James Samuels, whose DSL service was cut off by GT&T because he was using it for internet calls has won his case for breach of contract before the Caribbean Court of Justice (CCJ) after battling it out in two courts here.
In a decision delivered on Monday in Port-of-Spain and posted on the CCJ website yesterday, the court upheld the ruling by Justice Rishi Persaud that there was a breach of contract.
It said that the order as to damages and to costs made by Justice Persaud on 28th July 2012 will stand. GT&T will also pay the costs of Samuels on the appeal and the failed cross-appeal and Samuels’ costs in the Court of Appeal to be taxed if not agreed.
Further, the order of the Guyana Court of Appeal dated July 8th 2014 has been set aside.
The appeal to the CCJ arose after Samuels sued Guyana Telephone and Telegraph Company (GT&T) on May 22, 2009 for breach of contract after his Digital Subscriber Line (DSL) internet service was cut off because of his use of Voice over Internet Protocol (VoIP) technology provided by US company Vonage.
GT&T defended the disconnection by arguing that Samuels’ use of VoIP was a violation of the terms of his service agreement which prevented international telephone activity and international telephonic traffic bypass as well as the provisions of the Telecommunications Act which forbid the operation of an unlicensed telecommunication system.
At the High Court here, Justice Persaud had found that GT&T had breached their contract to provide DSL internet service to Samuels. He ruled that GT&T had not given Samuels sufficient notice of any restrictive terms when he signed up for DSL internet service, that he did not sign any written contract and that his use of VoIP was not in breach of the Act. Justice Persaud had also found that GT&T’s exclusive licence was void under the Civil Law Act, Cap. 6:01 which prohibits illegal monopolies.
This ruling was appealed by GT&T and the Guyana Court of Appeal overturned it. The Court of Appeal with Chief Justice (ag) Ian Chang, Justice Yonette Cummings-Edwards and Justice James Bovell-Drakes, held that there was an implied term in the contract that Samuels would not employ his DSL internet service for international telephone activity and international telephonic traffic bypass. In relation to the breach of the Act, Justice Chang held that this was a public law issue which had no bearing on the breach of contract claim. Justice Cummings-Edwards stated that there was insufficient expert evidence to determine the issue of whether VoIP was an unlicensed telecommunication system under the Act. However, importantly the Court of Appeal left intact the findings of fact made by Justice Persaud.
Distinct issues
Both Samuels and GT&T then appealed to the CCJ. The CCJ in its ruling on Monday allowed Samuels’s appeal and dismissed GT&T’s cross-appeal. The CCJ said that its decision focused on four distinct issues: appellate interference with findings of fact, implied terms, breach of the Telecommunications Act and the validity of GT&T’s licence.
The CCJ said that based on the pleadings and the evidence before Justice Persaud, the case hinged on questions of credibility.
“The CCJ found no basis for interfering with the findings of fact made by the trial judge (Justice Persaud) who heard the viva voce evidence. The Court held that Persaud J properly believed Mr Samuels’ claim that he did not sign a DSL service agreement and was not aware of any restrictive terms. As a general rule, an appellate court should be slow to reverse a trial judge’s findings of fact, which are not disputed by the Court of Appeal: Meenavalli v Matute,1 Ali v Choong,2 McGraddie v McGraddie,3 and Thomas v Kvaener Govan”, the CCJ ruling stated.
The CCJ also ruled that the Guyana Court of Appeal erred in implying a term into the contract between Samuels and GT&T. The CCJ in it is ruling contended that the issue of implied terms was not raised by the parties and there was no evidence that demonstrated how Samuels’ use of Vonage would threaten GT&T’s business interests.
Further, the CCJ said that the Guyana Court of Appeal improperly relied on the post-contractual conduct of Samuels, to wit, his letter to GT&T informing them of his intention to use Vonage via his DSL internet connection, to justify the implied term.
One of the determinations sought from the CCJ by GT&T was a ruling that the Court of Appeal had erred in upholding the findings of fact of Justice Persaud as the findings were contrary to the weight of the evidence.
Pleadings
In its discussion of this issue, the CCJ noted that Counsel for GT&T had submitted that the findings by Justice Persaud that there was no written agreement between the parties, that there was no restrictive term in the parties’ agreement and that GT&T did not sufficiently notify Samuels of any restriction on his internet usage, ran counter to the weight of the evidence present during the trial. In support of its contentions, the CCJ said that GT&T focused on the numerous inconsistencies in Samuels’ pleadings and the evidence presented at trial. Given these complaints, the CCJ analysed the pleadings and the evidence set forth by GT&T in the trial before Justice Persaud. The CCJ noted that pleadings are averments which a party makes to enable the opposing side or sides to know in advance of the trial what case they have to meet and to define the issues on which the Court will rule. The CCJ said that if pleadings are contradictory or internally inconsistent, it falls upon the party affected to apply to strike out the same.
The CCJ said that the failure to take such preemptive action exposes a litigant to the risk that his adversary will lead evidence in accordance with such allegations in the pleadings. In such a situation, the trial judge would then be compelled to decide the case on the evidence actually placed before the court.
In this regard, the CCJ said it was clear that Samuels’ pleaded case evolved over the course of the litigation with no objection forthcoming from GT&T. The CCJ said it was clear that when the two pleadings are placed side by side, Samuels neither admitted nor conceded that there was a contract between him and GT&T as pleaded in paragraph 6 of the Amended Defence or as alleged in the letter dated April 13, 2007 pleaded at paragraph 5 of the Amended Statement of Claim. The CCJ said that it bears noting that GT&T took no objection and allowed the matter to go to trial based on the pleadings.
The CCJ said that given that the state of the pleadings at the start of the trial left the issues unclear, Justice Persaud ultimately had to be guided by the evidence before him.
