$14 million in Queenstown leaky lawsuits

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Queenstown ratepayers should shiver in their shoes – the Wakatipu’s largest leaky-building
claim goes to mediation next month.

Greenstone Terrace’s body corporate and individual apartment owners are suing the council, builder Naylor Love and seven other parties.

The lawsuit claims the complex isn’t weathertight and needs re-cladding and re-roofing – estimate $7.5 million.

All 107 owners are also claiming for “depression, anxiety, stress, inconvenience and/or loss of enjoyment” – another $2.6m.

When Mountain Scene first revealed Greenstone’s lawsuit in 2011, the claim was ballparked at $5m – that’s now doubled.

“The rough estimates are about $100,000 per unit and there are 75 units plus compensation of $25,000 per person,” Greenstone body corporate chairman Steve Wilde says.

And that’s not counting legal expenses topping more than $1m, Wilde adds.

Greenstone lawyers have drawn a bead on Queenstown Lakes District Council as first defendant, claiming the local body:

• issued consents which breached the Building Code

• was incompetent in building inspections

• and wrongly issued code compliance certificates.

If ratepayers think insurance will cover any damages the council is ordered to shell out, they should think again.

As the leaky-home catastrophe proliferated, councils throughout the country progressively lost insurance cover.

According to the council’s 2012 annual report: “Any claims received subsequent to June 30, 2009 are not covered by insurance” – Greenstone’s claim was 2011.

Asked for reaction to the estimated claim climbing to $10m, council boss Adam Feeley says he won’t comment on Greenstone specifically.

“At a more general level, leaky buildings have presented many councils with considerable legal, technical and financial challenges,” Feeley says.

Feeley: “Our approach to all claims is to ensure issues of cost and causation are rigorously addressed to ensure we’re not exposed to liabilities that cannot be fairly attributed to us.”

The council boss asked his finance department to advise how much has been set aside in council accounts for leak claims but the information hadn’t arrived by deadline.

Wilde says some Greenstone apartments are “virtually uninhabitable”.

“You’re talking cracked ceilings falling apart with black mould,” Wilde says.

About 30 owners live in their units, some with young children, Wilde says.

Parents are “terrified” about their youngsters’ health because of damp and mould, Wilde says.

The High Court has ordered a mediation conference between all parties in late October.

An expert report commissioned by Greenstone owners will be presented to the conference to firm up repair costs, Wilde says.

“However, as far as we’re concerned, we’re going to court in February next year – but we’re open to negotiation,” Wilde says.

Naylor Love boss Rick Herd won’t comment because the dispute is before the court.

One player not caught up in the legal battle is developer Tim Manning, whose Taradale Developments built Greenstone Terrace in 2001-02 – Taradale Developments was put into liquidation in 2004. 

Manning popped up again in Queenstown last month, announcing a $4m upgrade of his Coronet Peak Hotel.

Wilde: “If Tim has all this money to invest in Coronet Peak’s redevelopment, he might also consider he has a moral obligation to put his hand in his pocket for part of the cost of putting Greenstone Terrace right.”

Manning says he’s “a wee bit in the dark” about Greenstone problems but admits there was a historic condensation problem.

“Naylor Love and ourselves got together and fixed all that at no cost to the owners – I thought that was the end of it and I’ve heard nothing from anyone since,” Manning says.

The council issued a code compliance certificate on Greenstone, Manning says, adding: “Which was my obligation.”

“I’ve been around 25 years, I’ve developed 2000 apartments or houses and I do stand by them.” 

Manning says he’ll contact Wilde when he’s next in Queenstown.