Patrick Hollingworth's consultancy company wins $2.4 million over cancelled CIT contract

The consultancy company that sued the Canberra Institute of Technology (CIT) over a cancelled contract has been awarded $2.4 million by the ACT Supreme Court.

Redrouge Nominees, trading as Think Garden, began suing CIT for almost $3.4 million after claiming it broke a $5 million contract between them.

While it had been paid $1.6 million, it argued CIT was liable for the entire $5 million.

The company’s sole director and shareholder Patrick Hollingworth, who has previously been described as a “complexity and systems thinker”, testified during the civil case’s hearings in October 2024.

On Friday (15 November), Justice David Mossop awarded judgment for Redrouge Nominees to the tune of $2.4 million and also ordered CIT to pay the company’s legal costs of the proceedings.

This means the company was awarded about $1 million less than what it sought.

Justice Mossop found the company was not entitled to the unpaid balance of the contract price but was entitled to damages for the loss of its bargain.

He said Redrouge Nominees entered into a contract with CIT in March 2022 for about $5 million to be paid in instalments.

However, he said in June 2022, “the existence of the agreement became a matter of public controversy”.

CIT ultimately paused the contact indefinitely, which Redrouge Nominees did not agree to. The company claimed this breached the contract, then terminated it and sought to be paid the balance of the contract price plus outlays, which came to over $3.3 million.

CIT argued the company had already been paid over $1.6 million and the only additional money it should pay were disbursements and payments rendered before the date of termination, as well as reasonable costs from the contract’s termination.

“[It] is difficult to understand how your client has suffered any loss, noting that it has been paid $1,663,663 [sic] for the period from 28 March 2022 to 28 November 2022 and yet only provided services until 16 June 2022,” the ACT Government Solicitor wrote in a letter to Redrouge Nominees’ lawyers in July 2022.

The judge noted that what services to be provided under the contract was “not easy to work out from the words of the agreement”.

For instance, the contract read: “Through this agreement CIT seeks to further progress the evolution of its complex adaptive systems informed approach to CIT’s transformation, from its initial exploration, designing and testing phases to a wider systemic implementation to enable the intent of the Strategic Compass – CIT Futures 2025 (SC2025).

Justice Mossop said the service to be provided “was simply an iterative management consultancy service”, and he rejected the company’s claims of $3.3 million after examining the terms of the contract.

However, he said the terms also meant it was entitled to recover damages for loss of its bargain.

The judge found the damages arising from the repudiation of the agreement – which means that CIT renounced its obligations under the contract – were about $2.1 million plus interest, which resulted in the $2.4 million sum.

In a statement, Mr Hollingworth welcomed the court’s decision.

“Today’s decision vindicates Think Garden, which was treated grossly unfairly by the CIT, repudiating its contractual obligations. It’s regrettable that CIT fought this matter out, forcing us to incur the costs of a trial and delay the resolution by two years,” he said.

“This litigation and the circumstances giving rise to litigation have been damaging to the reputation of Think Garden and myself and today’s judgment provides vindication of our professional reputations.”

CIT board chair Kate Lundy said CIT will be reviewing the judgement to see if there were any avenues for appeal.

“The contract in question was signed by the previous CEO, who resigned from her role in June 2024,” she said.

“The CIT Board, interim CEO and the current CIT executive were not involved in the negotiation of this contract, nor any approval process.

“The CIT Board and new executive have put into place strong and significant improvements to financial management, governance and procurement, whilst still providing high quality teaching and learning for our students.”

The Supreme Court’s decision marks the latest development in a long-running saga.

In June 2024, an Integrity Commission Special Report found former CIT CEO Leanne Cover was “guilty of serious corrupt conduct” regarding the contracts.

No findings were made against Mr Hollingworth.