The Supreme Court of Western Australia has ordered Malaysian developer Victor Goh to pay ongoing fees to Adrian Fini’s Fini Group for consultancy services covering the development of lots two and three at Elizabeth Quay, despite the fact the services are no longer being provided.
The Supreme Court of Western Australia has ordered Malaysian developer Victor Goh to pay ongoing fees to Adrian Fini’s Fini Group for consultancy services covering the development of lots two and three at Elizabeth Quay, despite the fact the services are no longer being provided.
Mr Goh applied to the Supreme Court to set aside a statutory demand from Fini Group for $330,000 in unpaid fees covering a period from November 1 2018 to March 15 2019.
The application came after Mr Goh’s CA & Associates paid more than $4 million in fees to Fini Group, starting in late 2015 when a consultancy services agreement was signed between the two parties.
The deal was designed to facilitate the development of a Kerry Hill Architects-designed two tower project at the plot known as EQ West, which was proposed to include an art gallery on the 45th level of one tower, more than 400 apartments and a 200-room hotel.
According to documents released by the Supreme Court, the agreement covered three phases - the first and second being completed when CA & Associates acquired the Elizabeth Quay plot for $93.5 million.
Terms of the deal included $1 million to be paid to Fini Group on appointment as preferred tenderer, with a further $2.5 million payment due if CA & Associates executed a contract to purchase the lots.
Those terms were completed when the state government agreed to sell the land to CA & Associates in late 2016.
The contract also stipulated for further project delivery fees of $75,000 per month to be paid each month during the construction phase, only ceasing when the project was completed.
A termination fee of $1.75 million per lot would also be payable if the agreement is terminated.
In a decision delivered today after the case was heard in August, Supreme Court Master Craig Sanderson said it appeared the parties had a falling out in February 2018, with Mr Goh ceasing to request any consultancy services after that date.
Fini Group continued to issue invoices in line with the original agreement, and served a statutory demand for $594,000 in unpaid fees around January 7 this year.
Around a week later, CA & Associates delivered a letter to Fini Group with a cheque attached for the outstanding amount, while also giving notice to Fini Group that it was no longer obliged to pay any fees if it did not request any services.
Fini Group rejected that interpretation of the contract, saying that CA & Associates was on the hook to pay for consultancy services whether or not they were used, and continued to issue invoices.
Master Sanderson said the dispute hinged on whether the contract was ambiguous in respect to whether CA & Associates was obliged to pay for consultancy services, even if it did not use them.
“It is not arguable that the agreement is ambiguous,” Master Sanderson said.
“The plaintiff was obliged to pay the defendant a flat fee for consultancy whether or not those services were provided and irrespective of the extent of the services provided.
“That is the clear operation and intent of the agreement.”
Master Sanderson dismissed the application to set aside the statutory demand for $330,000, and also ruled CA & Associates should pay Fini Group’s court costs.
EQ West is estimated to cost around $385 million to construct, and have an end value of more than $700 million. Image: Kerry Hill Architects
