Dankav Terminates Builder on Mermaid Beach Tower

The developer of a near-complete Gold Coast luxury tower has terminated its head building contract, alleging “multiple material breaches”.

 The 52-unit tower, dubbed Laani, is rising at 26-28 Alexandra Avenue, Mermaid Beach. Apartment prices start at $1.2 million.

The project is being developed by Gold Coast-based Dankav, who is also behind The Oxley 1823 at Nobby Beach, and has recently upscaled its plans for The Alfred at Mermaid Beach.

Laani was being built by Groupline Constructions, a Gold Coast builder also tapped for Chapter Two’s $160-million Holm Project at Rainbow Bay and who took on Buildcap’s dual tower project on the Broadwater Parklands after the demise of GCB Constructions.

Dankav confirmed to The Urban Developer that it had terminated Groupline’s head contract on the Laani project.

Dankav managing director Daniel Veitch said the decision to terminate was not made lightly, but followed what he called a prolonged period of “serious and ongoing defaults” on its contract. 

“After careful consideration, we decided it was in the best interests of the project [and stakeholders including] buyers and subcontractors (to terminate),” Veitch said. 

He alleged the termination occurred “due to multiple material breaches, including but not limited to failures to properly resource the project, ongoing delays, and repeated [alleged] misrepresentations regarding subcontractor payments.” 

The dispute is now before the courts—Groupline has filed proceedings in the Supreme Court that are due to be heard in February. 

“While it would be inappropriate to comment on the specifics any further at this time, the project remains our priority, and steps are being taken to progress and complete the project promptly and to protect the interests of all stakeholders, buyers and subcontractors,” Veitch said.

▲ Groupline was nearing completion of the 20-storey project.

Groupline did not respond to requests for comment from The Urban Developer, but had previously told media that its position was that Dankav had repudiated the contract. 

“As the matter is currently before the Supreme Court, Groupline is unable to provide further comment at this time in order to protect its legal position,” project director Richard Byatt reportedly said.

Separately, Groupline has also been involved in a payment dispute with a subcontractor on the project.

In November last year, Groupline was ordered to pay $400,477 to subcontractor SEQ Formwork after a Queensland Building and Construction Commission (QBCC) adjudication.  

SEQ Formwork initially claimed $749,673.89 via the QBCC adjudication process from Groupline for unpaid work on Laani.

Groupline said it had withheld payments due to defects, incomplete work and that the claimant did not provide additional security. 

Groupline also disagreed with the amount claimed, saying that $854,637.22 should be deducted via set-off items.

These included major alleged defects, including core wall defects which required rectification, it said.

The subcontractor works also involved approximately 170 variations costing more than $414,000, Groupline said. 

▲ Groupline topped out the Laani tower in August of last year.

But QBCC adjudicator Rhiann Storey ruled that the parties had not strictly administered the contract, using drawings rather than superintendent directions to direct variations. 

Groupline’s conduct led SEQ Formwork to “reasonably assume” formal written directions were not required and variations would be paid if carried out, Storey said. 

Variations were accommodated within an agreed formwork cycle, meaning Saturday work and related claims should not attract additional payment, Storey said. 

While Groupline was allowed to rely on some proven defect-related deductions, most major defect backcharges were rejected or heavily reduced due to lack of evidence, overreach or mischaracterisation of variations as defects. 

The QBCC adjudicator ruled that Groupline owed SEQ Formwork $400,477.38.