Windsor Village law suit accuses many

A legal action filed recently with regard to the rebuilding of the South Sound condominium complex Windsor Village after severe Hurricane Ivan damage names seven different defendants.

The plaintiffs in the action, Cayman General Insurance Company and the Proprietors of Strata Plan Number 151, filed suit on 28 February seeking nearly $3 million in equitable compensation and/or damages.

Named as defendants in the Writ of Summons are Crawford Adjusters (Cayman) Limited; Bould Paterson Limited; Alastair Paterson; Hurlston Limited; Hurlston General Contractors Limited; John Hurlston; and Robert Hurlston.

The 32-page Statement of Claim outlines some of what has transpired after wave surge from Hurricane Ivan ravaged Windsor Village, making almost every condominium unit unliveable.

Less than a week after the hurricane, Cayman General and Crawford Adjusters (Cayman) entered into a verbal contract for the later to provide the loss adjusting services for Cayman General with respect to the Windsor Village insurance claim.

Crawford was represented as an affiliate of the international loss adjusters firm Crawford and Co. One of its directors was Mr. Paterson.

Within the same week, the Chairman of Windsor Village’s Strata Executive Committee Patrick Harrigan met with Mr. Paterson about also being the project manager of the complex reinstatement project.

The Statement of Claim says Mr. Paterson agreed to provide those services to Windsor Village, but that he later informed Mr. Harrigan that he had incorporated a company called Bould Paterson and offered to do the quantity surveying and project manager services through that company.

A contract between Windsor Village and Bould Paterson was signed on 27 October 2004.

It is stated that the directors of Bould Paterson were Mr. Paterson, Martyn Bould and Jonathan Nicholson, all of whom were also directors of Crawford Adjusters.

Crawford’s duties were to act in the best interests of Cayman General while establishing the amount of the insurance settlement; reviewing funding advance requests by Windsor Village and/or those hired by Windsor Village with respect to the reinstatement work; and reviewing the work that had been done on the job site to ascertain the advances had been properly applied in the satisfactory completion of work before recommending further advances.

Bould Paterson’s duties were to act in Windsor Village’s best interest while providing a host of quantity survey and project manager services, which included, among many other things, preparing tendering documents for competitive bidding for a contractor; contract and cost control monitoring throughout the construction programme; and ensuring contractor’s performance was on target.

Mr. Paterson was the director of Crawford responsible for carrying our the loss adjustment work on Windsor Village at all material times, served as the project manager of the reinstatement project in a personal capacity from 14 September to 27 October 2004, and then was the director of Bould Paterson responsible at all material times for the services that company provided to Windsor Village.

The Statement of Claim says that about the same time as the contract was signed between Windsor Village and Bould Paterson, Mr. Paterson proposed Hurlston Ltd. construction company be used to carry out the reinstatement works. Mr. Harrigan agreed to the proposal on 19 October 2004.

Hurlston was sent a letter confirming the intention of entering into a formal contract for the reinstatement work on Windsor Village, and then advanced $250,000 for initial expenses.

Although a formal contract was never signed between the two parties, Hurlston was given six additional advances on the recommendations of Mr. Paterson. In total, Hurlston received CI$2.9 million of advances through 27 May 2005.

On 15 January, after advances totalling $500,000 had already been made to Hurlston, Crawford Adjusters sent a letter – signed by Mr. Paterson – to Cayman General stating, among other things, that ‘not only are the funds being properly applied, but the insured and his contractor are making every effort to expedite works at the most economical price’.

Crawford then recommended an additional advance to Hurlston of CI$500,000.

Additional advances were made to Hurlston by Cayman General pursuant to letters from Crawford Adjusters signed by Mr. Paterson stating the work to reinstate Windsor Village was progressing satisfactorily.

On 15 June, Crawford Adjusters sent a Final Loss Adjuster Report signed by Mr. Paterson to Cayman General that included a Costs Schedule to date, which the Statement of Claim says represents the amounts expended on work completed by or on behalf of Hurlston and/or Hurlston Contractors.

The total amount expended for work completed to date in the Cost Schedule was CI$3,735.518.

Windsor Village had also advanced Hurlston $150,000 for the seawall project, which was in addition to the funds it had received from Cayman General.

At some point in June 2005, the Statement of Claim says Pat Ulrich, who was assisting Mr. Paterson is his loss adjusting activities, became concerned about the amount of work that had been completed at Windsor Village as compared to the quantum of advances that had been made, and the amounts that were being charged for elements of work that had been competed.

Mr. Ulrich informed Mr. Harrigan of those concerns, who in turn passed them on to a high-ranking officer of Cayman General.

The decision was then taken not to advance any further funds to Hurlston until proof was provided that work to the value of advances had been completed by or on behalf of Hurlston and/or Hurston Contractors.

The Statement of Claim states that shortly afterwards, the two Hurlston companies took their workmen of the Windsor Village job site. Efforts to get them back on the job failed.

A letter sent by Robert Hurlston to Bould Paterson on 30 June 2005, indicated that the payments that had been received to that date – CI$2.9 million from Cayman General and CI$150,000 from Windsor Village with respect to the seawall – did not reflect the full value of works, materials on site and materials ordered and pending delivery. Mr. Hurlston said they estimated that and additional CI$750,000 was then due.

Cayman General commissioned Alan Purbrick of Capital Consulting International to visit the Windsor Village site and determine how much work had in fact been completed.

Mr. Purbrick found that only CI$929,944.61 worth of materials and reinstatement works had been completed by or on behalf of Hurlston and/or Hurlston Contractors at Windsor Village, which included $112,438.745 with respect to the rebuilding of the seawall.

After a new contractor was appointed to complete the reinstatement work at Windsor Village, it was discovered that substantial elements of the works done for or on behalf of Hurlston had been completed defectively.

Following a second site visit by Mr. Purbrick, he concluded that an amount of CI$165,507 should be subtracted from the value of materials and works completed by Hurlston to adjust for the work that was defective.

The Statement of Claim states that in light of the ‘gross disparity between the amounts advanced to Hurlston from Cayman General and Windsor Village and the value of work actually completed at Windsor Village by or on behalf of Hurlston and/or Hurlston Contractors, the representations made by Crawford Adjusters, Bould Paterson and/or Mr. Paterson are incapable of an honest explanation and must have been made with knowledge of or recklessness as to their falsity’.

A similar statement is made with regard to Hurlston and/or Hurlston Contractors.

The Statement of Claim suggests the defendants acted in combination, creating a conspiracy.

Because it remained liable to pay for reinstatement work that was represented as completed, and because it had to pay a new contractor to take on a distressed project, Cayman General calculates it suffered damages because of the defendants’ ‘misrepresentations, conspiracy and/or breach of fiduciary duty’ of either CI$2,897,416.14 of work adjusted for the defective or non-compliant work, or CI$2,731,909.14 if not adjusted.

In addition, an amount of $114,136.15 had to be paid to cure the defects of work done by Hurlston.

Windsor Village suffered damages of CI$37,561.25 with regard to the rebuilding of the seawall, being the $150,000 it had advanced for the project minus the $112,438.75 that Mr. Purbrick had determined had actually be done.

The Plaintiffs claims are made against all of the Defendants either separately or in combination with other Defendants.

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