Star's $2.3B Queen’s Wharf project in Brisbane grapples with legal dispute, further delay looms

Queen’s Wharf Brisbane, an upcoming gaming and hospitality project led by Star Entertainment in Queensland, Australia, confronts further setbacks due to a legal dispute initiated by project builder Multiplex Constructions.

Star, in a filing made on the Australian Securities Exchange (ASX), said it received an "originating process," which is a formal notification of a legal complaint, about Multiplex’s move.

The contention centers on escalating expenses related to the AU$3.6 billion (US$2.3 billion) integrated resort, developed by Destination Brisbane Consortium (DBC) - a joint venture involving Star, Chow Tai Fook, and Far East Consortium from Hong Kong. Star holds a 50% stake, while the remaining partners share 25% each.

Real estate developer Multiplex is instituting legal proceedings against Destination Brisbane Consortium, asserting claims for extra costs, time extensions, and damages. Multiplex is claiming as much as AUD 420 million ($269.6 million) from DBC.

Multiplex’s claim includes about AUD 70 million in work it says it did to accelerate parts of the project where DBC would not allow an extension of time, AUD 33 million in escalations for soaring costs as well as extensive costs for flood-related delays it says it was entitled to, but not given by DBC. It also rejects an immediate payment demand DBC made on July 10 for AUD 123.7 million, reports Australia Financial Review.

Project rendering

The builder also claims breach of contract due to the way DBC’s principal representative on the project failed to act “fairly and reasonably” when it came to certifying completed milestone stages of the project.

“As previously disclosed, DBC has been in ongoing discussions with Multiplex regarding purported claims for additional costs, extensions of time, and damages, which DBC has disputed. DBC also has claims against Multiplex for liquidated damages payable for delay in achieving key milestones under the contract," Star said in its regulatory filing.

"The Star understands that the claim seeks various declarations from the Court regarding extensions of time, relevant milestone dates, liquidated damages, variations, and certain other matters, including potential sums payable, in connection with the contract and seeks various orders in relation to those matters."

Earlier, Star claimed Multiplex's deviations from the contractually agreed project milestones contributed to delays and modified the launch date due to construction lag. In reaction, Multiplex sought additional funding to address delays and incurred damages.

The project, situated in the heart of Brisbane's central business district, is poised to introduce The Star's fresh casino venture, alongside 2,000 apartments, 1,100 hotel rooms, and an accompanying Skydeck observation platform, adorned with approximately 50 bars, cafes, and restaurants.

Initially slated for a late 2022 inauguration, the project's opening timeline was subsequently adjusted to this year's Christmas, Business News Australia reported. However, the company later said that additional setbacks have necessitated postponing the launch until April 2024.