Attempted cancellation of the delayed build contract for Christchurch’s new metro sports centre by Australian contractor CPB was a tactic to impose a new contract with CPB finishing the job on terms set by CPB, the High Court was told. Work is to continue and the contract dispute goes to arbitration, ruled the High Court.
Funded jointly by government and Christchurch City, the new Parakiore Recreation and Sports Centre was scheduled for completion in 2021 at an anticipated cost of $220 million. CPB Contractors, a subsidiary of Australian listed construction company CIMIC, claims the cost will instead balloon to $696 million with completion now forecast for June 2025.
Signed as a ‘build only’ contract, CPB alleges late delivery of construction plans and misrepresentations about ground conditions have increased costs to such an extent it is entitled to cancel. Rau Paenga Ltd, the Crown-owned enterprise contracting for the build, was in breach of contract, CPB alleges. Rau Paenga ‘persistently, flagrantly or wilfully neglected to carry out its obligations,’ CPB claims.
CPB is demanding adjustments for cost overruns, an extension of time for completion and an increase in the contract price. Failure to agree would result in CPB suspending work and cancelling the contract, CPB threatened.
Justice Venning ruled CPB has no absolute right to suspend work or terminate. The contract sets out an arbitration procedure to settle disputes.
Rau Paenga Ltd v. CPB Contractors Pty Ltd – High Court (24.10.23)
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