Court action over dispute between developer and builder of Palisade at Miranda

Apartment buyers in the high-profile Palisade project at Miranda have been sleeping on the couches of family and friends or staying in a B&B due to a contractual dispute between the developer and builder.

Legal proceedings involving the Galileo Group and builder Duffy Kennedy commenced in the Supreme Court on Thursday last week.

Duffy Kenney told the Leader they suspended work because progress payments were not made.

Galileo Group "absolutely rejected" the claim, saying the builder did not meet contractual obligations.

Palisade, which is on Kingsway, has 197 units, of which about 40 have yet to be sold.

Construction was largely finished in March when the builder suspended work.

The private certifier would not issue a final certificate of occupancy, resulting in a delay of about two months in settlement for buyers.

The required certificate was finally issued early this month and the first residents moved in on the weekend.

Managing director of Duffy Kennedy, Gavin Duffy, said they suspended work on March 28 "due to a failure of Galileo to make its required payments under the contract".

"We acted under the Building and Construction Industry Security of Payment Act," he said.

"This law was created to protect contractors and their sub-contractors from being left out-of-pocket when a developer hits financial trouble."

Galileo Group development director Paul Marshall said, "We absolutely reject Gavin's position".

"It is our view that we have met our obligations under our contractual arrangements with Duffy Kennedy."

Mr Marshall said Galileo Group was "disappointed our buyers were dragged into it". "There were some people in real difficulty - they had to stay in B&B or with friends for a couple of months," he said.

"But, the issue has now been taken out of play for buyers.

"Forty settled by Friday of last week, another 80 should settle this week and another 30 the following week."

Mr Duffy said his company had "great sympathy for the many buyers who have experienced long delays in settlements".

"Many have been sleeping on the lounges of friends and families when they should have already been in their new homes," he said.

Mr Duffy said his company had been locked out of the site. Mr Marshall responded: "They no longer have a role".

Mr Marshall said it was normal for security officers to patrol a development in the period before buyers moved in.

He said another builder would complete minor outstanding works.