Inside the Whistler St carpark $74 million lawsuit
DEVELOPERS claiming $74 million in losses over a failed Sydney carpark plan argue a series of actions taken by the council breached a development deed leading to the project’s downfall.
Manly
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DEVELOPERS claiming $74 million in losses over the failed Whistler St carpark plan argue a series of actions taken by the council breached a development deed leading to the project’s downfall.
But Northern Beaches Council has made a series of counter claims, questioning the legality of the deed and the Manly Council meeting at which the tender was approved.
And if the deed was valid the council said there would have been several breaches by Built Development and Athas Holdings.
In Supreme Court documents obtained by the Manly Daily, Built-Athas claim the Northern Beaches Council “ceased to perform its inherited obligations” when it “wrongly purported to terminate” the deed.
In August 2016 then-council administrator Dick Persson scrapped former Manly council plans to build a carpark under Manly Oval to be paid for by a 99-year lease on the Whistler St site.
Built-Athas planned to redevelop the Whistler St carpark and library into units, retail and a top-floor public library.
The plans were scuttled due to the results of a review ordered into the developments.
Court documents state that eight days after the review was ordered, former Manly council general manager Henry Wong met the developers.
At the meeting Built-Athas say it was agreed they would instruct their lawyers to prepare a lease. They argued the lease was to be provided to the council for consideration.
But the council has argued it “does not know the purpose the meeting”.
A number of clauses in the deed had time limits on them, including: the deed could be terminated if a lease was not agreed on by July 26, 2016. But a meeting between former Manly council lawyer James Ng and Built-Athas occurred the day before the deadline where an extension was granted to September 6, making exiting the lease hard.
The council argues that Mr Ng “did not have the authority” to give an extension.
Lawyers for Built-Athas state the council broke clauses in the development deed including one which called for both parties to: “Co-operate, act in good faith and use its best endeavours” to ensure the project’s success. It stated both sides should not “unreasonably delay any action, approval, direction, determination or decision” and be “just and faithful in all its activities”.
Built-Athas claim the council’s actions in ordering reviews, cancelling the Manly Oval carpark and a repeated unwillingness to negotiate a lease, breached this clause.
The council has denied the deed agreement “obliged the parties to negotiate”.
Defence documents say the council was “not given reasonable time in which to consider and respond to the developer” about the lease agreement prior to the expiry date and was entitled to take a “reasonable amount of time”.
It presented written correspondence between the council and Built-Athas which expressed no complaints about the length of time the council was taking to review the agreement, nor that it had breached the deed.
Council lawyers argued a new company, called Built Development (Manly) Pty Ltd, was established after the tender was approved and the successful tenderer was Built Development Group Pty Ltd.
Therefore Mr Wong “in purporting to execute a deed with entities different to the tenderer, acted contrary to the authority delegated to him” by councillors making the deed “invalid and of no effect”.
Council lawyers claim there was supposed to be a payment delivery schedule — for $47.6m cash and in-kind — agreed upon by 90 days of the deed being awarded, which they say did not happen. It would mean the council was within its rights to terminate the deed. But Built-Athas say they provided a payment plan on July 22, 2016.
In the court documents, council lawyers said the council had the right to refrain from any possible unlawful activity that would breach its obligations.
“Council held reasonable concerns that the deed and the transactions contemplated by it may be unlawful, such that the deed was void and unenforceable,” the lawyers said.
This pointed to the April 12 Manly Council meeting which the Office of Local Government has previously alleged breached the Local Government Act for, among other things, closing it to residents.
Council also argues the two developments should have been treated as a private public partnership, meaning it would need approval of a State Government committee.