Star settles looming Queen’s Wharf legal battle with Multiplex

The Star Entertainment Group has settled a potential battle with construction giant Multiplex over cost blowouts at its $2.8bn Queen’s Wharf project in Brisbane.

The Star Brisbane, Queen's Wharf under construction. Picture: The Star Entertainment Group

The Star Entertainment Group has avoided a threatened legal battle with construction giant Multiplex over cost blowouts at its $3.6bn Queen’s Wharf project in Brisbane.

Star on Friday announced it had settled in the Supreme Court the looming dispute between its half-owned Destination Brisbane Consortium and Multiplex over cost overruns and delays.

The company, in an announcement to the ASX, said the amount payable by DBC to Multiplex depended on the updated project delivery date, but was expected to be between $30m to $85m. The complex is now expected to be open by August 2024, rather than the earlier announced April, and the timeline was now more certain following settlement.

Queen’s Wharf will feature four hotels with about 1000 rooms, restaurants, a casino and retail space. The Star estimated the total cost of the completion would be approximately $110m.

Star chief executive Robbie Cooke said the resolution of the long-running dispute was “a significant and positive step and removed considerable uncertainty and distraction”.

“It enables the project team to now focus solely on the delivery of a transformational precinct that will showcase Brisbane to locals, interstate and international visitors,” Mr Cooke said.

Multiplex in August launched a damages claim against DBC – the joint venture between the Star group and its Hong Kong-based partners.

The integrated resort development in the heart of Brisbane had faced cost overruns of at least $260m and an opening date more than a year behind the original schedule.

An artist’s impression of the leisure deck at Queen's Wharf. Picture: The Star Entertainment Group.

The group said at the time it had been in “ongoing discussions” with Multiplex regarding disputed claims for the additional costs, extensions of time and damages.

The dispute had its genesis more than two years ago during pandemic construction delays and was set to become an extended legal battle in the countdown to the planned opening next year. DBC also had claims against Multiplex for damages in relation to delay in achieving key milestones under the contract.

Multiplex claimed damages against Star over extensions of time, milestone dates, damages and amounts payable in connection with the construction contract.

Star disclosed to the ASX last year that the construction contract with Multiplex has provision for liquidated damages payable on key milestones.

DBC is 50 per cent owned by The Star Entertainment Group, with 25 per cent controlled by Chow Tai Fook Enterprises and 25 per cent by Far East Consortium.

Multiplex had claimed a myriad of unforeseen additional costs including giving workers a holiday to mourn the death of Queen Elizabeth II that resulted in the loss of two productive days along with two-years of disruptions due to Covid-19 lockdowns.

This included $2m for extra cleaning and other measures to ensure social distancing by workers on the site.

A 187-page damages claim lodged in the Brisbane Supreme Court also said an outbreak of dangerous mould following heavy rain delayed the project.

“Upon inspection of the site following the severe rain event, Multiplex observed that in some locations mould had developed including but not limited to hoardings, material pallets and storage boxes,” the earlier claim said.

“While the testing was underway it was determined that the mould presented a risk of harm to human health and potentially made areas of the site unsafe.”

The Star closed Friday trading flat at 51c per share.