The famous hanging gardens façade at One Central Park Sydney continues to grow … in cost for building defects and in legal fees.
In NSW Supreme Court proceedings decided in October 2025, the cost was estimated to be $37 million to comply with the building rectification orders issued by the Building Commission NSW and the fire safety orders issued by the NSW Department of Planning and Environment to the developers. The proceedings are described in my previous article –
These are not the only building defects proceedings. The Owners Corporations of the strata buildings affected have instituted proceedings against the developers and the builder for defect rectification.
In NSW Supreme Court proceedings decided in April 2026, the Court decided that the proceedings for defect rectification should be determined before the builder’s parent liability under its guarantee of the builder’s liability to the developers was determined.
This article outlines the status of the disputes surrounding One Central Park.
The scope of work
In January 2023, the Minister for Planning and Environment made these fire safety orders:
- Remove the Aluminium Composite Panels identified in the combustible cladding assessment report
- Install replacement panels using the existing colour scheme and compliant with the Building Code of Australia
- Remove and replace parts of the green wall and implement maintenance measures
- Install fire sprinklers and replace the polymer planter boxes identified as combustible
- Complete the work by 28 April 2026
In December 2023, the Building Commission of NSW made these building rectification orders to rectify defects:
- A batch of the Type 2 Stainless Steel T-Bolts randomly distributed across the building to secure planter boxes in the vertical gardens are defective with some fracturing and failing.
- The ability of the planter boxes to drain both stormwater rainfall catchment and sub-surface water flows effectively to the stormwater drainage system is defective.
The scope of work is the replacement of the flammable cladding panels and the defective T-Bolts on the 1,672 planter boxes cantilevered off the building façade, and the replacement of the defective drainage system for the planter boxes.
A dispute exists between the Owners Corporations of the strata schemes involved and the developer and the builder as to method to be used to comply with the building rectification orders. The Owners Corporations want all planter boxes to be replaced with new, at an estimated cost of $37 million. The developer wants to replace only the cladding and the bolts at a cost of $24 million.
On 10 October 2025, the NSW Supreme Court decided not to give an interim ruling on the dispute and said that a full hearing was necessary: see The Owners Strata Plan No 87881 v Frasers Broadway Pty Ltd [2025] NSWSC 1073 (a decision of Her Honour Justice Rees).
On 20 April 2025, the NSW Supreme Court decided not to determine liability under the parent guarantee: Frasers Central Park Land No 1 Pty Ltd v Frasers Central Park Equity No 1 Pty Ltd [2026] NSWSC 364 (a decision of Her Honour Justice Rees).
The One Central Park development
The parent guarantee proceedings contain this description of the contractual aspects of the development:
The One Central Park development on Broadway in Chippendale consisted of two phases - Phase 1 was residential apartments (West Tower, East Tower and Sky Apartments) a Retail Lot at One Central Park; and Phase 2 was four strata residential towers at 1, 3 and 5 Park Lane, 8 Park Lane, Mark 1 and Mark 2.
In July 2011, Frasers Central Park Land No 1 Pty Ltd, as the landowner, entered into in a Joint Venture Agreement with Frasers Broadway Pty Ltd and SH Central Park Development East Pty Ltd, as the developer, to develop the site. Under a Novation Deed, Frasers Central Park Equity No 1 Pty Ltd replaced Frasers Broadway Pty Ltd.
In October 2011, the developer entered into an amended Head Contract with Watpac Construction (NSW) Pty Ltd, as the builder, to design and construct. The contract sum was $596,200,072.
Watpac Ltd, gave a “Guarantee and Indemnity Performance Guarantee” of the obligations of Watpac Construction (NSW) Pty Ltd, its subsidiary, under the Head Contract which was limited to an amount of $29,810,003.60. This is the parent guarantee.
In addition, the guarantee extended to defects under the Home Building Act 1989 (NSW) but not for loss falling within the ‘second limb’ of Hadley v Baxendale (1854) 9 Ex 341 which is: ‘the damage is reasonably supposed to have been in the contemplation of the parties, at the time when they made the contract, as the probable result of the breach’.
