Question to be decided: which plan should completion be based on?
Force Corporation and the MTM Entertainment Trust of Australia were back in court today to resume their dispute which will decide who must own the Force Entertainment Centre on Queen St in Auckland.
Force developed the centre, used MTM money in doing so and had an agreement to sell it to MTM. The price was to be determined after practical completion. When work began it was touted as a $75 million project and when MTM floated in 1998, the centre accounted for 35% of the new trust’s assets at $A62 million, which translated to $NZ71 million on the exchange rate used.
MTM Funds Management Ltd, the management company which ran this trust and another MTM trust which owns a single Sydney office block, has also been embroiled in a battle to retain its job running the office trust this year, finally losing out to James Fielding Investments Ltd, set up by Paladin founder Greg Paramor and Rod Leaver.
Practical completion was required by 30 December 1999. A certificate of practical completion was filed that day by the project architect, Ashley Gillard-Allen of Walker Co Partnership, but MTM took Force to court claiming practical completion was not achieved. Weeks later, MTM filed more proceedings alleging deficiencies in the certificate as well as failure to complete.
In the High Court this week, the parties are seeking to resolve what constitute the plans on which the practical completion decision would be based.
Once that basis is decided by Justice Hugh Williams, a nominated architect, Russell Hawken, will decide the practical completion issue. Only then can the ownership position be decided.
Neither party is jumping at the prospect.
MTM Funds Management, already minus its office trust after a performance which didn’t satisfy magnate Kerry Packer, is fighting to survive in a tough Australian trust management market. The entertainment trust declared an $A29.6 million loss for the year to June, while Force declared an $NZ7 million loss.
One of the attractions of the Queen St centre, the Imax big screen, proved a troublesome feature when its management company, Cinema Plus, went into receivership on both sides of the Tasman, and the other major feature, Planet Hollywood, struck financial trouble back in the US and couldn’t find a local partner. Force is managing both businesses in Queen St.