On termination of contracts and on recovery of damages under a construction contract
Case No. 7515-23-00-2/2203 dated November 13, 2023
The Zhetysu District Court of Almaty, consisting of: the presiding judge Baimakhanova N.E., with the secretaries of the court session Kerimbekova G.S., Mairikhova R.U., considered in open court a civil case against the Defendant K.J.K. Limited Liability Partnership "Vision Architects" for the termination of contracts and for the recovery of damages.
On September 05, 2022, between K Zh.K. (hereinafter referred to as the customer) and the Limited Liability Partnership Vision Architects (hereinafter referred to as LLP) (contractor) An agreement No. 146 was signed for the development of the interior design of an apartment located at 2 M Street, apartment 148, Almaty.
Under the terms of the agreement, the LLP undertakes to start performing contract work within 5 calendar days from the date of receipt of the advance payment. The completion date is 98 calendar days from the start of work at the facility. The total cost of the work is 4,080,000 tenge. The advance payment under the contract is 30%. The remaining 70% according to the certificates of completed works.
On November 16, 2022, the Customer and LLP signed contract No. 112-Z for construction, installation, finishing, and finishing works of an apartment located at 2 M Street, Apartment 148, Almaty, the plaintiff paid 1,224,000 tenge to the defendant. However, the work was not completed within the agreed time frame.
According to the conclusion of specialist No. 25/2023 dated May 10, 2023, the construction work carried out by LLP does not comply with the building codes and regulations of the Republic of Kazakhstan. The cost of restoration works is 4,797,461 tenge.
Requests to satisfy the claims, terminate contract No. 146 dated September 05, 2022, terminate contract No. 112-Z dated November 16, 2022, and recover from the LLP the amount of damages in the amount of 6,871,461 tenge.
At the hearing, the plaintiff and her representatives, having supported the arguments indicated in the claim, asked to satisfy the requirements.
The defendant's representative acknowledged the claims at the hearing, explaining that the work had not been completed and was obligated to pay the plaintiff the amount of damages. However, the court was not provided with a statement of recognition of the claim.
The third person, M. R., duly notified of the time and place of the case consideration, did not enter a video link, did not report the reasons, the court found the reason for non-appearance (non-participation) disrespectful, and on the basis of part 4 of Article 196 of the Civil Procedure Code of the Republic of Kazakhstan (hereinafter - CPC) considered the case in his absence.
On demand No. 1
The legal relations of the parties that have arisen are subject to regulation by the norms of Chapter 32 of the Civil Code of the Republic of Kazakhstan (hereinafter referred to as the Civil Code) on the contract.
In accordance with Article 616 of the Civil Code, under a work contract, one party (contractor) undertakes to perform certain work on behalf of the other party (customer) and deliver its result to the customer within the prescribed period, and the customer undertakes to accept the result of the work and pay for it (pay the price of the work).
According to paragraph 1 of Article 401 of the Civil Code, modification and termination of the contract are possible by agreement of the parties, unless otherwise provided by this Code, other legislative acts and the contract.
The plaintiff sent the notice of termination to the defendant on July 10, 2023 at the address specified in the contract. The defendant's demands for termination of the contract were not fulfilled, which gave the plaintiff the right to terminate the contract in court.
By virtue of paragraph 2 of Article 401 of the Civil Code, at the request of one of the parties, the contract may be amended or terminated by a court decision only: 1) in case of substantial violation of the contract by the other party; 2) in other cases provided for by this Code, other legislative acts or the contract. A violation of the contract by one of the parties is considered significant, which entails such damage to the other party that it is largely deprived of what it was entitled to expect when concluding the contract.
In accordance with clause 3.1 of the agreement, the LLP undertakes to start performing contract work within 5 calendar days from the date of receipt of the advance payment. Clause 5.2.2 of the agreement defines an advance payment in the amount of 30%.
From the explanations of the parties, the court reliably established that despite the agreement between the plaintiff and the LLP on the term of payment of the advance payment and the performance of work, the construction work on the part of the LLP was not completed as stipulated in the contract.
Moreover, at the hearing, the defendant explained that the work was indeed not completed due to the fault of a third party, and that the defendant undertakes to return the money to the plaintiff.
Thus, due to the failure of the defendant's party to fulfill the terms of the contract, which relates to a material violation of the terms of the contract and compliance with the termination procedure, the claim of J.K. Kairbayeva to terminate the contract is justified and must be satisfied.
On request No. 2
According to paragraph 5 of Article 406 of the Civil Code, if the basis for termination or amendment of the contract was a material violation of the contract by one of the parties, the other party has the right to demand compensation for damages caused by termination or amendment of the contract.
The court reliably established that the plaintiff made a payment under contract No. 146 dated September 05, 2022 - 850,000 tenge, payment under contract No. 112-Z dated November 16, 2022 – 1,224,000 tenge, and the cost of restoration work, according to the conclusion of a specialist, amounted to 4,797,461 tenge. In total, the plaintiff suffered losses in the amount of 6,871,461 tenge.
By virtue of paragraph 1 of Article 63 of the CPC, evidence in a case is legally obtained information about the facts, on the basis of which the court determines the presence or absence of circumstances justifying the claims and objections of the parties, as well as other circumstances relevant to the proper consideration and resolution of the case.
Thus, the court concludes that the plaintiff's claims for recovery of damages are subject to satisfaction.
In accordance with Articles 108, 109, 113 of the CPC, the court collects documented court costs and expenses from the defendant in favor of the plaintiff.
Guided by Articles 223-226 of the CPC RK, the court DECIDED:
K.J.K.'s claim is to be satisfied in full.
Terminate the contract No. 146 for the development of interior design dated September 05, 2022, concluded between the limited liability partnership Vision Architects and K.J.K..
Terminate the contract No. 112-Z dated November 16, 2022, concluded between Vision Architects Limited Liability Company and K.J.K..
To recover from the limited liability partnership "Vision Architects" in favor of K.Zh.K. the amount of damages in the amount of 6,871,461 (six million eight hundred and seventy-one thousand four hundred and sixty-one) tenge, court costs for the payment of: state fee 72,165 (seventy-two thousand one hundred and sixty-five) tenge, specialist services 450,000 (four hundred fifty thousand) tenge, representative services 600,000 (six hundred thousand) tenge.
The party did not file an appeal against the judicial act.
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