Cepep ordered to pay $1.9m

The Cepep Company has been ordered to pay a contracting company $1.9 million for money owed for work done on the Talparo Health Centre. Justice Ricky Rahim yesterday made the order as he delivered judgment in Xander Contractors Ltd’s favour.

He has also ordered the Cepep Company to pay 2.5 per cent interest and prescribed costs. Xander Contractors claimed it was owed the money for work it did on the health centre in 2015, while the state-owned special purpose company countered that it owed nothing, since the work done was incomplete.

Although the judge awarded Xander Contractors $1.9 million, he did so on the quantum meruit basis which, in law, is the reasonable sum to be paid for work done when the amount due is not stipulated in a legally enforceable contract.

The company had asked for $2.9 million in its claim filed in 2017.
In his ruling, Rahim held that the alleged contract relied on by Xander Contractors was “null, void and of no effect.”
He said, “But it gets worse. The evidence shows that the claimant’s form of tender submitted by him is dated March 23, 2015. It therefore means that the claimant’s award of the contract would have been approved by the board before he even tendered for the job.”

Rahim also added that, “It follows that the tendering process that followed was a sham, designed to cover up the fact that the claimant was given preference to others in the absence of a rational basis for so doing. The type of behaviour employed by the defendant in that regard is not to be tolerated as it derogates from the established fair and transparent public process in the award of contracts funded by the national purse.

Consequently, the court finds that the contract having been awarded by a process otherwise than the process by which the defendant was bound to operate and which itself was unfair to all other tenderers is null, void and of no effect.”
Testifying at the trial in the Port of Spain High Court were the Cepep Company’s CEO Keith Eddy and Merril Jacob, a quantity surveyor with IT McLeod, a local firm hired by the company, to evaluate the work done at the health centre.
Eddy said a forensic audit had been done of the health centre contracts and there was no evidence that the work was completed according to specifications.

He admitted that the forensic audit report was not disclosed in the company’s defence because there would be legal ramifications, as a non-disclosure agreement had been signed. Eddy said the audit found the work at the health centre was of a poor standard and incomplete.

Eddy also said the company hired the firm IT McLeod to evaluate the work done on all the health centre contracts.
In his judgment, Rahim did not fault the current board as it related to the flawed tendering process, saying in his decision, “Finally, before disposing of the claim, the court wishes to underscore that it is not oblivious to the fact that Mr. Eddy and the new Board would have on the evidence inherited these circumstances, the fault for which cannot be laid at their feet."

He also said, "It is also regrettable that the plethora of similar cases that routinely traverse these courts consistently reflect the abuse of institutions
entrusted with the expenditure of what are essentially funds of the state as contributed to by the taxpayer. To that end as a nation we run the risk
of such behaviour becoming a stain on the post-colonial existence of our independent nation if it has not already so become. That being said, issues
of contract are matters for the courts and the chips must lie where they fall in the court of law, but these cases also raise much wider issues of
accountability and transparency in the management of our affairs as a nation for the good of the citizenry as a whole. They are issues in respect
of which we all bear an individual and collective responsibility to address regardless of our role and function."

The Cepep company became the centre of attention in recent weeks after Finance Minister Colm Imbert announced a 15 per cent pay increase for Cepep workers.
The minister had to give assurances that there will be not cuts in the number of workers nor will there be a cut in the hours of work despite a decreased subvention.
Xander Contractors Ltd was represented by attorneys Jagdeo Singh and Kiel Tacklalsingh. Cepep was represented by Farai Masaisai, instructed by the firm Hove and Associates.