Contractor Sues Church over Alleged Unpaid N29.5m Fees

Wale Igbintade

A firm, Paudemic International Limited and its managing director, Abraham Olorunda, have dragged the Registered Trustees Living Faith Church Worldwide before an Ogun State High Court sitting at Ota over alleged N29,532,638,60 unpaid contract sum awarded by the Church.

Also sued along with the Church are the founder of the Living Faith Church, Bishop David Oyedepo, and Covenant Microfinance Bank Limited.

The claimants in suit number HCT/429/2020 are also demanding an interest of 21 per cent per annum from October 2019 to judgment and thereafter at 10 percent per annum from judgment until final liquidation of the judgment sum. 

The Claimants in their statement of Claim alleged that they were awarded a contract of construction of cylindrical steel tank at Covenant University Ota through a letter dated 20th October 2008 in the sum of N14,108,000.00  only.

The claimants averred that they approached Covenant Microfinance Bank Limited, one of the conglomerates of the Defendants for advance payment guarantee of 75 per cent of the contract sum which was N10, 581,000.00 for the execution of the contract.

The claimants added that upon reaching 90 per cent completion stage of the contract, the Defendants issued a cheque of N10, 581,000.00 to the claimants which said cheque was returned unpaid upon presentation on three different occasions by the Claimants.

The Claimants averred further that when they were unable to pay back the Advance Payment Guarantee due to the dishonoured cheque, the Covenant Microfinance Bank converted same to loan and started charging interest on same.

The Claimants stated that by a letter of 11th February 2009, they wrote to the agent of the defendants complaining about the returned cheque and no step was taken by the defendants to correct the complaints.

They stated that the sum of N14,112,000 meant for other contract with the defendants were diverted without their consent by the defendants to Covenant Microfinance Bank for the service of the Advance Payment Guarantee turned loan despite the claimants’ request for interest waiver.

The Claimants averred that they were awarded another contract of overhead water tank and high steel tower at Landmark University, Omu-Aran, Kwara State dated 3rd August 2010.

The Claimants averred that while the Omu-Aran contract had reached 90 percent completion, the defendants allegedly terminated it, and the claimants were asked to carry out valuation of work done so far and materials on site.

The Claimants quantity surveyor arrived at N14, 713,312.90 which was rejected by the defendants, rather the defendants asked their quantity surveyor, Messrs. Eagles Flight Cost Associates to quantity the work done.

The Claimants aver further that the defendants quantity surveyor arrived at N10, 727,896.16 and recommended in its reports of 29th June 2011 that the claimants be paid the said sum arrived at.

The Claimants stated that the defendants only paid N5,213,448.00 out of the amount valued by their Quantity Surveyor leaving the sum of N 5,514,448.66 unpaid till date.

However, in their statement of defence, the 1st and 2nd Defendants stated that the Claimant failed and refused to comply with the fundamental terms of the agreement.

They contended that the claimants in the Articles of Agreement entered into by parties, it was fundamentally agreed upon, amongst other things that, “The unsatisfactory progress and non-compliance with the specification of the Organisation can give rise to the termination of the contract without notice.”

They stated that the contract was supposed to be executed by the Claimants within 28 days, but the 1st Claimant was unable to execute several months of it being awarded the contract in issue.

Also, the 3rs Defendant (Covenant Microfinance Bank) in its defence stated that the Bank was not privy to the activities of the Claimants, and the 1st and 2nd Defendants.

The bank stated that it was not aware or informed about the modalities of awarding contracts by the 1st and 2nd Defendants, and not involved in the scrutiny or supervision of completed projects.

The 3rd Defendant stated that the Claimants sometimes in 2008 approached her with an Intercontinental Bank cheque No. 0000735 and dated the 27/10/08 for a direct Value/Credit in the sum of 10,581,000 being the value of the cheque to enable him to get immediate cash for the execution of his ongoing project pending the clearing of the Claimants’ Cheque due to delay encountered in the process of clearing cheques as at that time.

The 3rd Defendant stated that by practice in the usual course of business the said sum was to be repaid maximum within the 3days required for the clearing of the Claimants’ cheque.

The 3rd Defendant thereafter presented the cheque for clearing as required in the course of business and due diligence and same was returned unpaid/unclear.

The 3rd Defendant further states that the cheque was re-presented as instructed by the 2nd Claimant severally again for clearing and it were returned with an inscription “payment stopped. Please do not represent”.

Upon the cheque being returned unclear with the above inscription, the Claimant’s account was automatically overdrawn thereby throwing the Claimant’s account into debit of the unclear sum.

The Bank stated that at that point, the 3rd Defendant had no other option than to play by the ethics of banking.

The 3r Defendant states that the Claimants never took any proactive step to repay the money since 2008 as the Claimants did not repay a dime personally from their coffers to offset the draft and rather the Claimants abandoned their account with the bank.

It stated that the claimants’ suit is vexatious misconceived, bereft of merit and should be dismissed with substantial cost.