Mould, lead paint, $15m fit-out budget in bitter Queen’s Wharf legal stoush

A bitter falling out between the developer of the $3.6b Queen’s Wharf and its luxury retail anchor tenant has triggered a $24m lawsuit.

The Printery building prior to redevelopment

A bitter falling out between the developer of the $3.6b Queen’s Wharf development and its luxury retail giant anchor tenant who pulled out of a deal to lease the retail outlets has triggered a $24m lawsuit.

DFS Australia Pty Ltd, which is majority-owned by the world’s largest luxury conglomerate Moet Hennessy Louis Vuitton, including Louis Vuitton and Dior, has sued the developer of Queen’s Wharf in Brisbane Supreme Court.

It alleges Destination Brisbane Consortium Integrated Resort Operations Pty Ltd misled it into spending $15m on lavish retail fit-out works in the heritage “Old Printery” building last year, when in fact the building was not ready to be handed over when it received the keys in late 2022 because it was contaminated by flaking lead paint and mould.

DFS, which was set to open a three-level T Galleria Emporium in the historic Printery Building on George St, also alleges that after it pulled out of the lease deal, Destination Brisbane wrongly kept its $US6m ($9m) bank guarantee, lodged as part of its plan to be a retail tenant at the Queen’s Wharf site, but Destination Brisbane says it was entitled to call on the guarantee money.

The first stage of Queen’s Wharf opened recently. Picture: Star Casino

The Printery building, which boasts 2500sq m of floor space, was earmarked for a luxury retail store such as Louis Vuitton, Dior, Cartier or Gucci.

DFS alleges Destination Brisbane misled it because Destination Brisbane claimed that mould which had been present in the printery had been removed and that lead abatement works were complete, when DFS alleges lead was found in samples of paint which had not been painted to provide encapsulation and mould was also allegedly present.

But in its defence Destination Brisbane claims that in August 2022 HazSure certified that the lead paint management works carried out by Destination Brisbane’s builder Multiplex were satisfactory and that one consultant, McKenzie Group in September 2022 confirmed that the printery building was in a suitable condition for DFS to start their fit-out work.

Destination Brisbane alleges in its defence that if DFS truly believed that the Destination Brisbane had not satisfied the contractual handover conditions for the printery building then DFS was not obliged under the lease to lavish more than $15m on its fit-out work, so Destination Brisbane should not be held liable for this outlay.

Spending included $10.8m paid to construction contractor Built, $1.4m to millwork supplier Shanghai Atelier Elements Furniture and $146,000 in fit-out materials from lighting supplier Euroluce, the claim states.

A Louis Vuitton luxury retail store

In its cross claim Destination Brisbane argues that DFS misled it by claiming that it would secure at least one of – Louis Vuitton, Dior, Cartier or Gucci – as retail anchor tenants outlets in the QW when in fact it “could not secure Louis Vuitton, Dior, Cartier or Gucci as tenants”.

Destination Brisbane argues it would never have given the anchor lease to DFS if it knew they couldn’t secure the prestige marques and it is seeking unspecified damages for misleading and deceptive conduct and breach of contract.

Destination Brisbane claims it should be compensated for the loss of rent by DFS when it could have instead signed other luxury tenants directly.

Destination Brisbane alleges in its cross-claim for damages that QW was intended to be home to top-tier international luxury retailers such as Louis Vuitton, Dior, Prada and Chanel as part of its aim to be a world class resort and visitor attraction offering entertainment, shopping and high quality public spaces.

A Dior store

Destination Brisbane alleges that before they entered into the lease agreement DFS bosses boasted that it had longstanding and successful relationships across the world with Louis Vuitton, Cartier, Gucci, Tiffany and Co, Bvlgari which meant that these luxury retailers trusted DFS and would join DFS as part of the QW project.

DFS says it terminated the agreement for lease on December 7, 2023 under the sunset clause which allows them to terminate the lease if the QW building works have not reached the stage where they satisfy the landlord’s handover condition.

But Destination Brisbane alleges that it, not DFS, terminated the agreement for lease on January 30 this year.

No date has been set for hearing.

Originally published as Mould, lead paint, $15m fit-out budget in bitter Queen’s Wharf legal stoush