Court Orders Ogun Govt To Pay Construction Firm N608m For Breach of Contract

An Ogun State High sitting in Abeokuta has ordered the state government to pay a construction firm, Contemporary Group Ltd, the sum of N608,867,925 being the outstanding balance for the construction of two state-of-art model secondary schools and hostels in the state.

Contemporary Group Ltd, through the law firm of Charles Mekwunye and Co., had dragged the state government before the court in 2020 for breach of the terms of the contract for the construction of the two model secondary schools with hostels located at Ewekoro and Ago-Iwoye areas of the state.

The firm averred that by two contracts dated May 22, 2012, the state government engaged its services for the construction of the two schools at the cost of N750 million each and an additional N50.8million cost for the two attached hostels.

After the state government’s initial payment of N525million and a letter for 65% irrevocable standing payment order which amounted to N867.8million, the firm claimed that it went to work and completed the construction for the two schools in 2015 with a work certification letter issued by the State Bureau for Public Monitoring and Concession. 

According to the firm, the two schools and hostels were commissioned with fanfare and have since being put to use.

After making an additional payment of about N568m between 2016-2018, the firm claimed that all its subsequent requests for payment of the outstanding balance of N608million inclusive of interest have been rebuffed to date by the state government.

In a judgment delivered on the matter in March 2021, by Justice O.J Bamgbose, the court found the state government liable for breach of the contract terms for the construction of the two schools which are still being used by students in various locations.

The judge said: ” The clear evidence before me is that the claimant had completed the construction of the two schools and the additional hostel and being entirely satisfied with the completion, the defendant had certified the works, vide the letter of certification issued by the defendant on January 27, 2015, and February 2nd, 2015.

“All these facts and further documents are not denied by the defendant or controverted in any way. My answer to the question of whether the defendant is in breach of the terms and conditions for repayment to the claimant under the contract agreement is therefore in the affirmative.”

Ruling on other reliefs sought by the claimant, the judge held: “A declaration is hereby made that the claimant is entitled to the balance payment of contract sum plus interest thereon for the project executed under the terms of the contract agreement for the construction of Model Secondary School at Ewekoro local government area and Model Secondary School, at Ijebu North Local Government between the government of Ogun State and Contemporary Group Ltd dated May 22, 2012, and the terms of the defendant’s letter from Ogun State Ministry of Works and Infrastructure to the claimant date December 10, 2013.

“A declaration is hereby made that the defendant is liable to pay the claimant the outstanding costs of construction of the additional hostel per Model Secondary School as contained in the defendant’s letter from the Ogun State Ministry of Works and Infrastructure to the claimant dated December 10, 2013.

“An order of this court is hereby made compelling the defendant to pay the claimant the outstanding sum of N608,867,935.

Earlier before considering the substance of the suit, the judge had noted that the defendant failed to file any response despite being served thrice by the claimant with proof of service which has the stamp of the governor’s office tendered before the court.