PLANS by staff of Shell Development Company Limited to increase the housing stocks in the country through a proposal to offload 60 private homes into the nation's housing market may suffer a setback as a dispute had arisen over a change of the design of the intended estate between the financier of the project and the contractor.And following the inability of GTHomes Limited and Giant Strides Properties and Development Company Limited to amicably resolve their differences, parties have taken their grievances to court.Clearly, GTHOMES made out claims against Giant Strides Properties and Development Company Limited, Mr. Bolaji Adebajo, Uren Sterling Civil Engineering Limited and First City Monument Bank Plc, being first to fourth defendants respectively.As agreed, the N1.3b project was planned to be located along the Lagos' waterfront arena, Lekki Peninsula, Eti-Osa Local Government Area of Lagos. But the project may have been technically stalled at the moment as a Lagos High Court is already examining the claims and counterclaims of the parties.The financier, GTHOMES Limited had entered into an agreement with a realtor company, Giant Strides Property Development Company Limited through one Mr. Bolaji Adebajo, to part finance the delivery of six blocks of five-storey buildings comprising 12 units of two-bedroom pent suites and 48 units of 3-bedroom luxury flats, totaling 60 units on a landed property measuring 17,500 square metres. GTHomes was to finance the project to the tune of N700m on a land acquired from Elegushi Property Investment Company Limited, the original owners of the said land and who had assigned same to Shell Staff Co-operative.A civil engineering and building construction company, Messrs Uren Sterling Civil Engineering Limited was chosen as the main contractor for the project, who in turn requested First City Monument Bank Plc to provide on its behalf a performance bond and an advanced payment guarantee in favor of GTHomes to guarantee the contractor's performance of the contract for the construction of 60 luxury apartments for a total contract sum of N1, 570,776,389.00.In its statement of claim, signed by its lawyer, Mr. Alex Muoka, GTHomes said that Adebajo tendered to it a copy of the Deed of Assignment of the said parcel of land from the Elegushi Property Investment Company Limited to Giant Strides, and applied to the claimant for a construction finance term loan to develop the said land into a mini complex comprising of 60 units of luxury flats with an agreement that the first defendant would execute, a legal mortgage over the same parcel of land in favor of the mortgage institution and perfected as security for the facility.According to the claimant, in June 2009, following the application of the first defendant, GTHOMES granted Giant Strides' N700m construction finance term loan being a part funding for the project of 60 units luxury houses. GTHOMES added that the said facility was for 24 months and was to be secured by a legal mortgage over the property, followed by a facility offer letter dated 26th June, 2009, which conveys the salient terms and conditions of the term loan, and containing an attached project work schedule with specified monthly milestones and defined work scope for each month of the estimated 24 month project time frame.It further stated that following an agreement to disburse money directly to the third defendant, Uren Sterling Civil Engineering Limited, GTHomes had through FCMB released the sum of N338, 000,000.00 directly to the main contractor, being a mobilization fee to commence construction.Also in its claim, GTHomes said that the fourth defendant had executed in its favor a performance bond undertaking that in default in the performance of the said contract according to its terms and conditions, FCMB would pay to the claimant the amount due on the bond up to the limit of N157, 077,638.90, stating that both the advance payment guarantee and the performance bond were expressed to be valid for a period of 180 days.But in December 2009, GTHOMES said it observed that both the first and third defendants failed to comply with the agreement on specified monthly milestones and there was a significant deviation on the project site from the agreed concept of development. Instead of the agreed 60 units of luxury flats, GTHomes said the concept was changed to 74 units of bedroom terrace houses, over which it raised an alarm and that made the first defendant to belatedly formally notified it of the change of the development concept.And after efforts to resolve the differences failed, GTHomes made step to recall its fund, which was allegedly bonded by FCMB.Among other requests, GTHomes is asking for an order for foreclosure and sale of the parcel of the land measuring 3.759 hectares of land.In their statement of defence and counter claim, signed by Osahon Idemudia, the first to third defendants have accused the claimant of reneging on its term of the contract when it purported, to call in the facility before its maturity of 24 months. Not only that, this group of defendants said the claimant had turned down several demands for release of funds to them on term loan that would have enabled the speedy continuation of the project.The defendants said that the claimant's actions of calling in the term loan to the first defendant before its due date and the advance payment guarantee issued by FCMB prematurely, had occasioned on first and third defendants extreme hardship and huge losses as well as damages, as they have been unable to proceed with the development of the project as well as the proposed development as the action of GTHomes has been made known in the public space, making potential investors wary to invest in the project.Justifying the change of the design, the first defendant said has would enable it to save on the project cost, increase the number of units to be built as well as the potential cost of sale as each dwelling was more independent, the primary desire and concern of the off-takers and investing public. According to Giant Stride, the said adjustment was discussed with and approved the Shell Co-operative and communicated to the claimant as well as the fourth defendant.FCMB, which denied some of the claims by GTHomes said: 'Whereof the fourth defendant states that the claims of the claimant are speculative frivolous, an abuse of the process of this court and should be dismissed with substantial costs.'According to its position signed by Femi Onibalusi, the claimant's letter of 25th January 2010 was premature, uncalled for and in bad faith having neglected or refused to reject the variation of the concept of development.
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