Behind the rift between the Queen’s Wharf developer and the retail giant

New light has been shed on the dispute between Destination Brisbane Consortium, the developer behind the $3.6 billion Queen’s Wharf precinct, and the former anchor tenant of its luxury shopping precinct.

In April, luxury retail giant DFS Australia Pty Ltd, part of the Moët Hennessy Louis Vuitton conglomerate, launched legal action against the consortium in the Supreme Court claiming it had engaged in misleading or deceptive conduct.

An impression of the Queen’s Wharf luxury shopping precinct. The former retail tenant DFS is suing Destination Brisbane Consortium over claims it misled the group. Credit: Queen’s Wharf

The conduct centres around the condition and works carried out to prepare spaces due to be leased by the retail group, including the heritage-listed Printery Building.

In documents viewed by this masthead, DFS alleges it spent over $10 million to begin fitting out premises that were not ready for works to begin due to the presence of lead paint and mould.

It claims the consortium’s principal contractor, Multiplex, obtained a report in February 2021 on the presence of lead-based paint at Queen’s Wharf, including in the Printery.

It found that paint on the window sills and frames in parts of the building were in poor condition. Months later, a plan outlined options for managing the paint, including encapsulation or removal.

In its claim, DFS also disputed the consortium’s use of two bank guarantees – one for US$3.2 million (A$4.8 million), the other for US$2.8 million – following its termination of the lease agreement.

A counterclaim lodged by Destination Brisbane Consortium on August 20, 2024, refutes many of the claims and outlines its own arguments of deception by the retail group.

In it, DBC states that DFS claimed to have “long-standing and successful relationships across the world” with luxury brands, and that it entered into the lease agreement with DFS based on these connections.

However, it states DFS could not secure at least one of Louis Vuitton, Dior, Cartier or Gucci to complement other luxury brand retailers planned for the precinct.

The consortium said it suffered its own financial hit and damage due to the loss of this valuable commercial opportunity, and it sought undisclosed compensation for a loss of rent where it believes another luxury tenant could have been secured.

It alleges it also incurred the cost of dehumidifiers and the removal in 2023 of a “ripple iron ceiling” in the Printery Building, amounting to almost $1 million.

There are also disputes in DBC’s counterclaim regarding handover and lease agreement dates and specifications, and the liability of the consortium to address the condition of the walls before the tenant commenced fit-out works.

DFS said it terminated the lease agreement “by written notice” on December 7, 2023. DBC alleges it was the one to terminate the lease – on January 30, 2024.

The consortium previously settled a separate lawsuit from builder Multiplex over design changes and delays to the project, with an expected cost to the group of up to $170 million.

No replacement retailer for DFS has been announced.

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