Frome Central builder Kyren Group suing subcontractor Synergy Construct for $4.89m

South Australia’s tallest building is at the centre of a multimillion-dollar legal claim involving two prominent Adelaide firms.

The 135m-tall Frome Central tower, at left, is at the centre of a $4.89m legal claim.

South Australia’s tallest building is at the centre of a multimillion-dollar legal claim involving two prominent Adelaide firms.

Kyren Group, developer of the 135m-tall $150m Frome Central Tower One building is suing building company Synergy Construct for $4.89m for alleged breach of contract relating to the construction of the East End apartment and hotel tower.

But Synergy Construct has asked the Supreme Court to dismiss the claim.

In its statement of claim lodged in October, Kyren Group says it hired Synergy to supply and install the facade of the building, which includes the Adelaidean apartments, for $8.2m.

Kyren has paid $7.891m to Synergy for the agreed works, according to its claim.

Kyren has accused Synergy of not carrying out works as agreed, not completing the work on time, and is seeking damages for an alleged 118-day delay in the opening of the 36-storey building, which includes a Crowne Plaza Adelaide hotel.

Kyren alleges that it has become liable to pay $2.445m to Frome Central property owner Eckersley for costs that company – which is part of the Kyren Group – incurred in failing to open the building on time.

Among the alleged costs include $833,333 in interest incurred in settling apartments, $54,379 for insurance, $183,211 for statutory charges such as council rates and land tax, $880,000 for hotel staff wages and $495,000 in lost revenue.

The Frome Central Tower One. Picture: Tom Huntley

Kyren Group managing director Theo Samaras at the topping out ceremony for the Adelaidean apartments and Crowne Plaza project on Frome St. Picture: Brenton Edwards

Kyren’s $4.89m claim against Synergy also includes $1.845m for unfinished or defective work and $840,000 for liquidated damages, which a subcontractor can be liable to pay for delays in finishing work.

In its claim Kyren says the construction contract was formed between March 21, 2018 and May 5, 2018 but a “written contract was never executed”.

It says an updated construction program required that Synergy’s works were to be finished by July 8, 2019.

Kyren says its main building contract with Eckersley required the building be completed by January 9, 2020 but that the building was not fit for occupation until May 5, 2020.

“This reflected a delay of 118 days which was caused by Synergy’s failure to complete the updated construction program,” it claims.

Synergy’s lawyers are yet to file a defence in the matter but lodged an interlocutory application on December 1 seeking to strike out Kyren’s claim.

The interlocutory application has been listed for a February 1 hearing.

Synergy Construct recently completed the GSA Australia student housing tower on the corner of Frome St and North Tce and is building the Switch student housing tower on North Tce, the $75m Coles Norwood and apartment redevelopment and the Vibe Hotel on Flinders St.