By NEIL HARTNELL
Tribune Business Editor
A bungled contract triggered a dispute that resulted in the Bahamas Telecommunications Company (BTC) being ordered by the Supreme Court to compensate an independent contractor for four months of work.
Justice Ian Winder, in a June 3 judgment, said BTC’s much-touted fibre-to-the-home technology “was not gaining significant momentum” when it terminated KT MacTech’s installation contract without due cause.
As a result, he found the contractor was entitled to the contractually-stipulated three months’ notice plus its invoice for work completed in December 2016 that BTC had also failed to pay.
However, Justice Winder only partially ruled in KT MacTech’s favour and stopped well short of the $1.918m damages sought. He said there was “overwhelming evidence” that it was “an impossibility” for the contractor to fulfill the contractual term that ignited its legal battle with BTC given that - by industry standards - it would have to complete two days’ worth of work in just 24 hours.
KT MacTech, in its statement of claim, alleged that the fibre-to-the-home installation contract it secured with BTC contained an “express term” that it would receive “a minimum 276 points per work crew per day”.
The points system estimates how long it should take a technician to complete a field task, with one point equivalent to ten minutes’ worth of work. BTC, while admitting that KT MacTech’s contract contained this compensation arrangement, argued that it “was an error and is regarded as a mutual and/or unilateral mistake between the parties” that the contractor was fully aware of.
BTC, now controlled by Liberty Latin America through Cable & Wireless Communications (CWC), said the contract should have stipulated “276 job points per day” for KT MacTech as a whole, not its individual crews.
However, KT MacTech, which said it had to sign-up to a non-compete agreement to work exclusively for BTC and no rival carriers, alleged that BTC had “defaulted” on payments required under the contract based on the “minimum 276 points per work crew per day”.
It further claimed that BTC “begged indulgence” to allow it to pay 46 out of the 276 points “until they were able to subsidise the same with the balance of the payment”. Alleging that BTC never paid the full balance owing in any month, KT MacTech also claimed that the carrier “attempted to coerce” its contractor into waiving the “276 points” stipulation and sought $1.918m in damages.
Keith Mackey, KT MacTech’s president, said in evidence and during the Supreme Court trial that it took a year to negotiate a satisfactory installation contract with BTC after initial offers proved “too low”. He claimed that Nigel Brogdam, a BTC executive, asked him to send invoices for 46 points per crew per day until the carrier could provide more work.
“Mackey says he was hesitant but went along this only because he had already invested about $60,000 of his own money at this juncture and he had employees to pay,” Justice Winder noted. “Mackey denies ever agreeing to accept the 276 points per day (46 per crew per day) that [BTC] was the correct amount of points.
“He argues that he was merely being understanding of the defendant’s claim that they were waiting for the business to take off in order to provide him with the agreed upon compensation.” KT MacTech was then hit by temporary labour unrest just prior to Christmas 2016, as some crews - dissatisfied with their bonus - quit and left the firm with just two installation crews, well short of the six mandated by the BTC contract.
Mr Mackey, though, said he was able to source new employees over the Christmas period and sought training for them from BTC. The carrier was required by the contract to provide this, but it terminated the arrangement with KT MacTech in early January 2017.
BTC’s witnesses all contradicted Mr Mackey’s assertions on the “276 minimum points per crew per day”. Kirkwood Ferguson, a BTC senior manager of field operations with 39 years’ experience, said one fibre-to-the-home installation would take 90 minutes or nine points. As a result, he could only schedule between 42 to 48 points per day to his technicians.
And Edris Elliot, BTC’s director of service delivery and field services, said achieving 276 points per crew per day “would indicate 46 hours of work being performed or performable by each of [KT MacTech’s] crews in a 24-hour time period”. She estimated that each crew was capable of conducting 7.67 hours of work per day.
Farrell Goff, who served as BTC’s technical manager when the KT MacTech deal was made, said it was “impossible to carry out 27 installs per day”. Their evidence was backed up by former KT MacTech employees and Leonardo Johnson, owner of another BTC contractor, Splice & Connect Company, who said six installations per day was the maximum that could be carried out.
Justice Winder, preferring the evidence from BTC’s witnesses, said Mr Mackey had not convinced him he was approached by BTC executives seeking “forbearance” on what was owed. “There is also nothing to suggest [BTC], formally the nation’s only telecommunications provider, was unable to settle its debts as suggested by the plaintiff,” he wrote.
“I am satisfied that the plaintiff’s [KT MacTech] presentation of the invoices in the sum representing the minimum commitment as 276 points per day (as opposed to 276 points per crew per day) on 11 consecutive occasions was no more than a recognition of the fact the parties understood that these were the agreed terms relative to the minimum commitment, notwithstanding the written document...
“It seems unusual that any reasonable businessman or business would leave its money in limbo without an assurance to when it would be paid. Instead, [KT MacTech] rendered invoices as if the requested sums were complete and ‘identified’ the amount as the minimum commitment. Even if there was to be a forebearance, what was the justification for omitting any indication that a balance was owed.”
Justice Winder said it was hard to accept that KT MacTech would go half the agreement’s life without any idea as to when the balance owed to it would be paid, while it also failed to raise a word in protest or demand that BTC make it whole. No accumulating arrears were shown on any of its invoices.
He found that KT MacTech was well aware of the contractual error, and “cannot be permitted to take advantage” of this given that it performed half the contract without objection. As a result, Justice Winder rejected the full amount of its damages claim.
However, he also threw out BTC’s breach of contract claim stemming from KT MacTech’s inability to perform its work due to staff shortages. Finding that there was “no fundamental breach”, Justice Winder said two work crews remained and there was no evidence installations were required over the Christmas holiday.
He also found that BTC had failed to train KT MacTech’s new employees as mandated by the contract. As a result, Justice Winder found it could not terminate their agreement for cause and thus BTC owed the 90 days’ notice provided to its former contractor.
BTC was represented by attorney Raynard Rigby, while Wayne Munroe QC acted for KT MacTech.