Midwater Main Beach: Inside the multimillion dollar building dispute that ignited a tinderbox

A recent court decision has shed new light on the multimillion dollar dispute between two companies that led to work being paused on a $100m, 40-storey apartment development at Main Beach late last year.

The $100m Midwater development at Main Beach has been the subject of a multimillion dollar dispute between owner York Property, a subsidiary of the Heran Group, and builder Tomkins. Picture: Glenn Hampson

The builder of a 40-storey, $100m Main Beach residential tower and the project’s owner remain locked in a multimillion dollar dispute over money owing following the contract’s purported termination, which left construction in limbo for several months.

Work ceased on York Property’s (a part of the Heran Building Group) 119-unit Midwater tower last August following a dispute with head contractor Tomkins.

Work resumed in November, when York appointed related entity Heran Construction to complete the project, the completion date for which is still unclear.

A recent decision of Supreme Court of Queensland Justice Rebecca Treston has shed new light on the dispute between York and Tomkins, with millions of dollars in payments at stake for the parties.

The dispute commenced on August 29 last year, when Tomkins served upon York a claim of $43,063,649.46 in progress payments, a figure which was disputed by York.

Several days later, on September 3, police were sensationally called to the site amid claims, denied by the developer, that Tomkins staff had been locked inside the gates in a bid to prevent them removing tools.

York terminated the contract on September 10, alleging there had been a “substantial breach” of the contract.

The breach of contract is disputed by Tomkins, who sought to have the payment adjudicated by Chris Lenz under the Building Industry Fairness (Security of Payment) Act 2017, Justice Treston said.

Builders collecting tools and equipment , being watched by security, and leaving the Midwater building site at Main Beach after the contract between York Property and Tomkins was purportedly terminated. Picture: Glenn Hampson

On February 14 this year Mr Lenz ruled York owed Tomkins, which modified some aspects of its payment claim and abandoned others, $16,825,279.17, having considered more than 26,000 pages of material, including approximately 11 affidavits and 12 expert reports.

The money remains unpaid, as York contended the adjudicator, Mr Lenz, had calculated wrongly, nullifying his decision.

At the heart of the dispute is work performed by Tomkins on the building facade, comprising curtain walls, windows and doors.

Tomkins claimed $11,832,295.38 for this aspect of the build, on the basis the work was 73 per cent complete, but York said it owed nothing because the facade was “entirely defective, and the cost of rectification was at least equivalent to the value which Tomkins had claimed,” Justice Treston said.

Tomkins, for its part, said this allegation was “baseless” and asserted that the facade had not deviated from “approved shop drawings and physical samples”.

Mr Lenz, the adjudicator, ruled that the $11.8m was in fact owed by York for work on the facade, but it was here he erred, Justice Treston found, because buried in Tomkins’ submissions was a concession that $3.7m of the amount claimed, comprising the value of unfixed materials, was not being pursued under the adjudication.

A completion date for the $100m Midwater development at Main Beach is yet to be set. Picture: Glenn Hampson

As such, the disputed amount for the facade was $8.1m, not the higher amount of $11.8m.

Although Justice Treston found Mr Lenz was not at fault, because York in its submissions repeatedly asserted the disputed amount was $11.8m, not $8.1m, she ruled his adjudication was invalid.

According to Justice Treston, York and Tomkins are now set to make further submissions before she makes a final order binding the parties.

In a statement, a spokesman for York Property said it is yet to confirm a new date for completing the tower, although construction was “progressing well”.

The basement is complete, all services installed up to level seven, and the structure has been poured up to level 38, with only three more slabs to be poured.

The fit-out for levels 4–19 is underway, as is floor sheeting on levels 5–7, with new sheeting on other levels commencing “every seven to 10 days,” the spokesman said.

Next month, the automated carparking system will commence, as will the structure on level three to support the pool.

The spokesman said no unit contracts had been cancelled via the use of sunset clauses, nor had any price adjustments occurred for buyers.

“The response from apartment holders about our progress has also been very positive and we have committed to keeping them informed,” he said.

Originally published as Midwater Main Beach: Inside the multimillion dollar building dispute that ignited a tinderbox