City of Windhoek sued over road construction deal

Garden Plaza Investment CC and Jimmey Construction (Private) Limited are suing the City of Windhoek for breach of contract, after the municipality allegedly refused to pay the two companies N$919,377.91 after a road construction deal.

Windhoek High Court Judge George Coleman heard on Wednesday that Garden Plaza entered into a written agreement with the CoW to buy Erf 8870  for a purchase price of N$798,600.00.

The agreement, according to Court documents seen by The Brief, further stated that instead of paying the purchase price as aforesaid, the company would construct, at its costs, a road to the Development Agreement to the value of the purchase consideration.

Barrister Patrick Kauta, who is representing the aggrieved companies, said an oral agreement was then made suggesting that Garden Plaza would then pay the municipality N$240,480.00 in respect of a betterment fee relating to Erf 8870, Windhoek.

Further, the applicants contend that it was agreed that instead of paying the betterment fee to CoW, Garden Plaza would construct the road to the total value of N$1,039,380.00, being the purchase consideration.

"Any amount with which the construction of the road exceeds N$1,039,380.00 the defendant shall pay to the first plaintiff, and it was indicated to the Plaintiffs that the necessary approvals had been obtained to make aforesaid payment as agreed. Jimmey Construction would, for and on behalf of the first plaintiff and in compliance with the first plaintiff’s obligations as such, construct the Lossen Street extension, for the benefit of and to the specifications of the defendant on the first plaintiff’s behalf and in accordance with the agreements between the first plaintiff and the defendant as pleaded above," the companies wrote in their particulars of claim.

The companies argue that the total costs of the construction of the said Lossen road extension amounted to N$1,958,757.91.

"In the premises the defendant is liable to the plaintiffs, alternatively the first plaintiff, alternatively the second plaintiff, in the amount of N$ 919,377.91, being the difference between the total costs of the Lossen road extension construction and the amount of N$ 1,039,380.00 set off against the total construction costs as set out …. To date and written demand notwithstanding, the defendant refuses to pay the plaintiffs."

However, Windhoek based Lawyer Flora Gaes, who is representing CoW, said the municipality did not enter into an oral agreement with the companies, challenging them to prove it. Gaes said the municipality only recognises the written agreement.




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Last modified on Thursday, 11 August 2022 21:07

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