Contractor launches lawsuit against Lavan

A contractor who lost a decade-long dispute over a $26 million contract on an iron ore project in the Mid West has launched legal action against the firm that represented it. 

The original dispute stemmed from a contract signed in 2010 between Maddington-based contractor DM Civil and Karara Mining - owned by China’s Ansteel - and subsequent cost blowouts on the project.  

Karara ended up paying DM Civil $53.8 million, more than twice the original $26 million contract value.

Represented by Lavan, DMC went to court seeking a further $19.1 million for alleged additional work, delays and disruption while Karara lodged a counterclaim for $7.1 million, alleging it had overpaid DMC.

That dispute ended in December 2021 with Karara succeeding in counter claims worth at least $6 million, with DMC succeeding in claims of $679,000.

More than two years after the judgement was made, DMC this week filed a writ in WA’s Supreme Court against Lavan.

DMC, this time represented by Perth firm Hale Legal, has outlined in the writ alleged breaches of duty in Lavan’s handling of the case.

According to the writ, DMC said Karara had offered to settle the dispute with a payment of $4.5 million in 2014 and has now claimed it has lost approxmiately $16 million by not accepting the offer and going to trial.

Approximately $5 million of that total being Lavan’s legal fees from 2014 to 2019, DMC has claimed.

DMC is now seeking damages and interest over the allegations. 

Lavan managing partner Dean Hely told Business News the firm had received the writ and was with its insurers. 

The dispute between Karara and DMC in 2021 was subject to scathing assesment at the time by Justice John Vaughan, who said the litigation had consumed significant time and resources of the court.