24/05/2022 - 14:59

Decmil wins $1.3m court battle

24/05/2022 - 14:59

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Decmil has won its court stoush with Avid Australia over $1.3 million in unpaid bills Avid Resources contested before its collapse, ending a six-month long legal battle.

Decmil wins $1.3m court battle
The legal action coincided with the appointment of administrators to Avid Resources, the engineering and construction subsidiary of AvidSys Group.

Decmil has won its court stoush with Avid Australia over $1.3 million in outstanding payments its company Avid Resources contested before its collapse, ending a six-month long legal battle.

The Osborne Park-based contractor mounted the lawsuit against Avid Australia in November, claiming it owed the money as part of a parent company guarantee it signed when Avid Resources agreed to undertake works at Rio Tinto’s Mesa mines.

Despite sending two invoices and several demands for payment of the outstanding funds, Avid failed to pay, prompting Decmil to drag the subcontractor to court seeking payment and damages for an alleged breach of contract.

The legal action coincided with the appointment of administrators to Avid Resources, the engineering and construction subsidiary of AvidSys Group.

During a hearing last week, brought on by Decmil’s request for summary judgment, lawyers for Avid told the court the company had disputed the amounts claimed before its collapse and shouldn’t be obligated to pay until that was resolved.

But Decmil’s lawyer James Scovell insisted the parent company’s obligations under the contracts were clear - that it was obligated to foot the bill within 10 days if AVRWA didn’t.

In a determination handed down this afternoon, Master Craig Sanderson agreed Decmil was entitled to summary judgment and that Avid should have to repay the amounts sought and cover the legal costs associated with the claim.

While acknowledging the difficulties posed by Avid Resources’ liquidation, Master Sanderson said there was no evidence to suggest the issue of the invoices was unreasonable.

“In the situation where there is nothing at all to suggest the plaintiff's invoice is fraudulent or issued pursuant to an obvious mistake, the defendant is, with respect, doing nothing more than speculating,” he said.

“This is a clear case where the plaintiff is entitled to summary judgment.”

The summary judgment will no doubt be good news for Decmil, which was forced to lower its revenue guidance for FY22 to the $425 million to $450 million range from more than $500 million, forecasting a loss of between $10 million and $15 million.

It pinned the difficulties on supply chain issues, price escalation and border challenges that had led to a loss on several contracts, as well as the ongoing dispute with AVRWA.

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