Regional Express (Rex) has abruptly pulled out of a deal to lease the hangar formerly owned by Douglas Aerospace from Wagga City Council.
Rex issued a statement on Friday night announcing it was terminating its agreement with council, owing to council “wilfully and deliberately” failing to remedy “material breaches of the agreement”. The statement from Rex did not stipulate what the alleged breaches by council were.
“Despite constant requests to remedy the material breaches, WWCC has wilfully and deliberately not remedied the material breaches,” the Rex statement said.
“WWCC thereby in its action has repudiated the agreement and Rex now considers the agreement terminated by repudiation.”
The mess over the hangar, built using $2.5 million of ratepayer money, now appears almost certain to end up in court, with both Rex and Wagga City Council announcing they would seek legal advice in separate statements.
Rex plans to “pursue legal avenues to recover damages due to the repudiation, while Wagga City Council is expected to seek advice on Monday before commenting further on the dispute.
Mayor Rod Kendall and council general manager Alan Eldridge issued a short joint statement on Saturday night to respond to Rex’s announcement, which said council had been negotiating with the airline “in good faith”.
“Given the extensive negotiations that have taken place, Council is both surprised and disappointed by Rex's claims,” the joint statement said.
“Council is seeking legal advice and will be in a position to comment further once it has been received. Rex and council have a long and successful partnership in Wagga and council hopes this can continue.”
Rex’s move to back away from its lease of the hangar is the latest blow council has received over the much-maligned facility, which was originally built by Douglas Aerospace with a $2.5 million loan – a loan it defaulted on earlier this year. The airline was believed to be in negotiations to buy the hangar.
