The builder of the Royal Adelaide Hospital has been ordered to pay a Chinese sub-contractor $1.9m
THE builder of the new Royal Adelaide Hospital has been ordered to pay $1.9 million to the Chinese cladding contractor it engaged on the project.
THE builder of the new Royal Adelaide Hospital has been ordered to pay $1.9 million to the Chinese cladding contractor it engaged on the project.
Following a dispute over payments between Hansen Yuncken Leighton Contractors (now CPB Contractors) and Yuanda Australia, the Supreme Court has upheld the decision of an adjudicator who was brought in to settle the matter earlier this year.
In 2012, Yuanda was awarded a $64.8 million contract to deliver facade works on the hospital.
However claiming the works missed their deadline, the HYLC joint venture later imposed liquidated damages of $6.48 million on Yuanda for the period from March to July 2015.
Under the terms of the contract, damages were charged at $66,349 a day - capped at 10 per cent of the contract price.
HYLC recovered $4.4 million through bank guarantees, but at the time of the adjudication claimed it was still owed the remaining $2.1 million.
In April this year, Yuanda issued a payment claim of $7.8 million to HYLC, but HYLC claimed that it was instead owed $592,029.
An adjudicator was brought in, and in July determined that HYLC pay $1.9 million to Yuanda.
HYLC argued in the Supreme Court that the adjudicator incorrectly used the $4.4 million of recovered damages in his calculations rather than the total damages amount of $6.48 million.
However, Justice David Lovell supported the adjudicator's argument that HYLC failed to include the full amount in its own payment schedule submission.
“HYLC did not include the balance of unpaid liquidated damages in its calculation of the scheduled amount,” he said in his judgement.
“The failure to include the amount of $2,063,074.12 in the scheduled amount meant that the adjudicator was not required to consider it in his calculations.
“In my view that is fatal to HYLC’s argument.
“The evidence establishes, clearly in my view, that the adjudicator had, in fact, not made a clerical error, material miscalculation or an error arising from an accidental slip.”