"Thank you to the procuratorate for appealing in accordance with the law and returning justice to us. After so many years of lawsuits, we finally settled the project payment, and we almost lost 2 million yuan more...... "Recently, when the prosecutor of the Gansu Provincial Procuratorate paid a return visit to a decoration contract dispute protest case, Gao, the person in charge of a hotel, said with emotion.
Disputes over hotel renovation
The hotel was sentenced to pay more than 350,000 yuan for the project
On May 11, 2014, a hotel signed a decoration project contract with a decoration company, agreeing that a decoration company would contract the interior and exterior decoration project of the No. 3 building of a hotel club, and the contracting method was contracted labor and materials, and the completion date was September 10, 2014. During the performance of the contract, due to the addition of change works in addition to the decoration contract, the decoration company only delivered the renovated Building 3 to a hotel for trial operation in June 2015.
On July 6, 2015, the two parties signed a contract for the decoration project of Building 4 of the hotel. During the construction of Building 4, due to the addition of alteration works in addition to the decoration contract for Building 3, the two parties had disagreements on the construction period of Building 4, the payment of workers' wages, the procurement of materials and the payment of materials, and a supplementary agreement was signed. On December 25 of the same year, the decoration company withdrew from the construction site because the two parties did not reach an agreement on the progress payment of the project. In order to reduce losses, a hotel contracted the remaining project to an outsider to complete the construction.
On January 26, 2016, a hotel sued a decoration company to the Yuzhong County Court, requesting an order to terminate the contract involved in the case and for the decoration company to pay its economic losses of 3 million yuan. In this regard, a decoration company filed a counterclaim, requesting that a hotel be ordered to pay more than 3.96 million yuan for the project and more than 590,000 yuan in liquidated damages.
During the trial of the case, because the two parties could not reach an agreement on the cost of the additional change project outside the decoration contract of Building 3 and the completed project of the decoration project of Building 4, the Lanzhou Intermediate People's Court entrusted an appraisal agency to conduct the appraisal after being selected by both parties. After amending the repeated objections raised by both parties on the appraisal report, the appraisal agency gave a final appraisal opinion on May 3, 2018, and determined that the cost of the change project in Building 3 outside the decoration contract was more than 710,000 yuan, and the completed project cost of Building 4 was more than 1.98 million yuan.
On May 21, 2018, the Yuzhong County Court ruled to terminate the two contracts signed by the two parties, and the hotel paid more than 350,000 yuan for the project of a decoration company, rejecting other litigation claims of the two parties.
The second-instance trial revoked the original judgment and remanded for a new trial
The hotel was sentenced to pay more than 2.5 million yuan for the project
A decoration company was dissatisfied with the court's judgment and appealed to the Lanzhou Intermediate People's Court. After review, the Lanzhou Intermediate People's Court ruled to revoke the original judgment and remand the case for retrial on the grounds that the basic facts of the case were unclear.
In the course of the retrial of the case, the Yuzhong County Court once again confirmed that, according to the Supplementary Agreement signed by the two parties, during the construction of Building 4, a hotel had paid a total of more than 1.56 million yuan in advance for labor wages and material costs, and both parties had no objection to this. However, in the process of project cost appraisal, the two parties had a dispute over whether the labor wages and material costs paid in advance were included in the total cost of the No. 4 building project, and the differences were large.
The appraisal agency replied to the objections raised by a hotel and a decoration company: the objection to the objection raised by a decoration company that "the labor wages and material costs advanced by Party A are not included" was "not within the scope of this appraisal". Accordingly, the Yuzhong County Court held that the reply had already explained that the content of the appraisal did not include the advance payment of labor wages and material costs by a hotel, so the total cost of more than 1.98 million yuan of the completed project of Building 4 did not include the labor wages and material costs of more than 1.56 million yuan advanced by a hotel. On June 18, 2019, the Yuzhong County Court ruled to terminate the two contracts involved in the case, with a hotel paying more than 880,000 yuan for the decoration of Building 3 and more than 1.62 million yuan for the decoration of Building 4, totaling more than 2.5 million yuan, and rejecting other litigation claims of both parties.
Dissatisfied, a hotel appealed to the Lanzhou Intermediate People's Court, and after being rejected, it applied to the Gansu Provincial High Court for a retrial, which was also rejected. In desperation, a hotel applied to the Lanzhou Municipal Procuratorate for supervision.
Hotel application supervision
After the procuratorate protested, the court remanded the case for a new trial
"The appraisal opinion is the assessment of the total cost of the No. 4 building project, we have paid more than 1 million yuan for the project, if the cost is superimposed, how to identify the materials that have been used in the project? A hotel argued that all the materials purchased by the advance payment involved in the case had been used in the construction of Building 4, and it was impossible to distinguish the appraisal separately, and the appraisal agency's reply should be understood to mean that the scope of the appraisal it undertook was the overall project of Building 4, and did not include the separate appraisal of Building 4 involving more than 1.56 million yuan in advance material costs and labor wages, and the court replied that the appraisal agency "is not within the scope of this appraisal" In this sentence, it is obviously contrary to the facts to conclude that the total appraisal cost of Building 4 does not include the labor wages and material fees advanced by a certain hotel.
On March 24, 2022, the Lanzhou Municipal Procuratorate filed a protest with the Gansu Provincial Procuratorate on the grounds that the basic facts determined in the civil judgment of this case lacked evidence and the law was wrongly applied. After the Gansu Provincial Procuratorate accepted the case, it carried out an investigation and verification on the focus of the case - whether the total cost of Building 4 involved in the case included more than 1.56 million yuan of labor wages and material costs advanced by a hotel.
