KDC to pay contractor over P13m

Mpho Mokwape | Friday August 3, 2018 14:07

 

The council, which in 2012 engaged Estate Construction Company, has failed to pay the contractor remaining balance after an interim payment certificate was issued.

According to court papers, the remaining balance the contractor is seeking and which was awarded by the High Court is in the amount of P13,662, 742.20.

The aggrieved contractor had sought the court’s intervention in 2016 when the council only paid part of the amount claimed alleging that the balance remains due and unpaid.

The KDC, having failed at the High Court to sustain their contention to payment took the matter to the Court of Appeal (CoA) seeking to overturn the ruling.

Their main contention was that discrepancies between work done and work certified and that the audit team that was engaged had reported that there was over payment of P 13, 817, 689.01 excluding vat. However, the CoA on Friday dismissed the council’s appeal on grounds that it has failed reasonable explanation to their contention.

Justice Craig Howie said the council had by a letter dated August 5, 2016 acknowledged that they owed the contractor and that they will make a commitment to pay.

“Given the seriousness and discrepancies in the council’s various allegations, coupled with failure to provide any explanation to the letter, I have no hesitation in concluding that the council have no case,” he said. The judge said the council’s liability to the contractor was stated in a certificate by a person it deemed its agent and that it obligated the council to pay the sum certified. He explained that interim certificates must be honoured so that the contractor could pay for the goods and services required for the construction process. “There are limited grounds on which certificate can be contested, one being fraud or collusion,” Howie noted.

Justice Howie said the council’s opposing affidavit to the summary judgment of the lower court that was filed with the plea accused the engineer of negligence and even collusion with the contractor to swindle it. However, the judge said despite all that the very serious allegations particularly against a professional person is not contained in the pleaded defence.

Moreover, that also the imputations of serious dishonesty were also not contained in the memorandum of appearance to defend. “There is nothing in the letter which justifies the inference or interpretation that the engineer had erred whether negligently or otherwise, or that the work he certified had not be done. Re-measurement could have established that contractor was entitled either to refund or to none,” he said.

According to the records, in 2016 the council paid the contractor the remaining balance from the initial P22,976, 734.14 debt. The payment to be was stated as P13,662, 742.20, following the payment of P5 million paid to the contractor on August 30, 2016 and another P4,313, 991.82 paid on March 21, 2017 both amounts in reduction of the certified sum.

However in April 2016 the council appointed a four-member team to conduct an audit of the work done and payments made in view of the alleged discrepancies between work done and work certified.

The audit team reported on April 13 that overpayment had occurred in an amount of over P13 million excluding VAT therefore becoming reluctant to pay.