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Infrastructure NSW statement regarding Supreme Court of NSW proceedings brought by Grocon

Infrastructure NSW continues to defend claims by Grocon in relation to Central Barangaroo.

Grocon originally claimed that it had been induced by misleading or deceptive conduct by Infrastructure NSW into entering the Central Barangaroo Development Agreement. Subsequently Grocon claimed Infrastructure NSW deliberately withheld issuing a notice relating to its settlement with Crown and Lendlease in relation to their “sight lines” across Central Barangaroo. Grocon alleges this was done in order to force it out of the development, causing it loss.

Infrastructure NSW’s position is that Grocon’s exit from the development was proposed by Grocon on account of financial difficulties at other projects. Grocon approached Infrastructure NSW with a proposal to sell its development rights to its consortium partner Aqualand in accordance with a process set out in the consortium’s own documents. In the circumstances, Infrastructure NSW approved and supported the sale.

In order to support its claim, Grocon seeks to mischaracterise Infrastructure NSW’s actions.

Infrastructure NSW maintains that it complied with the provisions of the Central Barangaroo Development Agreement at all times.

Further background information

Grocon was chosen as the Central Barangaroo Developer (Developer) on behalf of a consortium that included Aqualand and Scentre Group. Grocon signed the Central Barangaroo Development Agreement (CENDA) in 2017.

The development at Central Barangaroo was subject to negotiations with Lendlease and Crown Resorts in relation to the sight lines from Barangaroo South across Central Barangaroo, to the Harbour Bridge and Opera House. This was disclosed in the tender documents and confirmed in the CENDA. Infrastructure NSW had until 1 January 2020 to issue a notice to the Developer establishing the outer limits of development at Central Barangaroo including height. If INSW did not issue a notice by that time, the development reverted to the existing planning approval dating to 2014. 

Infrastructure NSW reached a settlement with Lendlease and Crown in August 2019 in relation to the development envelope at Central Barangaroo.

Separately, from early 2019, Grocon had been negotiating the sale of its development rights to Aqualand. The transfer from Grocon to Aqualand was formally proposed to Infrastructure NSW by Grocon and Aqualand in February 2019. Following a period of open negotiation involving all consortium members, in mid-2019 Grocon and Aqualand entered into a transaction to effect the transfer via a “step-in” mechanism.

Grocon sought a waiver from Infrastructure NSW in relation to a particular aspect of Grocon’s exit from the consortium, which Infrastructure NSW provided.  Once Grocon’s transaction had completed in September 2019, Aqualand was the Central Barangaroo Developer under the CENDA and Infrastructure NSW issued a sight lines settlement notice to Aqualand.

Grocon at times has alleged that Infrastructure NSW was the cause of Grocon’s financial difficulties. In August 2020, this argument was considered by the Supreme Court in the context of a security for costs application. Henry J found that:

 “I am not persuaded that Grocon has established that Infrastructure NSW’s conduct has materially contributed to the impecuniosity of Grocon”.

Her Honour also noted the existence of Grocon liabilities which were unrelated to Central Barangaroo.

The litigation continues to proceed in accordance with a timetable set by the Court.