Xie Guoyou felt helpless. He took a stake in bidding for a piece of land with a price of nearly 200 million yuan in Nanchong City, Sichuan Province. However, after starting the development, he found that the land was still controversial before the auction: Nanchong City Land and Resources Bureau was accused of "selling one place for two".
In 2011, Nanchong Xinda Real Estate Development Co., Ltd. (hereinafter referred to as "Xinda Company") won the land and signed a land transfer contract with Nanchong Land and Resources Bureau. Later, due to the debt dispute between the two parties, Nanchong Land and Resources Bureau dissolved the land transfer contract on its own, and in 2013, it sold the land to Nanchong TEDA Real Estate Company (hereinafter referred to as "TEDA Company"), in which Xie Guoyou was a shareholder.
Xinda Company therefore sued Nanchong Land and Resources Bureau for "one place for two sales" and colluded maliciously with TEDA Company. The lawsuit lasted for more than two years, and the land was seized, so the development process of TEDA company stopped.
September 29, 2016,According to the final judgment of the Supreme Court, Nanchong Land and Resources Bureau’s termination of the contract with Xinda Company is a fundamental breach of contract, that is, the breach of contract caused by its intentional behavior, and there is no malicious collusion with TEDA Company.At the same time, it is determined that the land transfer contract signed by Xinda Company and TEDA Company on the same plot is valid.
In the years of litigation tug-of-war, the local real estate market has already fallen from the peak to the trough, and both companies have paid a huge price for it, and Nanchong Land and Resources Bureau is even more tired of coping with it.
On December 7th, the staff of Nanchong City Land and Resources Bureau responded to The Paper, saying that it was unclear about the fact that the Land and Resources Bureau was judged to be in fundamental breach of contract, so it was impossible to provide more information.
The land invested by nearly 200 million was seized.
Nanchong land and resources bureau. The pictures in this article are all from The Paper reporter Xu Hui.
Recently, Xie Guoyou, a minority shareholder of TEDA Company, and others went to Nanchong Land and Resources Bureau as soon as they had time, demanding to solve the economic losses caused by "one place and two sales".
On November 30th, The Paper learned from Nanchong City Land and Resources Bureau that the Bureau proposed two solutions to solve the problems of TEDA Company: "First, terminate the contract, and the government will refund the land payment and compensate the losses. The second is to continue to perform the contract, and the government will compensate the related losses through certain preferential policies. "
Xie Guoyou and others prefer the second scheme. "To make the Land and Resources Bureau pay hundreds of millions of dollars in cash, and I don’t know when it will be, it is also helpless to choose the second plan. After all, the real estate market is not what it used to be." Xie Guoyou said.
On December 6th, Xie Guoyou told The Paper that they were discussing the details of the scheme with Nanchong Land and Resources Bureau, but the key still needed the approval of the government and planning departments. If all goes well, the development projects that were stopped more than two years ago because of Nanchong Land and Resources Bureau’s "one place and two sales" can be restarted.
Xie Guoyou and other shareholders are waiting for a reply in the office of Nanchong Land and Resources Bureau.
According to Xie Guoyou, in May 2013, Nanchong City Land and Resources Bureau published a land transfer information in the local media, and publicly auctioned the No.1 plot of Wangtianba in Shunqing District of Nanchong City. Sichuan Century Antai Co., Ltd. and an independent investor named Lin Ying finally won the land. The land transfer contract signed by the two parties shows that the buyer finally won 352,995 mu of land at a high price of 5.62 million yuan per mu, with a total price of nearly 200 million yuan.
Xie Guoyou said that in fact, Century Antai Company and Lin Ying are followed by a large group of investors. They are all relatives, friends and acquaintances. Together, they have raised money to win this land. There are more than 100 large and small shareholders, and each person’s investment ranges from several million to tens of millions. After winning the land, they registered TEDA company in Nanchong and developed and built it in the name of the company.
"We have set up a board of directors and a management team, and geological prospecting, earthwork excavation and transportation have all started." Xie Guoyou said, but in April 2014, Xinda Company sued Nanchong Land and Resources Bureau to the Sichuan Higher People’s Court on the grounds that Wangtianba No.1 was "sold in one place", and at the same time listed TEDA Company as the second defendant on the grounds of "malicious collusion", and the above land was immediately seized by the court.
"At this time, we realized that this land was sold to Xinda Company before it was sold to us. We auctioned a disputed land at a high price." Xie Guoyou said.
Land and Resources Bureau auctions disputed land.
In July 2014, the Sichuan High Court held two sessions to hear the above-mentioned "one place and two sales" case. According to the judgment made by the institute, on August 26th, 2011, Xinda Company won the Wangtianba No.1 plot through public bidding, paid a deposit of 13 million yuan, and signed the Confirmation of Auction of State-owned Construction Land Use Rights with Nanchong Land and Resources Bureau. However, Xinda company has not paid the land transfer fee.
The reason is that Xinda Company participated in the "Xihe Comprehensive Improvement Project" in Nanchong City in 1998, and Nanchong Municipal Government issued a document promising that investment in this project can give priority to the land development right or land use transferee right of Xihe Community, and convert the land evaluation value to offset the project construction funds.
The above judgment shows that after Xinda Company completed the project, Nanchong City Land and Resources Bureau has been delaying the settlement of the flood dike project, unable to evaluate the project construction funds, so Xinda Company has been unable to enjoy this preferential policy for a long time. Until 2006, Xinda Company filed a lawsuit with Nanchong Intermediate People’s Court, and deducted 32.05 million yuan from the government project. At this time, compared with 1998, the land price has soared more than 10 times, and only the project funds of that year offset the current land price. Xinda Company thinks that it has not enjoyed the preferential policies promised by the government.
