Leaky building case: $120m+ Queenstown apartment complex litigation could exceed $140m 40-level Auckland tower claim

The owners of a leaky Queenstown apartment complex are suing for more than $120 million – with one unit-holder saying the claim has now hit $160m. At that level, the action would set a New Zealand record for a leaky-building claim.

Court decisions show Oaks Shores at 327-343 Frankton Rd has “numerous defects” and owners are seeking at least $120m. They are taking action against the local council and many other parties for what they claim are significant problems with their properties.

One unit owner told the Herald this month that the claim has grown since the $120m proceeding lodged two years ago. It now exceeds $160m, he said. The lawyer acting for the owners, Gareth Lewis of Grimshaw & Co, did not respond to questions about the amount.

New Zealand’s largest claim so far is $140m for issues with the 40-level Harbour Oaks tower on downtown Auckland’s Gore St. That case goes to a full hearing from May 2.

The Queenstown and Auckland properties are operated by The Oaks hotel chain. In both cases, the hotel operates some of the units, while others are occupied by their owners.

In the High Court at Christchurch, Justice Cameron Mander cited 18 faults in the Queenstown properties, including problems with balconies, roof and barge junctions, fire defects, structural, bathroom pods and cladding cavities.

Initially, costs were estimated to be about $75m but by November 2020, the estimated costs were put at $120m. Additional sums are being claimed for lost rents and profits, people having to move, store their goods and clean the places.

Owners have begun repairs on the blocks.

Body corporate 355492, John Robert Chestney and others are suing the Queenstown Lakes District Council, Elliott Architect, Edwin Gerard Elliott, Holmes Consulting Group, Arch Underwriting at Lloyd’s, Asta Managing Agency, Hardy (Underwriting Agencies), Liberty Managing Agency, Stephen Bruce McLean, Julie Raewyn Wensley Jack, Peter Lawson, Daniel Steward, De Geest Construction and de Geest Bathrooms.

The council applied to be struck out of the case. It said its last involvement with the project was in 2007 when it did the last inspection and issued code compliance.

However the plaintiffs say the council was negligent in issuing building consents, inspecting the works and issuing the code compliances, amounting to negligent conduct.

The latest court decision notes the Oaks Shores complex was built from early 2004 through to 2006.

Soon after it was finished, the plaintiffs said they noticed defects: “The plaintiffs say the building appears to be leaking.” Allegations were made that the building suffered weathertightness and structural issues.

Some repairs have been carried out. The council granted a building consent for repairs to block 1 in 2019 and those works were carried out from then until November last year, a court decision showed.

Repairs to block 2 were consented last August and started in November. Those are due to be completed by next June.

The Herald reported this month that the owners of Auckland’s Harbour Oaks, one of New Zealand’s tallest apartment blocks, were suing for building defects in the $140 million case – the largest of its type in this country.

Unit title owners in the 40-level, 406-unit Harbour Oaks, at 16 Gore St near Britomart, are suing parties they blame for defects, according to court documents.

Last June, Justice Tracey Walker described the case as being of “immense proportions”.

In preliminary hearings, one of the defendants, Auckland Council, has already argued against orders in the case, saying they were wrong. But the full, substantive hearing in the case is yet to proceed.

The Harbour Oaks matter has been brought to court by Body Corporate 366567, Amer Ltd and others.

They are suing Auckland Council, Clark Brown Architects, Equus Industries, Mapei New Zealand, Aquastop, Charles Norager & Son, Firepel Kidd, Holmes Fire & Safety, MacDonald Barnett Partners, Holmes Structures, Chenery Contracting and Brookfield Multiplex Constructions (NZ), which is in liquidation. Action against De Boer Waterproofing Solutions and Holmes Structures was discontinued.

Given that Oaks operates the Auckland and Queenstown properties, the Herald asked the hotel chain about its liability and how it regarded the safety of its guests.

A spokesperson in Australia said no response would be made. Liz Evans, PR and communications manager of the global Minor Hotels in Brisbane, which operates Oaks properties in this part of the world, said: “We are unable to comment on this issue as it is part of a court case that is underway”.

Minor says it is an “international hotel owner, operator and investor with more than 530 hotels in operation”.

Real estate agents are advertising a level 37 Harbour Oaks unit for just $399,000.

“Great, central location in Gore St only a few minutes walk to the Viaduct Harbour, Britomart Transport Centre, Queen Street shops or Auckland University. The building has 24/7 hotel reception and fully secured swipe card access to the apartment,” say agents at Barfoot & Thompson.

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