Lendlease steps into Grocon battle

Grocon faced off against a new opponent in its $270m legal battle against state development authority Infrastructure NSW.

Lendlease steps into Grocon battle. Picture: Christian Gilles

Beleaguered developer Grocon faced off against a new opponent in its $270m legal battle against state development authority Infrastructure NSW as global giant Lendlease intervened in the legal case.

Grocon, with third generation property scion Daniel Grollo at the helm, last week declared that it would seek out administrators for its legacy construction arm.

The company claimed it had been pushed to the brink by the “unconscionable conduct” of the NSW development arm and is pursuing the legal action even as it readies administrators for parts of its empire.

The legal skirmish in the NSW Supreme Court is part of Grocon’s long running dispute with the government agency after the body settled a dispute with Lendlease and James Packer‘s Crown Resorts in August 2019.

The deal – the terms of which remain secret – protected the pair’s sightlines in a broad vista stretching from the Sydney Harbour Bridge to the Sydney Opera House, from their luxury towers in Barangaroo South.

That deal scuttled Grocon’s plans for a tall skyscraper at neighbouring Central Barangaroo and it claimed it was later forced to sell out at a discount to Chinese backer Aqualand.

Grocon also claims to have missed out on a windfall from onselling a proposed office tower to Canada’s Oxford Properties Group due to the development agency’s actions.

However, some property players have questioned whether the transaction would have been completed as it was also subject to approval by Aqualand and retail partner the Scentre Group.

Lendlease intervened in the case arguing the terms of the settlement deed should be kept confidential and Justice Patricia Henry indicated at the conclusion of the hearing the document would likely form part of discovery in the case although she indicated there would also be limits placed on its distribution.

Grocon has argued the settlement deed is central to its case as it was cut out of negotiations in the wake of the development authority losing an initial case over the views to Lendlease and Crown.

The legal battle is the one of the last major hopes for Grocon, which has been rocked by a dispute on a stalled site in the Melbourne suburb of Collingwood..

The company says it is at loggerheads with developer Impact Investment Group and subcontractors owed up to $8m. It also claims to not have been paid since May. Impact disputes the claims.

In Sydney, Chinese-backed Greaton has been undertaking an extended review of how it will complete the $730m The Ribbon project in Darling Harbour that Grocon has been building.

In court Grocon argued the deed was expected to have a significant impact on the building heights for Grocon’s Central Barangaroo project.

The deed was signed prior to what Grocon describes as its “forced” exit from the precinct. It said a notice of resolution of the crucial sightlines dispute was issued to Aqualand just 24 hours after Grocon exited the project in September 2019, meaning it missed a windfall on the Oxford deal.

Grocon had been requesting the resolution notice for several years and says INSW had promised to provide it to Grocon on numerous occasions. It said the state body was also well aware of the discounted sale of the development rights to Aqualand.

It was also revealed to the court that INSW has indemnified Crown and Lendlease against certain third-party legal action by Grocon. Lendlease and the state body have argued for both confidentiality of the deed and of the indemnity.

Justice Henry gave the court an “indication” that her view was the deed was “discoverable” but that it should not be produced unredacted to Grocon. She said dollar figures and a sensitive provision should be redacted.