$32m court claim over jetty and berth construction dismissed

AN ENGINEERING and construction firm has lost a claim against Wiggins Island Coal Export Terminal over a $327 million contract.

Monadelphous Muhibbah Marine argued WICET should not have called upon the bank guarantees.

WICET hired MMM under several contracts to construct a jetty and a ship berth at the Gladstone Port.

As part of the contract MMM entered into in 2011, it was required to provide four bank guarantees worth $32 million, or 10% of the contract, as security for its performance.

In December, 2014, WICET called upon the guarantors for the money because of a delay in MMM's work and received the 10% payment in full.

MMM argued WICET should not have called upon the banks because the contract was for building work.

Supreme Court documents released on Monday state the firm also argued WICET legally was not entitled to 10% of the contract price under the Queensland Building and Construction Commission Act 1991.

The act states securities for a builder's performance could go no higher than 5% of the contract price.

MMM argued WICET should only have received $16 million, or 5% of the contract price.

Legislation states building work includes constructing or repairing a building.

But when the contract was signed the act was different and at that time MMM's work, such as marine construction, was excluded from the act.

Justice Philip McMurdo  ruled the companies' contract was not a building one and dismissed MMM's claim.


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