A construction company that was being sued for having allegedly defaulted on a building project has won over €167,000 in outstanding dues instead. 

The dispute between Kwik Mix Limited on one hand and Cefai Estates Limited and Lorna Vassallo on the other stemmed from a contract of sale dating back to October 2005.

In that deal, Kwik Mix Limited transferred a 270 square metre plot of land in Qormi to Cefai Estates and Vassallo, with each receiving half a share. 

The plot was sold for Lm70,000, equivalent to €163,056.14, out of which Lm55,000 were covered by a bank loan repayable within one year. 

The vendor, Kwik Mix, guaranteed that the land could be developed subject to the necessary planning permits being obtained.

Part of the selling price, €29,117.17, was to be paid in kind by means of a three-bedroomed flat and one-car garage that were to be transferred to the vendor in shell form. 

An architect submitted plans to develop the site and MEPA, the precursor to the Planning Authority, issued permits in June 2006.

Having obtaining planning permission for the site, in January 2007 Cefai Estates and Vassallo signed a second contract with Kwik Mix, engaging it to carry out building works on site, handling both materials and labour.

Works were to be completed within eight months, while the contract of works was to expire in December 2007. 

The project got underway and Kwik Mix engaged a sub-contractor to assist with the works. But in September, just three months from the deadline, the project hit a snag.

A third party had filed a complaint with MEPA, triggering an onsite inspection that led the authority to instruct the project architect to stop ongoing works. 

In a letter, MEPA informed the applicant that details supplied in the application concerning an alley and third party property were not correct, and that all works had to stop until fresh plans were submitted. 

Almost one year later, in July 2008, new plans with correct details were approved and MEPA granted its go ahead. 

Kwik Mix resumed works, although the contract of works had expired.

But when the block of apartments and underlying garages reached the second floor, Kwik Mix ceased its works, after finding out that other parties were not honouring their bank loan repayments. 

The matter ended up in court where Cefai Estates and Vassallo sued Kwik Mix for damages and penalties, running into hundreds of thousands, while also seeking to force completion of works.

Kwik Mix not only contested those claims but also filed a counter claim to recover €163,000 for works done as well as the price of the shell form property which had never been transferred in part payment. 

The dispute landed before the First Hall, Civil Court, presided over by Mr Justice Francesco Depasquale, who rejected all the plaintiffs’ claims. 

It was rather strange that they raised issues about the warranty of peaceful possession granted by Kwik Mix on the sale but only sued after the works hit a snag, observed the court. Moreover, the plaintiffs were also insisting on going ahead with the development. 

The court declared that Kwik Mix had not breached any obligations as vendor and was thus not to be held responsible in damages. 

As for the contract of works, Kwik Mix had no option but to stop when MEPA issued its letter in September 2007, suspending works for a year.

The measurements and details on the original deed of sale were correct.

It was the application submitted by the architect which did not correctly reflect the property on site. 

There was disagreement between the parties as to who had engaged the architect, but the court noted that a signature on the planning application clearly showed that he had acted under the plaintiffs’ approval. 

Kwik Mix could not be held responsible for breaching the contract of works which had expired when the go ahead came through. 

It was not the defendant’s fault but that of plaintiffs and their architect for submitting incorrect data in the first place, said the court.

When all was considered, the court rejected the plaintiffs’ claims and partly upheld those by the defendant company which was to be paid a total of €167,667.69 for the building works and the property owed to Kwik Mix jointly by the plaintiffs. 

Costs of the lawsuit also to be borne by plaintiffs. 

Lawyers Mario de Marco and Maria Margo Zammit Fiorentino assisted the defendant company.