A leading construction company has been sued to pay more than AUD6 million in damages on allegation that they breached a repair contract at Iririki.
Mocha Limited trading as Vancorp Construction is now facing court after Iririki Island Holdings Limited alleged that the company failed to uphold their initial agreement.
It was filed before the Supreme Court during conference yesterday that Iririki contracted Vancorp to have all the apartments repaired and undertake all required repairs on damage caused by Cyclone Pam.
Counsel representing Iririki Island Resort, Dane Thornburgh, filed that the contract was given to Vancorp to do some repair works up to standard within four months.
Mr Thornburgh said that after the original date of completion, Vancorp approached his client advising that they were not able to complete the job in time and was given until March 31, 2016.
He said that on that deadline, still the company failed to complete the contract.
He continued that when the matter fell behind schedule, Vancorp did not take every action to bring it into line by taking further crews to complete the job.
He claimed that during the time of contract, Vancorp failed to increase the number of workers to speed up the work.
Mr Thornburgh said that in the initial contract, it was agreed that the workers engaged in the works will not be used for other jobs.
He filed that in the middle of the contract some of the workers involved in Iririki work were also used in other jobs at Holiday Inn, Le Lagon and Wilco Hardware.
He said that due to the breach of that contract, Iririki subsequently suffered loss and damages in terms of the delay in re-opening the resort, loss of accommodation and food and beverage revenue.
He said that the extra staff wages and cost were incurred while waiting for the completion of the works and training costs in preparation for the opening.
He said that due to all these, his client overpaid the staff who were not present at their workplace therefore they are now claiming an amount of AUD3,667,864 for loss of food and beverage.
He submitted that Vancorp should pay up to AUD635, 591 extra cost used to cover the extra staff wages and costs and AUD886,865 for overcharging of staff.
The claimant's legal counsel said that Vancorp should pay another loss of income due to lower occupancy and no listing on wholesales and consequential cost of AUS6,190,320.
He said that Vancorp should pay up to a total of AUD6,190,320 including an interest of no less than five per cent from November 2015.
Meanwhile, Mark Fleming who is representing Mocha Limited trading as Vancorp filed an application that; 1. The defendant not be required to file and serve a defence in the time required under the rules; 2. That no party be allowed to take any further action in the proceedings without: a) An Order of the Court; or b) The Liquidator to be appointed; 3) Costs; on the grounds that his client is the Claimant in Company Case 3841/16 against the claimant/respondent (Iririki Holdings Limited).
Fleming said in the Company Case his client has filed a claim to have the claimant/respondent placed into liquidation.
Further grounds for the application are that the claimant/respondent has already filed in the Company Case an almost identical cross claim and setoff, while the defendant/applicant has already filed a conditional defence to the claimant/respondents' claim and setoff giving a complete defence.
"In the Company Case, the applicant (Vancorp) has filed a counter claim seeking damages of some Vt80 million against the Respondent," Fleming said.
The legal counsel representing Vancorp said if allowed to make a counter claim in the proceeding, it will be similar as that in the Company Case.
A hearing date is yet to be set.