A FAILED commercial relationship has landed a Mackay builder and a Lennox Head development administrator in court disputing a portion of the $3 million profit they made together.
Michael Arthurs and his building business M.J. Arthurs built "turn-key" house-and-land packages for Optima Homes in the Mackay area.
Shaun Davison, from Portfolio Housing, sourced 86 clients to invest in those packages and performed administration services related to them.
Mr Arthurs said he and his company were entitled to $467,908 as a debt owed or as damages for breach of agreement when Mr Davison terminated a verbal contract.
Mr Davison has filed a counterclaim seeking to recover about $1.22 million, which Mr Arthurs admits he withdrew from a trust account.
There is also disagreement about a number of incomplete or unsettled houses.
Mr Arthurs said he contracted Mr Davison's company Portfolio Housing to carry out administration services, but Mr Davison claims they were in a partnership business where he was entitled to half the profits.
In Brisbane Supreme Court last week, lawyers for Mr Arthurs argued that a three-day trial starting on March 31 would not be long enough to vent the issues, but Mr Davison was pressing for the trial to go ahead because he was facing financial hardship while assets were frozen.
A document filed in the court registry for Mr Davison said he believed Mr Arthurs was using the funds to build homes in the Mackay region on a speculative basis.
"[Mr Davison] is concerned that the Mackay region is showing signs of a significant downturn in the property market and in circumstances where judgment is entered for [Mr Davison] at a trial, [Mr Arthurs's] asset will be tied up in property that may take a significant time to sell," the document said.
Mr Arthurs, through legal documents filed in the court registry, said he would pay Mr Davison and his company Portfolio Housing a completion fee for each house, which was 50% of the profits.
This, he said, was the construction price Optima paid to M.J. Arthurs, less construction costs, consultancy fees, professional fees and administrative costs.
The case is expected to return for another mention about the proposed trial adjournment today.