Accept or reject
At the trial, the CCJ said that Samuels in his witness statement and cross-examination gave evidence, which the judge was required to accept or reject. The evidence before Justice Persaud consisted of the answers to interrogatories, the witness statements, and the viva voce evidence of the witnesses. In this regard, the evidence of Samuels himself and of Gene Evelyn on behalf of GT&T was of crucial significance to the judge’s ultimate findings of fact, the CCJ noted.
At one crucial point in the testimony before Justice Persaud, the CCJ noted that Evelyn admitted that he could not swear that the terms and conditions for the DSL service were handed to Samuels at the time of signing the application form. He went on to say that he did not know if Samuels signed or was given a copy of the service agreement. The CCJ noted that Evelyn then admitted that the
allegation in the witness statement that Samuels signed the DSL agreement was not true.
Said the CCJ “It was, therefore, not surprising that the learned judge’s assessment of Mr Samuels’ oral evidence was not affected by the 2008 affidavit (sworn to by Samuels in an earlier matter with GT&T and tendered by GT&T as evidence). After hearing all evidence, Persaud J concluded as follows:
`… I find the Defendant (GT&T) has failed to prove that the terms were brought to the attention of the (Plaintiff Samuels) at the relevant time or that he had an opportunity to read them when he applied for the DSL service. I accept the evidence of the Plaintiff on this issue and find that the Defendant did not do all that was reasonably sufficient to give the (Plaintiff) notice of the conditions relied upon …’”
The CCJ said after careful examination of the facts and the law, it affirmed Justice Persaud’s acceptance of the evidence of Samuels as well as the finding that GT&T did not do all that was reasonably sufficient to give Samuels notice of the conditions it relied on.
“It is well settled that a final appellate court should be slow to reverse a trial judge’s findings of fact, not disputed by the Court of Appeal”, the CCJ said, adding “We can find no basis upon which the findings of Persaud J ought to be disturbed. The case ultimately turned upon issues of credibility. It is trite law that such matters are almost the exclusive domain of the trial judge who would have seen and heard the viva voce evidence.”
Implied terms
On the question of implied terms which the Guyana Court of Appeal used to overturn Justice Singh’s decision and which Samuels appealed, the CCJ argued that this matter had not been raised at all in GT&T’s notice of appeal. The CCJ noted that the Guyana Court of Appeal felt assured that a term should be implied into the contract between GT&T and Samuels prohibiting the latter’s use of his DSL internet service. The Court of Appeal was of the view that such an implied term was required to give “business efficacy” to the agreement in light of GT&T’s view that use of its DSL to access VoIP was a breach of the telecommunications Act and that GT&T considered that its monopoly would be undermined.
The CCJ cited the ruling by Lord Hoffman in Attorney-General of Belize and others v Belize Telecom Limited and said that neither the Guyana Court of Appeal nor GT&T before the CCJ properly applied the principles as set out in the precedent.
“On the contrary, the background knowledge reasonably available might have revealed that commercial DSL internet access providers in some Caribbean countries raise no objection to the use of Vonage VoIP equipment on their DSL lines. In fact, in the course of argument, counsel for GT&T accepted that in some countries of the region the use of Vonage equipment on internet access DSL lines is permitted. We have also taken judicial notice of the European Union regulatory framework for electronic communication which came into force in 2003 and supersedes the EC Directive 98/10/; the latter being highlighted in Minister of Industry Commerce and Technology and ors. v Infochannel Ltd and ors. This framework is constructed on the understanding that VoIP is frequently used in different contexts, i.e. on a personal computer, on a private network or as a public service. The nature of the service being offered is the determining factor as to whether the use of VoIP falls within the regulatory framework or not. Further, GT&T contended that in the course of its operations it became necessary to have an express term prohibiting the use of Vonage VoIP equipment on its DSL internet service for the purpose of making and receiving voice communication. The foregoing suggests that GT&T came to the clear conclusion that it could not assume that such a term was implied in its contracts”, the CCJ stated.
Fell into error
The CCJ further said that the Court of Appeal seemed to have assumed that GT&T’s business would be so badly affected by only one of their customers that a term must be implied in their contract with Samuels. “In so doing the Court of Appeal fell into error”, the CCJ said, referring to a ruling in another case which said that the issue of implied terms must be pleaded and must be supported by evidence. The CCJ said that the decision of the Court of Appeal was also insupportable since it was driven to imply a term on the basis of Samuels conduct after the execution of the contract when he sent a letter to GT&T notifying it of his intention to use Vonage.
However, the CCJ said “it is well established that conduct related to acts subsequent to the formation of the contract is of limited value in assessing the contemporaneous terms of the contract in the event of a dispute. This principle was correctly stated by Sales J in Sattar v Sattar 20 as follows: .
“`Conduct of a party after the making of a contract does not provide relevant factual context to explicate the meaning with which the parties used the words at the time they made the contract.’
We therefore hold that the decision of the Court of Appeal implying a restrictive term into the contract between Mr Samuels and GT&T must be set aside. Mr. Samuels is therefore entitled to succeed on this aspect of his appeal.”
On GT&T’s contention that the Telecommunications Act had been breached, the CCJ said that the only authority with the power to assert a contravention of the Act is the Director of Telecommunications and he was never party to the proceedings.
On Samuels’ contention that GT&T’s monopoly licence was illegal as had been held by Justice Persaud, the CCJ said that Samuels’ claim had been couched in contract law and to allow him to challenge the validity of GT&T’s licence in these proceedings would have been “manifestly unfair” to GT&T.
The decision was handed down by Justices Wit, Hayton, Anderson and Rajnauth-Lee.
Devindra Kissoon appeared for the Appellant Samuels while Miles Fitzpatrick, SC and Timothy M Jonas appeared for the Respondent, GT&T.