From May 2013, construction work was completed progressively, and interim occupation certificates were issued. .On 17 January 2014, final occupation certificates were issued and Strata schemes were registered for the West Tower, East Tower, Sky Apartments and Retail Lot. On 7 October 2015, a final occupation certificate was issued for the last stage of the development, Mark 1 and Mark 2.
In July 2014, the developer and the builder executed a Deed of Settlement and Release to resolve various disputes under the Head Contract. The builder agreed to rectify various defects and the developer agreed to release security. The release did not extend to the builder’s obligations under the Home Building Act 1989 (NSW) or the Environmental Planning and Assessment Act 1979 (NSW).
The defects proceedings
Between 19 December 2019 and 15 June 2021, the Owners Corporations in Central Park brought building defects proceedings in the NSW Supreme Court against the builder and the developer under the Home Building Act 1989 (NSW).
The Owners Corporations said that the eight building defects proceedings were brought within the six-year limitation period under the Home Building Act 1989 (NSW) (note: normally, the limitation period commences on the issue of the final occupation certificate).
The builder has filed cross-claims against various third-party subcontractors and consultants. Fire Safety and structural engineers, architects, designers and certifiers which were involved in the building work have been joined in the proceedings. In the 8 Park Lane proceedings, 14 consultants and subcontractors have been joined.
The damages claimed by the Owners Corporations total $180 million. Add estimated legal costs of $20 million, the potential liability of the builder, Watpac Construction is some $200 million.
The developer issued cross-claims against the builder and Watpac Ltd (the parent company), seeking to be indemnified under the joint venture agreement and Novation Deed.
The status of the builder, Watpac Construction has been changed to ‘non-trading’ and its name has been changed to ACN 103 211 141 Pty Ltd. As the solicitors for the Owners Corporations observed these actions “raised concerns regarding the company’s ability to meet any adverse judgment.” As a result, the parent company Watpac Ltd appears to be the sole source of funds to pay for the amounts awarded under the claims.
Watpac Ltd’s application
Watpac Ltd wanted to ‘sit-out’ the building defects proceedings. Watpac Ltd argued that it should not be “vexed” with the defects proceedings unless and until its liability under the guarantee it gave to Watpac Construction is established in the defects proceedings.
Watpac and Watpac Construction made an application to the Court that liability under the guarantee be determined as a separate question after the defects proceedings, not during the defects proceedings. The defects proceedings are expected to be ready for hearing in late 2026 and 2028.
Watpac said that its arguments were based on law, not on the facts. The legal arguments were whether it could rely on the releases given in the Deed of Settlement and Release and whether various statutory limitation periods had expired before the claims were brought. In any event, it said it should not be put to the cost and trouble of participating in the building defects proceedings which were likely to be costly with 49 plus affidavits and lay or expert reports served or to be served.
The Court has a discretion to order that questions of law be determined as a separate question under rule 28.1 of the Uniform Civil Procedure Rules 2005 (NSW). This rule has its origins in the common law procedure of demurrer which was commonly used in the Courts of Common Pleas in Victorian times.
In this case, the Court decided to refuse to hear the separate question. The Court said that Watpac was asking it “to answer a hypothetical question” and that it would “divert the parties from the eight building defects proceedings, the determination of which will provide the necessary foundation for the determination of these proceedings [on liability under the guarantee]”.
As to Watpac not wanting to be “vexed” with these proceedings in the interim, the Court said that “Inverting this sequence [determining the eight building defects proceedings before the liability under the guarantee] for the convenience of the guarantor will cause considerable inconvenience to others and may result in the waste of the parties’ resources and court time.”
These are recent photos taken of the towers and the planter boxes.
 One Central Park Towers on Broadway, Chippendale © Copyright April 2026 |
Note drainage and water is provided by drain pipes connecting the planter boxes. The temporary rope system supporting the planter boxes is a ‘rat highway’ according to residents. |
