Salta Constructions has commenced court action against Saracen Properties over the Raine Square dispute.
Salta lodged a writ seeking damages for loss of profit against Westgem Investments, a company under the Saracen Properties umbrella, in the Western Australian Supreme Court earlier today.
According to a statement released by Salta today, the firm terminated the Raine Square building contract last month due to concerns surrounding payments and the impact this could have had on subcontractors.
"Salta intends to honour its obligations to its sub-contractors, and will endeavour to resolve any outstanding issues expeditiously and professionally," the statement said.
Saracen Properties managing director Luke Saraceni said at a WA Business News function yesterday morning the dispute arose because of mismanagement of the project by the builder.
"The fact of the matter is that they tried to turn a fixed price contract into a cost price contract because they mismanaged some of the management side of it and some of the contractual side of the operations," Mr Saraceni said.
"For example, they let a contract to a concrete worker that was different to the contract that they had with us in respect to the concrete and how it was measured and how it was paid for.
"So that was immediately going to lead to a massive dispute that they've got with the concrete worker.
"There was little mistakes like that ... they made a few fundamental errors and they lost money and then they spent the rest of the time campaigning to pick it up through what I believe to be dud claims and we weren't going to wear it."
Earlier this week the Salta Group announced it would progressively close down its construction division to concentrate on "more profitable" areas of operation
