Contractor ordered to pay Lm450 penalty

A court yesterday ordered a contractor to pay a Lm450 penalty to the accountant general and the director of contracts after concluding that the contractor was in breach of his contractual obligations.

The accountant general and the director of contracts filed their writ against Joseph Spiteri, claiming that Spiteri had bound himself to construct six substations in different industrial areas after he was awarded a tender in May 1996.

However, Spiteri had subsequently failed to fulfil his contractual obligations and plaintiffs had been forced to make use of other contractors against payment of Lm5,927.70.

Plaintiffs added that according to the general contract conditions forming part of Spiteri's contract, Spiteri was responsible for the payment of any damages suffered by them.

Furthermore, Spiteri was also liable to pay a penalty of Lm450.

The accountant general and the director of contracts requested the court to condemn Spiteri to pay them Lm6,377.70.

Mr Justice Philip Sciberras yesterday noted that although Spiteri had been duly served with plaintiffs' writ he had failed to file his pleas.

However, after hearing the evidence produced, the court was satisfied that Spiteri had clearly failed to honour his contractual obligations, for he had failed to execute the works in issue.

When examining plaintiffs' claim, Mr Justice Sciberras declared that in such a situation, plaintiffs could not demand the court to condemn Spiteri any sum that they claimed they had incurred.

In this case, plaintiffs had not proven to the satisfaction of the court how much they had paid to make good for Spiteri's works, nor had they produced evidence of the offer submitted by the second-placed tenderer for the contract.

As a result, the court declared that it could not order Spiteri to pay the sum requested by the accountant general and the director of contracts.

However, the court upheld plaintiffs' request limitedly with respect to the penalty, and Spiteri was ordered to pay plaintiffs Lm450 by way of penalty.