Government pursuing case on Mile Long Arcade

MANILA, Philippines - The government would pursue its bid to evict a realty company owned by the Rufino and Prieto families from a prime land in Makati City for alleged illegal occupancy due to an expired lease agreement.

Solicitor General and concurrent Justice Secretary Agnes Devanadera said the government would oppose also the motion of Sunvar Realty Development Corp. (SRDC) seeking dismissal of a complaint for “illegal and unauthorized use and occupation” of the property formerly owned by National Power Corp. (Napocor) located between Pasong Tamo Extension and Pablo Ocampo St. (formerly Vito Cruz St.) before Makati City municipal trial court Branch 67.

Devanadera said the government would pursue the case to collect hundreds of millions in damages.

She said the initial estimates showed the SRDC owes the government almost P700 million, which covers a total of P124,368,000 in income losses of government every year from Jan. 1, 2003 to March 31 of this year.

The government has pegged the unpaid rentals running at P345,466.67 a day.

The government earlier filed an illegal detainer suit last July 23 against the company before the Makati MTC.

On Aug. 10, SRDC filed a motion to dismiss the case on the ground of lack of jurisdiction, claiming that the allegations in government’s complaint did not constitute unlawful detainer.

SRDC argued the case should fall under the jurisdiction of regional trial courts.

In a 13-page complaint, it was found that the contested land measuring 22,924 square meters was registered under an 80 to 20 percent arrangement between the government and Napocor, respectively.

On Dec. 26, 1977, it was leased by the government to the now defunct Technology Resource Foundation Inc. (TRFCI) for a period of 25 years from Jan. 1, 1978 up to Dec. 31, 2002.

TRFCI subsequently leased a portion of the property located between De la Rosa St. and Arnaiz Ave. (formerly Pasay Road) to Sunvar Realty under a sublease agreement.

In all the agreements between TRFCI and Sunvar, the latter agreed to return or surrender the subleased land, without any delay whatsoever upon the termination or expiration of the sublease contract or any renewal or extension when the agreements expired in December 2002.

During the sublease, Sunvar put up commercial buildings including the Premier Cinema, Mile Long Arcade, Makati Creekside Building, the Gallery Building and Sunvar Plaza.

Following the first EDSA revolution and the radical change in the government, on Feb. 17,1987 TRFCI was replaced by the Philippine Development Alternatives Foundation (PDAF).

On June 3, 2002, Napocor general counsel Rainier Butalid notified PDAF of its decision not to renew the contract of lease.

The government, through then Senior Deputy Executive Secretary Waldo Flores, informed PDAF that they are not renewing the contract, adding the government is planning to sell the property to raise funds.

PDAF informed Sunvar of the decision not to renew the lease on June 25,2002. However, it took the OSG six years or until Feb. 22, 2008 to advise Sunvar to completely vacate the property. A final notice to vacate dated Jan. 26, 2009 was received by the real estate firm.

“Sunvar, however, obstinately refused to vacate the subject property, and despite the lapse of the period given, adamantly continued to occupy the same up to the present,” the OSG argued.

“Due to this unreasonable refusal of defendant to vacate the property upon the lease in December 2002, plaintiffs (the government) suffered damages from the loss of use of the subject property.” the OSG added.