown has an unlimited public purse to fart around on.

    Court documents poorly drafted, overall lack of planning, lack of foresight, crown counsel can cut corners and invite unneccessary applications, pay litigants legal fees, get struck out, appeal multiple times then put forward no case, turn up for court without knowing the background of the action ("its not my file) — with impunity.

    Its not as if the AG is going to require any kind of standards from the Legal Department.

    • Anonymous says:

      don’t beat up on CIG legal it is the jokers at education who fail to supply the information most likely.  The handling of these contracts should have never been conducted by the Ministry of Education period but rather by perhaps the then Ministry of Works.  The percurment process should not only look at if the contracted firms experience but should also consider the management by the CIG of such a type of contract and forbid a ministry from conducting such a project if they possess no experience and have not put together a team capable of understanding what is required such a task should be 1 reassigned or 2 neverundertaken.

      • Legal Own Goal says:

        A competent lawyer should know whether he has enough information/ evidence (from Ministry of Ed or wherever) to plead a legal case or counterclaim.

  9. Anonymous says:

    In the long run, maybe it is cheaper to tell some of the senior government bureaucrats to stay at home with full pay.

    Perhaps the second-in-command (who is not a political appointee) can do a competant job.

  10. Legal Beagle says:

    Who was advising CIG?  All this looks like is a desperate attempt to put off $3m spending to the next financial year.  That is not good honest governance.

  11. Anonymous says:

    Hey people. lighten up abit and let’s see where this goes. The Fat Lady ain’t sung yet!

  12. Pending says:

    How are Government going to foot the bill for their mistake?

    1) Cancel the Jazz Fest

    2)  Increase the duty on fuel and diesel

    3) ???

    • Anonymous Realist says:

      a) Implement draconian tobacco retailer taxes based on spurious junk science and ignorant public hysteria..KER CHING!!

      (Thereby damaging businesses, fostering unemployment, and creating a black marketfor tobacco, incidentally a perfectly legal product, which will probably be more lucrative than illegal drugs – ask the UK about that). Let’s hope for the sake of all the "nannies" who riddle society, that the authorities can control the influx of Benson and Hedges rather better then they can the Smith and Wessons, because tobacco is surely a greater evil than firearms and escalating crime, economic ruin and corrupt officialdom 😉 

      b) Invent some more "charges" for small business owners until they are bled dry and unable to feed themselves. KER CHING!!!

      c) Demand that the monopoly that is CUC donate it’s advertising budget to govermnent. After all, what purpose is their to advertising when the corporation in question has absolutely no competition? Why are they wasting money on TV "adverts" that do nothing but promote how community spirited they are? I think customers would rather pay a few dollars less on their exorbitant bills than be told on TV how altruistic XXXXX can be. Seems fair enough.Of course, either way we’re all still screwed – KER CHING!!

      I’m sure others can think of a few more. Maybe we should offer our services as "consultants" to government – anything we can do to help after all.

  13. Joe Bananas says:

    Caymans Incompetent Government (CIG) steps up and strikes out yet again.  Too bad for Cayman islands that the Incompetent (but not jobless) voters can not be held responsible for their actions.  Everywhere on Cayman Caymanians have been given a chance to prove themselves worthy from the civil service to the police force.  From Premier to accountants.  And what exactly has been learned?  And how to fix the problem?  Up to now their idea of fixing is to throw more money at it.  Soon they really will be broke and owe more than Caymans children can pay back in their lifetime.  Then what?  We can only wait and see.   We are watching as a once beautiful island inside and out turns to the dark side.

    • Anonymous says:

      This is so sad, but true!

    • Anonymous says:

      Umm…. you should know there are almost no Caymanians in the legal department (except the ones who basically granted status to themselves). Yes they may well be screwing up, but that is not one to blame Caymanians for…

    • A detached observer says:

      $17,000,000 in change orders says it all! Only someone with no business experience, working with improper plans and spending another person’s money could create such a mess.

      The extension to the Catholic School cost around $135 psf. I believe, while the school at Frank Sound is costing over $400 psf. (Someone tell me I’m wrong.) Instead of using common walls, right-angled structures  and realistic hurricane protection, everything has been designed to cost as much as possible.

      I believe Kurt Tibbetts presided over this with good intentions though. The best speech I have ever heard in Cayman was delivered by him many elections ago, at a public rally on Walkers Road, when he pointed to the destructive social forces that were building in Cayman, even then. This was maybe twenty years ago.

      He described what would would happen if Caymanians took no preemptive action, and he has been proved to be uncannily accurate.  Part of the reason Cayman is in such trouble is the culture of corruption within successive Governments, and the idea that incompetence is OK. Some of the youth have duly taken their cue from this leadership. Kurt Tibbetts, at least, can honestly say, "I told you so".

  14. Anonymous says:

    Thanks Rolston. Looks like "at the wheel" isn’t the only place you have been sleeping.

    • James says:

      Rolston, it looks like your own locals, are so quick to cast the blame on you, whilst the private entity TJI walks away with the country’s purse…

      lol… your own can be so cruel, I need a drink as well

    • Dilemma says:

      How is this Rolston’s fault? who hired Tom Jones? get your facts straight before you start pointing fingers.

  15. Anonymous says:

    A mess obviously created by the previous Minister of Education now on the oppossition side of the house. It would be interesting to learn / know of his indirect involvement with the contractors or investers of the company.

  16. Anonymous says:

    Instead of finishing hte schools and giving the children of this country a better chance at getting a good education, let’s waste the peoples’ money fighting a case we are not going to win and show the people yet again what a bunch of incompetent idiots we are.  Will we have to go to the UK again and beg to borrow more money to fight a useless battle? 

    Maybe the previous education minister did go a bit overboard with the 3 schools all at once and maybe they did not have to be such state of the art projects.  However, as previous governments ignored the education system and especially the lack of space in the schools, I believe he did it with the best intentions because he wanted better for the youth of ths Island.  I’m sure the current Minister would want the same thing and I would much rather have seen 3 new schools finished, or at the very least enough room for the John Gray and Clifton Hunter High school students to go to next week.  From what I’ve heard, it is going to be absolute chao next week.  Buildings unfinished.  No canteen.  What a mess.  What a complete waste of time and money.  The people of this country are struggling and there is no money to help them but there is always money for useless legal battles and first class travel, double salaries and luxury "vacations" for the chosen few.

     

    • Anonymous says:

      Maybe?!

      Why go ‘a bit’ overboard in the first place!!??

      We call that "Showboatin’!!"

      And sometimes we call it "cutting off your nose to spite your face"…

  17. Anonymous says:

    After it has been ‘certified’ the next step is payment. You can negotiate before a certificate not before. The CIG is on very unstable ground and this is a direct result of thier adversariable approach to PM.

    • Anonymous9 says:

      Huh?

      Let me read that again…

      "You can negotiate before a certificate not before."

       

      I think it all boils down to the government making their own Rules as they go along, not realizing that the Real World Rules ARE The Rules.

  18. Tim says:

    Never did the term toytown come quicker to mind than with this story. Regardless of the truth, and think we are all clear on that, Cayman has shown that it can’t stand up against real legal teams from the real world. Play toytown politic in your own nursery, but don’t mix with grown-ups – until that is, that you grow-up yourselves.