"Judging from the content of the Supplementary Agreement signed by the two parties and the statements of the parties, Building 4 is still a contractor, and the two parties have no objection to the material costs and labor wages being borne by a decoration company. According to the Several Provisions of the Supreme People's Court on Evidence in Civil Proceedings, if the parties still have objections after the appraisal agency replies to the parties' objections, the people's court shall notify the dissenting party to pay the appraiser's appearance fee in advance and notify the appraiser to appear in court, but there is no case of the appraiser appearing in court in this case. ”
The procuratorate believes that the focus of the dispute in this case is how to understand the sentence "not within the scope of this appraisal" issued by the appraisal agency, and it is necessary to further investigate and verify with the appraisal agency.
On May 25, 2022, the appraisal agency replied to the procuratorate: "In the appraisal opinion, all the labor, materials, machinery and other costs of the project have been included in the cost appraisal report of the completed project quantity of Building 4, and the labor wages and material costs advanced by a hotel have not been deducted from the cost of the completed project quantity of Building 4. It can be seen from this that the adjudication organ's factual finding that the total cost of Building 4 in the appraisal opinion "does not include the labor wages and material costs advanced by a certain hotel" is inconsistent with reality.
"The material cost and labor cost in the general project cost belong to the direct project cost, is the core part of the cost, for the appraisal purpose, process, whether it includes the relevant costs of the advance payment, the appraisal agency has the most right to speak, and the adjudication organ replies to the appraisal agency' It is believed that the labor wages and material costs paid by a hotel should not be included in the cost of the completed project of Building 4, and they are superimposed into the total cost of the project later determined, which obviously increases the payment liability of the hotel of the employer. "The prosecutor undertaking the case believes that the appraisal agency has explained the disputed issues, and there is new evidence to prove that the appraisal agency's determination that the appraisal agency's determination that the cost of more than 1.98 million yuan for the completed construction of Building 4 does not include the material costs and labor wages advanced by a hotel, is indeed erroneous, and should be supervised and corrected. On June 20, 2022, the Lanzhou Municipal Procuratorate filed a protest with the Gansu Provincial High Court on the case.
The retrial court is in session.
On January 30, 2023, the Gansu Provincial High Court ordered the Lanzhou Intermediate Court to retry the case. The Lanzhou Intermediate People's Court held a trial and adopted the procuratorate's protest opinion, holding that the increase in the project cost outside the decoration contract of Building 3 and the specific amount of the completed project cost of Building 4 had not been ascertained as the basic facts of the case, and the original judgment was improper, and ruled on May 30, 2023 to revoke the original judgment and remand to the Yuzhong County Court for retrial.
The procuratorate appoints personnel to attend the retrial court and express a prosecutorial counter-appeal.
On October 16, 2023, the Yuzhong County Court ruled that a hotel should pay more than 610,000 yuan to a decoration company. Dissatisfied, a hotel appealed to the Lanzhou Intermediate People's Court.
On March 12, 2024, the Lanzhou Intermediate People's Court made a final judgment that a decoration company returned more than 100,000 yuan of overpaid project money to a hotel, rejected the counterclaim of a decoration company, and rejected other litigation claims of a hotel.
At this point, this litigation that has lasted for many years has come to an end.
■ Prosecutor's statement
Enterprises must strengthen the awareness of integrity and norms
In recent years, in various types of procuratorial supervision cases involving enterprises handled by the procuratorial organs, some market entities lack the spirit of contract, such as non-performance, improper performance, delay in the performance of the agreed content of the contract in the process of division of labor, cooperation and transactions, or weak awareness of legal risk prevention, insufficient prevention of market risks, no written contract, only oral agreement or unclear contract terms, The imbalance of rights and obligations is often caught in litigation over the years, and it is not uncommon for some economically weak enterprises to be dragged down by lawsuits and compensated for huge economic losses.
In the process of performing the contract, a hotel did not pay the progress payment of the project in a timely manner, and the building 3 project was put into use without timely completion and acceptance, and there were many problems in communication, coordination and cooperation with a decoration company, which led to the delay of the building 4 project under the effect of succession, intersection or joint action. In such a case, it is indeed difficult to distinguish between the liability of each party for breach of contract for delay and the amount of loss suffered as a result. Since then, the two parties have been mired in litigation for many years due to the court's misunderstanding of the appraisal agency's reply.
In the course of handling this case, the procuratorate ascertained the facts in accordance with the law through in-depth investigation and verification, and returned fairness and justice to the parties. After the case is concluded, it extends the scope of performance of duties in response to the problems reflected in such cases, and actively carries out activities such as bringing legal services into enterprises, business circles, and parks, using cases to explain the law, and enhancing the awareness of integrity and norms of enterprises and their internal personnel. The procurator handling the case also actively summarized and analyzed the common problems in the fields of enterprise-related cases such as enterprise bidding, qualification lending and subcontracting, illegal subcontracting, contract signing and performance, project payment settlement, project claims, and fund accounting, and sorted out the common problems through individual cases, and formed a procuratorial plan with reference value, so as to provide help and reference for enterprises to improve their management systems, enhance their risk prevention and control capabilities, and standardize market operations.
(Source: Procuratorate Daily, Minsheng Weekly Author: Nan Maolin, Hao Xiaoxia)