3146615

Derek Achong

A construction company has won its over $850,000 lawsuit against the State for unpaid fees for work on the unfinished Labour Heroes Museum in Fyzabad.

Delivering judgment during a virtual hearing yesterday, High Court Judge Frank Seepersad upheld Ramasray Brothers General Contracting Company Limited against State-owned Palo Seco Agricultural Enterprises Limited and the Office of the Attorney General.

According to the evidence in the case, the company entered into a $1.5 million written contract with Palo Seco to perform work on the site.

The project was discontinued on September 30, 2015, when the job was almost complete.

The company then sued Palo Seco for the remaining money owed under the contract.

The agricultural enterprise company claimed it had an agency agreement with the Ministry of Labour for the project and it was the ministry who cancelled it.

The Office of the Attorney General was added to the case but sought to remove itself from liability by pointing out that such an arrangement between the State enterprise and the ministry could not be binding as such projects had to go through the Central Tenders Board (CTB).

While Seepersad agreed with the AG’s Office analysis over the agency agreement, he condemned the contractual arrangement executed by Palo Seco.

“The continued use of wholly-owned State-formed special interest companies to execute projects for and on behalf of the Government has no place in a society which respects the tenets of good governance and which values accountability, transparency and proper procurement practices,” Seepersad said.

He also noted that based on the evidence in the case, which included statements on the halt on the project in Parliament, did not indicate if consideration was given to the substantial taxpayer funds that were expended on the project prior to the 2015 General Election.

Despite his ruling on the agency agreement, Seepersad said that the State was still liable along with Palo Seco for unjust enrichment as it received a recoverable benefit with a calculable value.

“The evidence also established that the claimant carried out work on public property for a public benefit over an extended period of time,” Seepersad said.

In assessing the compensation for the company, Seepersad rejected claims by Palo Seco that the project was two thirds complete when cancelled as he noted that it withheld its records of progress reports on the project.

“Such a stance suggests that it is likely that the said information was withheld because it undermined the first defendant’s defence,” he said.

Seepersad did reject claims from the company for an additional $163,000 in damages for losses it claimed it incurred through its overdraft facility as he said that it did not produce records to buttress its claim.

He did order the State to pay two and a half per cent interest on the outstanding money.

The company was represented by Anand Beharrylal, QC, and Zeik Ashraph. Rennie Gosine represented Palo Seco while Duncan Byam appeared for the the State.