Construction leader Datem Inc. has convinced the court of the presence of "fraud" in Megaworld's dealings with the contractor as it repeatedly failed to meet its commitments, mainly the payment of P873 million in obligations.
The Quezon City Regional Trial Court, in a 14 November order, slapped a writ of preliminary attachment on Uptown Parksuites Towers 1 and 2, Eastwood Global Plaza Corporate Tower and Luxury Residences, One Le Grand Tower, 18 Avenue de Triomphe and Clark Green Frontier.
Upon perusal of the records, the Quezon City RTC was convinced that "the allegations of the plaintiff (Datem) in its complaint and the evidence it presented through the testimony of Norman Bautista met the requirements of the law regarding 'fraud.'"
Bautista is head of Datem's contracts administration department and is in charge of ensuring that the provisions of contracts are followed.
The court cited the case of Republic vs Mega Pacific eSolutions Inc. which defined "fraud" as the voluntary execution of a wrongful act or a willful omission while knowing and intending the effects that naturally and necessarily arise from that act or omission.
"In its general sense, 'fraud' is deemed to comprise anything calculated to deceive — including all acts and omissions and concealment involving a breach of legal or equitable duty, trust or confidence justly reposed — resulting in damage to or in undue advantage over another by false suggestions or by suppression of truth; and it includes all surprise, trick, cunning, dissembling and any other unfair way by which another is cheated," Presiding Judge Rochelle Yvette Galano said.
While "fraud" cannot be presumed, it need not be proved by direct evidence but can well be inferred from attendant circumstances, according to the magistrate. Moreover, Galano said "fraud" by its nature is not a thing susceptible to observation or readily demonstrable physically; it must necessarily be proved in many cases by inferences from circumstances shown to have been involved in the transaction in question.
Datem and Megaworld came up with a mutual agreement dated 28 September 2022.
As a result, Datem agreed to turn over in full all of the projects to Megaworld in exchange for Megaworld's payment of its outstanding obligations.
The Mutual Agreement that was executed between Datem and Megaworld stemmed from the delays in Megaworld's payment of obligations to Datem under prior contracts.
A delay in Megaworld's payment of billings affected Datem's business causing its inability to comply with its deliverables.
Eventually, Datem had to stop work on some of its projects, thus, it urgently demanded that Megaworld pay its arrears, according to the court's WPA ruling.
Datem spokesperson, lawyer Rufino Policarpio, said: "As a business entity, the company needed restoration of its finances which could only be done through Megaworld's strict compliance with the terms of the mutual agreement."
Megaworld ploy
Datem, the lawyer, said was made to believe by Megaworld that it would pay its substantial outstanding obligations relative to the former's accomplished works upon the proper and amicable turnover of the projects. Datem, therefore, agreed to enter into a settlement agreement with Megaworld "with the end in view of being able to collect its substantial debts."
Confident that Megaworld would keep its end of the bargain, Datem signed the Mutual Agreement and, thus, suffered "since it was deprived of possession of the completed projects," Policarpio added.
In a statement late Monday, Datem said it is "seeking justice in the proper forum by filing a legal case to enforce unpaid accomplished work arising from completed projects with Megaworld Corporation."
"This decision follows years of patient negotiations and enduring unfair treatment. The case is now before the Courts of Law, and we want to assure our partners and stakeholders that we are committed to pursuing justice in accordance with due process," it said.
Datem said that in upholding the principle of integrity, it "honors contractual commitments to clients, vendors, and employees. Financially strong, we remain steadfast in our commitment to building a better and stronger nation."
"Despite the legal proceedings, Datem wishes to affirm that our operations will continue without any disruptions. We express our sincere appreciation for the understanding and support extended by all concerned parties during this challenging time," it added.
Megaworld denied cheating its business partner, despite an ongoing dispute with Datem.
"Datem said the P873 million it is claiming is just a meager 0.2 percent of the total assets of Megaworld. Is it Datem's malicious tactic to garner public sympathy and challenge the integrity and good corporate citizenship of Megaworld?" Megaworld's statement read.
"Megaworld never committed 'fraud' in its dealings with Datem. Perhaps, what is considered fraudulent is demanding payment for the projects they failed to deliver excellently and on time," it added.
The dominant realty firm maintained that it was the construction firm that "repeatedly" failed to fulfill its project obligations.
Megaworld argued that it even incurred additional costs because of Datem's alleged delays in delivering its projects. "After the lockdown was lifted, Datem could not catch up with the completion of works for the projects contracted to them. Despite many meetings with their president, Mr. Levy Espiritu, Datem continued to fail to fulfilling its obligations and worked slower compared to other similar-sized or even smaller contractors. They also consistently missed the completion dates they committed to Megaworld," the property firm said.
Datem's Bautista testified that there was no response at all from Megaworld "despite several demands and correspondences."
Bautista said that Datem has no projects with Megaworld anymore because of the Mutual Agreement. "Even before the Mutual Agreement, they rarely responded to any of the demands for payment," he added.
The court said that "it appears from the records that the defendant has not been compliant with the terms of the Mutual Agreement, particularly paragraphs 3.1, 3.2 and 2.2 thereof."
The court's decision cited evidence that the defendant has failed to pay the plaintiff the unpaid receivables for progress billings, change order billings, and unauthorized deductions; the remaining billings for accomplished works; and others which include Covid-18 related costs, additional works, maintenance and dewatering costs, extended preliminaries and inquire in unit costs."Defendant's non-compliance is further bolstered by the fact that Megaworld ignored the demand letters sent by plaintiff to exact compliance of the Mutual Agreement," the court ruled.
Meanwhile, some quarters have approached DAILY TRIBUNE, saying they are closely monitoring the stories as they might also lodge a suit against the realty company for the way it conducted business.
