A "complexity and systems thinker" is suing the Canberra Institute of Technology for almost $3.4 million, alleging the institute breached an agreement when it suspended a two-year contract for nearly $5 million of work.
Patrick Hollingworth's company, Redrouge Nominees trading as Think Garden, is suing the institute in a civil case in the ACT Supreme Court claiming to have "suffered loss and damage".
The $4.99 million contract was suspended by the institute after the Integrity Commission announced it was investigating the awarding of more than $8.7 million of contracts to Mr Hollingworth over a five year period.
Think Garden maintains the institute "repudiated the agreement", claiming if it was terminated CIT was liable for the entire $4.99 million contract. CIT has denied there was a "common intention" for this.
Mr Hollingworth's company is claiming a series of service agreement breaches, alleging the executive team failed to attend workshops designed to identify "patterns that lead to dysfunction".
The institute's chief executive Leanne Cover has been stood down for the past year while the commission's investigation is under way into the awarding of at least six contracts. The $4.99 million contract was the largest of those.
It included an agreement to provide services to "detect early/weak signals and build trends to improve products and services" and "establish and self-sustain practices that allow for iterative learning cycles across a range of temporal (weeks, months, years and decades) and spatial (individuals, teams, departments, colleges/divisions) scales".
Mr Hollingworth has already been paid nearly $1.7 million for this contract, which was supposed to run for two years.
An amended statement of claim alleges the institute breached the agreement on multiple occasions.
The services agreement, entered into on March 28, 2022, is said to require CIT to hold monthly contract meetings and to ensure its personnel cooperate with Think Garden
Court documents allege on June 7, 2022, the CIT executive team failed to attend an all-day workshop conducted on campus by Mr Hollingworth. This was the day the ACT opposition started publicly questioning the contracts.
The focus of the workshop was on "designing the methodology and program for reconfiguring CIT".
The next day, it is alleged the team once again failed to attend an all-day workshop organised to allow them to "complete their all-of-system maps and other associated governance and structures documents".
At this time, CIT also allegedly cancelled a two-hour meeting scheduled with the executive team.
On June 27, 2022, CIT indefinitely paused the agreement. This was just days after the Integrity Commission announced it was investigating the matter.
In response, Think Garden informed CIT it "did not agree to the pause indefinitely" and "remained committed to the agreement".
By July 7, Think Garden provided a formal notice to CIT, claiming it was in breach.
The alleged breaches included the institute cancelling meetings, placing a pause on the agreement, and "staff not engaging with Think Garden".
Later that month, Think Garden provided notice of termination of agreement, demanding that no later than 4pm on July 28 the institute pay $3.35 million in outstanding money.
CIT paid just over $9100.
An Auditor-General's report revealed last week that Think Garden's proposal was more than $2 million higher than any other offer.
Two other companies applied for the tender and the value of the tenders were $805,183 and $1,979,000, respectively.
Think Garden initially put forward an offer of $5,680,000 but offered the institute a 12 per cent discount as a "preferred client" if the fees were paid up front.
Following negotiations it was agreed payment would be provided on "five time-based milestones" and the first would occur on the execution of the contract.
Court documents show the payments were for nearly $1.7 million in March 2022, more than $1.2 million in both November 2022 and May 2023, $812,498 due in November 2023 and the final payment of $20,000 in March 2024.
The case is set to return to court on October 31.
