The Tribune

By RASHAD ROLLE

Tribune News Editor

rrolle@tribunemedia.net

A COURT of Appeal ruling has underscored a hard lesson for homeowners locked in disputes with contractors: dissatisfaction with repairs is not enough to justify terminating a contract and withholding payment unless the evidence proves a legal breach.

That lesson cost Cliona Bacon, the owner of a Hurricane Dorian-damaged home in Hope Town, Abaco, after the appellate court dismissed her challenge to a $150,000 award in favour of contractor James Baillou, trading as Baillou Construction II.

Ms Bacon fired Baillou by email in September 2021, alleging that he was not building to code or in accordance with the plans provided to him. She had already paid $250,000 of the agreed $400,000 repair cost and refused to pay the outstanding $150,000.

The Court of Appeal, however, upheld Supreme Court Justice Constance Delancy’s finding that Bacon breached the contract, that Baillou was entitled to damages, and that the unpaid balance was properly awarded.

The dispute centred on Ms Bacon’s home, By the Steps, in Hope Town, which was damaged by Hurricane Dorian in 2019. Baillou, a local contractor, was recommended to Ms Bacon and was engaged around April 2021 to carry out renovation works.

According to the contract, dated April 7, 2021 and titled Estimated Costs to Make Repairs to Cliona Bacon’s House, the projected cost of the repairs was $400,000, inclusive of labour and materials.

The money was to be paid in four instalments: $150,000, $100,000, $100,000 and $50,000. The parties also orally agreed that about $300,000 would be applied to labour and $100,000 to building materials and supplies.

Mr Baillou filed a claim in the Supreme Court in November 2021 seeking the outstanding money. ms Bacon counterclaimed, raising concerns about delays and alleged defects in the work.

Justice Delancy found there was insufficient evidence that the parties had agreed on a firm completion date. Mr Baillou’s writ said the project would take about six months, while Ms Bacon denied that timeline and claimed the discussed completion date was July 2021.

Because no completion date was specifically stated in the contract, the trial judge found that the work had to be completed within a reasonable time.

In assessing what was reasonable, Justice Delancy considered the scope of the works, the lack of infrastructure following Hurricane Dorian, COVID-19 protocols, and changes among workmen on the site.

She also noted that The Bahamas remained under COVID-19 Emergency Orders during the contract period, requiring Baillou and his workers to isolate whenever they were exposed to the virus.

The trial judge found that quarantine periods could be extended by further exposure among workmen and concluded that the delays did not justify Ms Bacon rescinding the contract.

“These delays were not unreasonable for the time and do not constitute a breach of contract for which the Defendant is allowed to rescind,” Justice Delancy said.

She preferred Mr Baillou’s evidence and that of his witnesses, awarded him the $150,000 balance, and dismissed Ms Bacon’s counterclaim.

Ms Bacon appealed the ruling, but abandoned several grounds during oral arguments before Justices Turner, Fraser and Hilton.

Ms Bacon’s remaining grounds challenged the $150,000 damages award, the trial judge’s treatment of implied and express contract terms, her handling of the allegations of defective work, and her decision to prefer Baillou’s evidence.

Her lawyers argued that Justice Delancy erred by awarding the balance of the contract when the works were not substantially complete. They said Ms Baillou claimed $150,000 in labour costs but produced no evidence to support that figure.

They also argued that Justice Delancy failed to properly consider Ms Bacon’s counterclaim and did not give sufficient consideration to evidence of alleged defects, including photographic evidence.

The Court of Appeal rejected those arguments.

Justice Fraser said it was no longer an issue before the court whether Ms Bacon breached the contract because that ground of appeal had been abandoned. The remaining question was whether the amount of damages awarded to Mr Baillou was appropriate.

The appellate court found that it was.

The judgment noted that both sides accepted that about $300,000 of the contract price was for labour and about $100,000 was for materials. Since Ms Bacon had already paid $250,000, the court found it was reasonable to infer that the $100,000 for materials had been covered, leaving $150,000 attributable to labour.

The court rejected the argument that Justice Delancy wrongly awarded the contract balance rather than a properly proven damages figure, finding that, in the circumstances, the labour costs and the balance of the contract were one and the same.

The Court of Appeal also found that the works had been substantially completed. It noted that Ms Bacon’s own counsel said during oral proceedings that the contractor who ultimately completed the work estimated about $40,000 worth of work remained outstanding on the $400,000 contract.

Although Ms Bacon’s counsel maintained that substantial completion had not been achieved, the appellate court disagreed, finding that the estimate supported the view that the works were substantially complete when measured against the size of the overall contract.

The court also refused to interfere with Justice Delancy’s dismissal of Ms Bacon’s counterclaim.

Justice Fraser said the trial judge expressly said that she considered all material properly before her, which would have included the counterclaim. The appellate court said it saw no basis to disturb that finding.

Ms Bacon’s lawyers also argued that Justice Delancy failed to identify the implied and express terms of the contract. The Court of Appeal found that this complaint could not stand, noting that Ms Bacon’s counsel conceded during oral arguments that the trial judge did address the implied term requiring the works to be completed within a reasonable time.

The appellate court said Justice Delancy was not required to list every term of the contract, only those essential to her decision.

The court also rejected Ms Bacon’s attack on Justice Delancy’s assessment of witness credibility. Ms Bacon’s lawyers argued that Mr Baillou and his witnesses lacked candour and that the judge’s decision to prefer their evidence was unsupported.

But Justice Fraser said appellate courts are slow to disturb factual findings by trial judges, who have the advantage of seeing and hearing witnesses firsthand.

“As the trier of fact, the learned trial Judge was entitled to prefer the evidence of one party over the other,”  Justice Fraser said.