Builder’s huge bill after subbie storm damage pay battle
A MILLION-DOLLAR pay dispute over storm damage on a Crystalbrook Collection hotel construction job has landed one of the city's biggest builders with an eye-watering bill.
HPS was subcontracted by Prime Constructions (QLD) for the glazing works at the Bailey hotel at 163 Abbott St - which opens for business on Saturday - including detailed design, supply and installation of windows and doors.
The subcontract stated Prime would pay HPS up to $4.15 million plus GST for the project, with work starting on June 2018.
No individual door or window assemblies were complete when a severe storm related to Cyclone Owen struck on December 10.
Bureau of Meteorology figures show 181.6mm of rain fell over a 24-hour period in Cairns, with wind gusts reaching up to 87km/h at the airport.
The damage to the $120 million hotel construction site's internal linings was significant.
Rainwater penetrated the building through the roof, fire stairs, openings where windows had either not been installed, were only partially or defectively installed, and from holes where a temporary elevator was operating.
HPS submitted its payment claim on May 27, 2019, saying it had completed about 92 per cent of the original contract work which amounted to $3.8 million as well as about an extra $23,000 in variations.
Prime responded with an assessment of the original work that was more than $100,000 lower than what HPS had claimed.
It also placed the variations at about $48,000 in the negative, and applied back-charges of more than $866,000 due to the damage caused by the storm due to defective glazing work.
The matter went to the QBCC which referred it to adjudicator John Tuhtan.
His 52-page decision covered a wide range of technical issues including whether the presence of adhesive tape and debris meant the work was defective.
"The claimant (HPS) admits that none of the windows were complete but denies that there were any defects," Mr Tuhtan wrote.
"(The) work was simply incomplete work or a work in progress.
"The fact that some of the sealants had not been installed or completed is not a defect, it is unfinished work."
Prime had asserted the windows were defective because they were not installed in accordance with Australian standards.
"In particular, the internal drain holes in the mullions were covered with adhesive tape and the sub-sill gutter had not been cleaned out having the effect of creating a blockage to the water course flowing to the exterior of the building," Mr Tuhtan wrote.
"The effect of the presence of the tape and the debris was to alter the water course so that the window drained to the inside of each room."
Mr Tuhtan ultimately found in favour of HPS and ordered Prime to cough up more than $1.3 million in unpaid fees.
Prime has gone to the Supreme Court to appeal the decision.
A spokeswoman for the firm said all money tied up in the dispute had been paid in full into a holding trust account with the courts.
"The unfortunate contract dispute with HPS is currently with the Supreme Court and we are awaiting a judgment," she said.
"It will be up to the court to determine what money is owed and the court can release the funds at any time upon its determination.
"As the HPS matter is currently with the Supreme Court it is not appropriate for us to make any further comment in relation to this."
Bailey will be home to 217 hotel rooms and 110 apartments in the Cairns CBD, as well as three restaurants - CC's Bar and Grill, Pachama and Milk Bar.
Bailey is the second of Crystalbrook Collection's new hotel trilogy in Cairns, with the $130 million Riley already open and the $120 million Flynn due for a soft opening in the first quarter of next year.
A Crystalbrook Collection spokeswoman said it was not the hotel company's place to comment.
"Crystalbrook Collection has made all required payments as mandated under the construction contract with Prime," she said.
