Business & Economy

R-II Builders’ right to collect P4.5B over Smokey upheld by SC

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The Supreme Court has upheld the right of a construction company owned by real estate mogul Reghis Romero II to collect P4.5 billion from the government as settlement for its controversial housing project on the Smokey Mountain dump in Tondo, Manila.

In a notice issued last week by clerk of court Edgar Aricheta, the tribunal’s First Division threw out for lack of merit the petition filed by the HomeGuaranty Corp. (HGC) and the National Housing Authority (NHA) that questioned the attempt of R-II Builders Inc. to recover the amount for the botched Smokey Mountain Development and Reclamation Project (SMDRP). 


Separate rulings

The high court affirmed the separate rulings issued by the Court of Appeals (CA) on Sept. 4, 2015, and Jan. 7, 2016, which voided the decision of the Quezon City Regional Trial Court (RTC) to junk the civil case filed by Romero’s construction firm against HGC and NHA in 2012.

It also ordered the Quezon City RTC to resume the trial of the case and render judgment based on the evidence to be presented by the opposing parties.

“[HGC and NHA] failed to sufficiently show that the Court of Appeals committed reversible error in issuing the assailed decision and resolution,” the high court said in its July 26 ruling.

“We agree with the finding of the CA that based on the allegations in the complaint, as well as the reliefs prayed for therein, the suit instituted by respondent R-II Builders was a personal action because its primary objective was the rescission of certain agreements,” it said.

The tribunal said the two state-owned housing agencies erred when they insisted that the civil suit should have been dismissed outright since the high court tossed out a similar case in 2011, saying the two cases involved different matters.

“[T]he issues and the causes of action raised in the complaints filed in the two cases are different, thus rendering both doctrines of res judicata and the ‘law of the case’ inapplicable,” it said.

“We do not find any merit either in petitioners’ assertions that the instant case must be deemed barred by res judicata and the ‘law of the case’ principle in light of this court’s earlier decision,” it added. 


Housing for Tondo’s poor

During the Ramos administration, R-II signed a joint venture agreement with the NHA for building the SMDRP, which was envisioned to turn the dump into a portside community to provide decent housing to 3,000 families.

The project, however, led to a string of legal cases involving R-II Builders Inc., HGC and NHA after Romero’s company entered into an asset pool arrangement with several government financial institutions, including HGC, when it ran out of money to complete the project in 1994.

On May 25, 2010, then Vice President Noli de Castro asked then President Gloria Macapagal-Arroyo to settle the financial claims of R-II as requested by former NHA General Manager Federico Laxa. –


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