Cevons, Puran Brothers suspension of services in breach of contract
-attorney advises city council
The Mayor and City Council’s (M&CC) attorney Roger Yearwood has informed the council that their two major garbage collectors, Cevons Waste Management Inc and Puran Brothers Disposal Services, are in breach of their contracts after they chose to suspend their services last month.
Sharing his legal opinion with the council, Yearwood said that the contract makes no provision for suspension of works.
The two companies on November 26th, withdrew their services from the municipality after it failed to pay a total of $160 million for the work they have done since June. The two companies, not long after, issued a joint statement calling on Central Government to intervene in order for them to be paid.
Responding to their call, the Ministry of Communities intervened and agreed to pay off a substantial amount owed to the two companies, resulting in both companies signaling their readiness to return and provide their service to the city. The Ministry of Communities agreed to pay the contractors $130 million out of the $160 million owed. The M&CC will have to pay the two contractors the remaining $30 million.
Nonetheless, the council sought legal advice from its lawyers as it relates to the suspension of the contractors’ services. The council’s contracts with Cevons and Puran Brothers for garbage collection in the capital are to expire in 2020.
In his advice to the council, Yearwood said that the companies could have opted for two alternatives which he outlined.
He stated that the companies could have treated the non-payment by the city council as a breach of the contract, terminated their service and later “sue for the sums due under the contract and for the breach of the contract.” The second alternative, Yearwood said, was that the companies could have treated the contract as “still subsisting and sue for damages for breach of the terms of agreement whilst treating the contract as still existing. In such instances, Cevons and Puran Brothers would still be obligated to perform their obligations under the contract.”
Yearwood, in his advice, said that with there being no provision in the contract for the “suspension” by the two companies, their action is tantamount to them treating the contract as terminated. He said that the M&CC would be liable for the sums outstanding under the agreement. “The Parties can agree to renegotiate or reengage under the old terms if they see fit however,” he said.
At the council’s statutory meeting yesterday, Mayor Patricia ChaseGreen informed the council that a second legal opinion is being sought.
She announced that in 2019, council will advertise for a new garbage arrangement. “We will advertise for contractors to collect garbage in the constituencies so (we) will not have just two garbage collectors working in the city,” she said.
According to ChaseGreen, the small contractors will be working along with the Solid Waste Department until January 31st 2019, when their contract expires.
Meanwhile, acting Town Clerk Sharon HarryMunroe disclosed that the legal firm Boston and Boston, has written on behalf of Cevons and Puran Brothers to the council, requesting a copy of the new proposal for the remainder of the year.
The council had proposed that Puran Brothers will work in constituencies 7 and 9 and will manage the static compactor at Albouystown market, while Cevons will operate in constituencies 5 and 6 and manage the Bourda market compactor. The companies have asked for time to consider the proposal.
Last week, Chairman of the Finance Committee, Oscar Clarke, had said that the council will be in a better position to pay its two major garbage collectors in January.