The builder and Woolworths had agreed that Masters would lease the Bendigo store for 12 years.
WOOLWORTHS has been ordered to pay almost $11 million over a failed plan to take on Bunnings with an “enhanced” Masters store in Bendigo.
North East Solution Pty Ltd had struck a deal in 2009 to build the store and lease it to the supermarket giant for 12 years, with Woolworths promising to contribute the difference between the cost of building a Bunnings and the cost of building a Masters on the site.
COURT RULING IN FULL (PDF)
WHAT JUSTICE CROFT SAID (PDF)
But Masters and Woolworths ended the agreement to take over the site in McIvor Rd, Bendigo.
Supreme Court Justice Clyde Croft said the plan was to roll out the Masters to compete with its rival Bunnings as quickly as possible, “enhancing” the building with concrete walls instead of metal and other features to “make it more attractive to potential customers, particular female”.
“A reader of these reasons might, in light of extensive coverage recently in the financial and other business press, have some thoughts about this strategy,” Justice Croft noted in his judgment.
The parties had agreed that Masters would lease the store for 12 years, with an option for another five terms of six years each.
The deal could be broken only if the parties “acting reasonably and in good faith, were unable to resolve any disagreement that arose in relation to the construction costs”, Justice Croft said.
In May 2010 Woolworths ended the agreement, claiming a costs dispute could not be resolved.
North East Solution argued Woolworths was acting unreasonably or not in good faith and really ended the agreement because construction costs exceeded their secret budget. They also wanted to buy a different site, NES argued.
The company also claimed Woolworths thought the Greater Bendigo City Council and residents opposed it, and none of these grounds were reasonable or in keeping with the original deal that they could only end the agreement over costs.
“I do find on the evidence that Woolworths ... did not act reasonably and in good faith to resolve differences in relation to the estimate,” Justice Croft found.
He noted that his finding that there was no “conspiracy on the part of Woolworths”.
He awarded $10.87m in damages.
0 nhận xét:
Đăng nhận xét