Developer cops blame

Parliament Square owner loses bid to reclaim $5m penalty

THE property developer behind the Parliament Square project has failed a legal challenge to avoid paying builder Hansen Yuncken more than $5 million in contract delay and variation costs.

The $200 million “landmark project” in the block behind Parliament House, which will feature government office spaces, open public areas, shops, cafes and a luxury Marriott hotel named The Tasman, is expected to be complete by the end of this year.

Citta Property Group purchased the site from the State Government in December 2014, entering into a contract with Hansen Yuncken to execute stage one of the project — constructing the mixed-use Salamanca Building.

In June last year, Hansen Yuncken served the landowner with a payment claim for more than $7 million for delay, variation and extension of time costs.

Following an adjudicator’s determination, the landowner handed over more than $5 million a few months later.

But it then applied for the determination to be quashed by the Supreme Court of Tasmania, asking a restitution order be made.

The Parliament Square landowner argued a number of grounds, including that $920,000 in delay costs were awarded to the builder without sufficient evidence.

It also argued the adjudicator didn’t have jurisdiction to make his determination, that some of the costs were awarded on an “irrational basis”, and that Hansen Yuncken had breached some of their contract provisions.

But in his newly-published judgment, Justice Stephen Estcourt discharged the order, saying the landowner had failed to make its case.

He said Hansen Yuncken was entitled to claim for the extra costs under the contract, and disagreed that the adjudicator had made errors or formed a determination outside his jurisdiction.

“In these circumstances, no illogicality or denial of procedural fairness arises,” he said.

The Parliament Square landowner also failed to prove it shouldn’t have to pay the adjudicator’s $84,260 fee.