In 2010, Xinda Company filed a lawsuit with the court, and Nanchong Intermediate People’s Court immediately made a judgment (2010) No.56, requesting Nanchong City Land and Resources Bureau to convert 57.31 mu of land to Xinda Company at a price of 470,000 yuan per mu at a total price of 26 million yuan.
In 2011, after winning the Wangtian No.1 plot, Xinda Company sent a letter to Nanchong Land and Resources Bureau, proposing that Wangtian No.1 plot and Land and Resources Bureau offset each other’s debts according to the above judgment, and Xinda Company would not pay the rest land transfer fees. But this has not been recognized by the land department.
On December 13th, 2011, Nanchong Land and Resources Bureau filed a lawsuit in Nanchong Shunqing District Court, requesting the court to confirm that Xinda Company’s letter "Offset the transfer fee of Wangtianba No.1 plot according to the content of (2010) South China Law Minchuzi No.56" was invalid. Xinda Company filed a counterclaim, which was rejected by Shunqing District Court, and Xinda Company refused to accept the appeal to Nanchong Intermediate People’s Court.
During the appeal of Xinda Company, the Bureau of Land and Resources sent a letter on the grounds that Xinda Company failed to pay the land transfer fee within the time limit, canceling the transfer contract between the Bureau and Xinda Company on Wangtianba No.1 plot, canceling the Confirmation of Transaction and confiscating Xinda Company’s 13 million bid bond.
On May 27th, 2013, Nanchong City Bureau of Land and Resources issued an announcement to re-list and auction Wangtianba No.1 plot, which was later won by TEDA Company.
When TEDA Company got enough land and started to develop and construct projects, Xinda Company sued Nanchong Land and Resources Bureau and TEDA Company to the Sichuan Provincial High Court.
Oddly, on May 21, 2014, Nanchong Land and Resources Bureau withdrew the lawsuit filed with Shunqing District Court.
In addition, Nanchong Land and Resources Bureau appealed to Sichuan High Court on February 19, 2012 against the judgment of (2010) South China Law Minchuzi No.56. On February 19, 2014, Sichuan High Court revoked the judgment and sent it back to Nanchong Intermediate People’s Court for retrial.
On August 31, 2016, the Sichuan Higher People’s Court made a final judgment, and found that the preferential policies that Xinda Company agreed to enjoy when it participated in the comprehensive improvement project of Xihe River had not been implemented, but Xinda Company should advocate "fault liability in contracting" instead of asking the Land and Resources Bureau to fulfill the contract to deliver the land and compensate for the losses caused by the delayed delivery of the land.
"Fundamental breach of contract" by Land and Resources Bureau
The "Wangtianba No.1 Plot" that has been involved in lawsuits has been idle for many years, and now it is overgrown with weeds.
Xinda Company claimed that Nanchong Land and Resources Bureau and TEDA Company colluded maliciously, which made TEDA Company illegally acquire the plot. Request the court to judge Nanchong Land and Resources Bureau to perform the land transfer contract and deliver Wangtianba No.1 plot to Xinda Company; At the same time, it is determined that the land transfer contract signed by the Bureau of Land and Resources and TEDA Company is invalid.
The Sichuan Higher People’s Court found in the first instance that TEDA Company did not have malicious bidding and there was no malicious collusion with Nanchong Land and Resources Bureau. Moreover, the contract between Nanchong Land and Resources Bureau and Xinda Company is no longer possible to be fulfilled. However, after Nanchong Land and Resources Bureau sued Xinda Company for failing to pay the land transfer fee and asked the court to confirm that the land transfer contract was invalid, it was declared that the dissolution of the land transfer contract with Xinda Company constituted a fundamental breach of contract and the dissolution was invalid. Therefore, the Land Transaction Confirmation signed by Nanchong Land and Resources Bureau and Xinda Company is still legal and valid.
In law, fundamental breach of contract refers to the breach of contract caused by the intentional behavior of the breaching party. If one party breaches the contract fundamentally, the other party may claim to terminate the contract and claim damages.
At the same time, the Sichuan Higher People’s Court also found that Nanchong Land and Resources Bureau signed the "Transaction Confirmation" with TEDA Company in 2013, which was also legal and valid. Therefore, Xinda Company’s accusation that its malicious bidding and contract are invalid is untenable and rejected.
Nanchong Land and Resources Bureau and Xinda Company both refused to accept the judgment of Sichuan High Court and appealed to the Supreme Court. On September 29, 2016, the Supreme Law made a final judgment, dismissed the appeal and upheld the original judgment. At the same time, it is pointed out that because Xinda Company did not make compensation for the fundamental breach of contract of Nanchong Land and Resources Bureau in this case, this issue is not within the scope of acceptance and will be solved by both parties separately.
In October 2016, TEDA Company began to investigate the compensation liability from Nanchong Land and Resources Bureau after receiving the final judgment of the Supreme Law. Xie Guoyou said that from 2013 to now, although it was only three years, it was not easy to solve it. What is even worse for them is that after 2013, the real estate market in the whole second-and third-tier cities began to shrink, and the house price and land price in Nanchong all declined. Now, if we continue to perform the contract, we will lose even more. However, after a month or two of stalemate with Nanchong Municipal Government, on November 30th, they chose to continue to perform the contract.
"It is better to let the government give some preferential conditions and return the money by continuing to perform the contract." He said that the Bureau of Land and Resources would not have to refund them 200 million yuan of land money, but he also thought that they needed to pay extra compensation in order to recover the losses to the greatest extent.