Developers behind a new city apartment complex have cast doubt over their capacity to pay back a more than $2 million debt to their builder.
Crafted Capitol Pty Ltd directors Matt James and Peter Sarris were ordered to appear in the ACT Supreme Court on Wednesday, after failing to repay the final amount it owed to builder Bloc for construction work on the 14-storey Capitol Residences.
The dispute has forced Bloc to suspend all maintenances and repair work at the London Circuit complex, with the builder telling residents it "cannot keep working for nothing".
The debt dates back to August last year, when an independent adjudicator appointed under ACT security of payment laws ruled that Crafted Capitol owed Bloc about $2.3 million.
The developer is effectively challenging that order, launching a new dispute resolution process in the hope a different adjudicator will deliver it a different outcome.
Mr James and Mr Sarris were both called to the witness box on Wednesday, where they were grilled on the debt and their capacity to repay it.
Both directors, who gave evidence separately, said they did not believe Crafted currently owed a debt to Bloc because the new dispute process had yet to run its course.
Bloc's lawyers pressed Mr James on how Crafted would pay the $2.3 million debt if the independent umpire again ruled in their client's favour.
In response, Mr James said: 'I don't know".
He then clarified that Crafted Capitol would have to request funds from a separate corporate entity, Crafted Central, which has control of London Circuit land. Mr James and Mr Sarris are the directors of that company.
Mr James said funds could be moved from Crafted Central to Crafted Capitol, "but not it all circumstances".
Bloc's lawyers last month wrote to the directors about the upcoming hearing, reminding them that they needed to bring their tax returns, bank records and statements and pay slips to court.
But neither did, arguing it wasn't a requirement under their subpoena.
News of Crafted's unpaid debt has prompted calls for the Barr government to accelerate the introduction of its proposed property developer licensing scheme.
Owners Corporation Network president Gary Petherbridge said cases of developers leaving builders, sub-constructors or owners out of pocket "happened time after time".
"How much more evidence do they need?" he said.
Mr Petherbridge's comments echoed those of ACT construction union assistant secretary Zach Smith, who earlier this week said "workers, contractors and home buyers should not be left in the lurch when the big end of town fails to pick up their bill".
The office of Sustainable Building and Construction Minister Rebecca Vassarotti could not provide a timeframe for the introduction of the developer licensing scheme when contacted by The Canberra Times on Wednesday.
In a statement, an ACT government spokesman said work had started to examine the potential scope of licenses and on an "effective" regulatory model suitable for the territory.
"When we have a draft framework of a potential model for the ACT, the government will be able to notify the stakeholders of a timeline on consultation and implementation," he said.
