CBH sues engineering giant Kaefer for $23.45 million over ‘shoddy’ site works at Northampton and Esperance

CBH Group has launched legal action against a WA-based engineering company regarding what it claims was shoddy work at its Esperance and Northampton sites two years ago. A writ filed in the Supreme Court on October 27 reveals CBH is seeking $23.45 million from construction giant Kaefer Integrated Services after doing business together for years. CBH claims it engaged Kaefer in early 2021 to carry out remedial work — mainly involving sealing — at the Esperance Grain Terminal and Northampton receival site. The projects formed part of more than $250 million in capital works projects that year. The first project included refurbishing the Esperance Grain Terminal annexe on Harbour Road for use as sealed storage, with work starting in March and ending in September. A video on the CBH website reveals the project was designed to ensure quicker out loading and to match the “size and speed” of harvest delivery and export programs around Esperance. Kaefer and CBH were utilising a form of sealing also used to keep shopping malls in Dubai cool by keeping air conditioning in. The second project involved the cladding and sealing of a shed at Northampton. In the writ, CBH claims the sealing was not to standard, with neither site passing pressure tests in October 2021. Both parties allegedly agreed Kaefer would correct defects and seal both sites after the 2021-22 harvest, given the tight proximity to harvest. CBH states Kaefer in mid-2022 presented it with a program of work which was accepted for Esperance to satisfy pressure-testing requirements by November 2022. However, the grain handler claims the work was “unmet” as of May 2023 and one month later called on Kaefer to “make good” on the defects at Esperance within five business days. CBH did not give notice to Kaefer to remobilise to Northampton, and instead elected to “accept the defects in the works” with an adjustment of contract price. Kaefer was notified of this in a letter on June 15, but the contractor has allegedly disputed CBH’s entitlement to act as it did on Northampton and to give short notice for Esperance. CBH has claimed $13.2m for the Esperance contract and $9.1m for Northampton, plus costs, with the writ saying the defects at both sites were “incapable of remediation” without it needing to engage another contractor. It claims a new contractor would need to remove and replace all roof and wall cladding, flashings, gutters, downpipes and sealing materials installed by Kaefer. As the plaintiff, CBH claims it would not be able to use the Esperance facility for the purpose of storing and fumigating grain — both in the period of Kaefer’s failure to complete the works and for the duration of rectification works by others. A CBH spokesman said the company would not comment on “any legal matters in court”.