The builders who contracted a construction site in downtown Manly accused the former Manly city of misleading them when they claimed to have signed the project without telling them it was doomed to fail.
But the new Northern Beaches city government has passed the blame on Henry Wong., the former general manager. He claimed in the court document that he was not authorized to participate in the agreement.
The new city decided to abandon the controversial reform. This prompted Built Development and Athas Holdings to bring legal proceedings in the New State Supreme Court, demanding 74 million yuan from the city government.
The controversy focused on a contract between the developer and the city of Manly, which calls for the Whistler Street parking lot and the Manly Library to create a new library with rooftop gardens, cinemas and community space.
This project is behind The Corso. There is also a stand-alone plan to build an underground parking lot near Manly Oval.
At a private meeting shortly before the 2016 merger, Manly voted to approve the contract for the project. The project has met with strong opposition from some lawmakers and communities.
The management of the new Northern Beaches municipality is formed by the merger of Manly, Warringah and Pittwater. The new city later cancelled the contract on the grounds that the project had financial risks.
The developers argue that it is entitled to compensation because the city wrongly terminated the project, although Northern Beaches denied any wrongdoing.
In the court document, Northern Beaches said the development was null and void because it was handled by Manly and that any agreement reached between the two parties was legally null and void.
The Northern Beaches municipality says the former city and general manager, Henry Wong, violated local government rules. The rules require the Henry Wong to sign an agreement with at least one municipal official present. They believe that, Henry Wong does not have authority signed the contract, the developer also does not have authority.
After that, Henry Wong went to work in the city of Strathfield. In July, he was reappointed general manager of Strathfield for the next five years.
The court document said the former city government was aware of the "widespread concern" about its "illegal conduct" and said it violated local government laws and public opposition to the project.
The court document also said that the former municipal government was aware that four of the nine Manly councillors were opposed to redevelopment and "complained about the project and the Manly Oval project."
"Manly`s development and transactions may be illegal, and such development is ineffective and unenforceable, which is a legitimate concern," the document said.
Developers argue that if the previous city government was informed that the contract was not properly authorized and did not comply with the relevant law, it was "misleading or deceptive."
In addition, developers are appealing a decision by Supreme Court Judge Michael Ball. The appeal will be heard by the court in September.
In February, independent Northern Beaches City Councillor Vincent de Luca called for an investigation into the city`s approach to reconstruction.
The investigation is expected to take place after the case is finalized.
Earlier this year, Built Development and Athas Holdings said it was "disappointed by the city`s decision to cancel the project."
The city`s chief executive, Mark Ferguson, had previously said it was in the best interests of the community to cancel the project "on the basis of an independent expert`s comprehensive review and recommendations."
