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Fletcher dismisses subcontractor claims as vague

Monday 11th November 2019

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Fletcher Building has attacked claims by its electrical subcontractor for the Christchurch justice precinct as broad and vague. 

The NZX-listed builder is in the final stages of a month-long hearing on a $7.5 million claim from Electrix, which says it didn’t get paid enough for its work on the government project. The precinct was one of several projects in Fletcher’s troubled Building + Interiors division which lost almost $1 billion in 18 months. 

Justice Matthew Palmer heard the claim over four weeks in October in the High Court at Auckland.

According to the closing submissions in the case, viewed by BusinessDesk, Fletcher’s lawyer Kerry Fulton argued the accusations from Electrix were vague and that the subcontractor could have gotten out of the project in 2015 when Fletcher told it to up its game or get off the project. 

The parties dispute how long the delays took, what created them and both say the other was mismanaging the project. Fletcher claims Electrix did not have enough staff for the job. 

Fletcher’s counter-argument is that Electrix misled it into believing Electrix could do the job for $17 million. 

It says there was an agreement with an exact price, and although there was scope was to review and make changes, the general scope was clearly understood and agreed.

Electrix claimed that a very strong inference should be taken from the fact that while Fletcher Construction Co says the value of the job was restricted to several letters of intent, it kept paying Electrix and ended up paying more.  

“There is no evidence offered by anyone from FCC as to why those further payments were made, or on the basis on which they were made,” the company’s closing submissions say. 

Electrix documents also detail how the board of the French-owned company considered exiting the project in 2017, but was convinced by its New Zealand management to stay on and continue on a cost-plus contract basis. 

Fletcher says some of Electrix’s costs were caused by its own disorganisation. 

Both sides had different expert witnesses which disputed how much the job was actually worth. Their evidence, which focused on cost and pricing information, has been kept secret due to commercial sensitivity. 

The judge’s decision has been reserved. 

(BusinessDesk)

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