TechnologyOne is threatening to sue Brisbane City Council for $50 million in damages over a contract dispute

Photo: Glenn Hunt/Getty Images.

Update: comment from Brisbane City Council was added since the original version of this article.

One of Australia’s largest publicly listed tech companies, TechnologyOne, has threatened to sue customer Brisbane City Council (BCC) for more than $50 million.

The two parties have had a public dispute over the delayed $122 million “local government systems” project since January when lord mayor Graham Quirk accused the company of a budget blow out of more than $60 million.

The council had paid $20 million when it stopped paying the software company in October last year, accusing it of missing deadlines.

While TechnologyOne has denied it contributed to cost and time overruns, the council has sought to renegotiate the contract or terminate the deal – a stance that forced the tech company to issue a statement to the ASX today about the dispute.

“[Brisbane City Council] has made it clear through both its actions and its statements that it does not want to complete this project, and is endeavouring to engineer a termination of the contract for breach,” read the statement.

“TechnologyOne has now made it clear to BCC if they proceed with a wrongful termination, TechnologyOne will immediately commence proceedings for a $50+ million damages claim.”

The company added that if Brisbane wanted to wind up the project, the better option would be for the council to pay out “all outstanding invoices”, which would be “substantially less than the cost of a long and drawn out court case that exposes Brisbane ratepayers to a $50+m damages claim”.

A Brisbane City Council spokesperson said that its show cause notice served to TechnologyOne had detailed allegations of “material breaches of the contract” against the software company to justify a termination of contract.

“Council is reviewing and giving due consideration to a formal response received from TechnologyOne on 17 July 2017,” the spokesperson said.

“Council is committed to ensuring the best outcome for Brisbane ratepayers. As this is a legal matter between the two parties, no further details can be provided at this stage.”

TechnologyOne executive chair Adrian Di Marco said that even though the lord mayor indicated the project needed to be reformed, the council’s actions had not matched that sentiment.

“If BCC lawyers had not assumed control of this project after the lord mayor’s inaccurate press conference in January, and common sense had prevailed, we would still be on track to meet the contracted go live date,” he said.

“TechnologyOne at all times remains ready, willing and able to complete the BCC contract.”

A short time ago, TechnologyOne shares were down 1.8% to $5.48.