A Singapore businessman has taken a significant step in defending himself against a $56 million lawsuit over Queenstown’s Hilton Hotel complex.
Justice Matthew Muir has ordered the release of original construction contracts relating to two buildings on the site.
Developer Nigel McKenna’s $2 billion plans for the site, on the banks of Lake Wakatipu, collapsed in a mountain of debt in 2009 as the global financial crisis bit.
Singaporean David Yuen’s company, known as Austpac, had agreed to buy units in Kingston West and Lakeside West buildings if buyers who had paid deposits defaulted.
The receivers of McKenna’s Kawarau Village empire are suing Yuen over that unfulfilled guarantee.
But Yuen says the agreements were cancelled because the developer breached the agreement’s terms, including allegedly using inferior building materials and finish.
A High Court ruling earlier this year ordered the release of documents outlining any “changes” to specifications and materials.
It also ordered that an expert appointed by Yuen be given access to examine the buildings.
That expert has asked for the original plans.
Lawyers for Kawarau Village Holdings Ltd, the firm run by the receivers, objected.
They labelled the contracts “irrelevant” as they had not been seen by Yuen or the buyers.
But Muir, in his High Court ruling, agreed with barrister Bruce Gray’s submission on behalf of Yuen.
Gray said the original contracts might provide “the best evidence of the ‘extremely high quality of specification’ which was originally intended”.
Muir said: “Although not underestimating what work may be involved in identifying the relevant documents, I am left with the impression that at least one of the reasons the application is resisted at this stage is to secure a tactical advantage by requiring the defendant to specify the downgrades from the alleged ‘extremely high quality of specification’ in something of an information vacuum.”
He added: “Nor do I regard the application in the pejorative ‘fishing’ terms which the plaintiff employs.”
Muir highlighted an earlier affidavit that provided evidence of the Queenstown Lakes District Council’s concerns over the “continuous erosion” of the amenity values provided by the original “characteristics of design and materials”.
Earlier this year, Singaporean and Malaysian buyers of units at the site failed in their legal bid to have their deposits returned and were stung for $36 million in damages.
Stage one of the Kawarau Falls Station complex was completed – residential apartments and serviced apartments run as Hilton Queenstown and DoubleTree by Hilton Queenstown.
The complex is now owned by Chinese billionaire Jiang Zhaobai, of Shanghai Pengxin Group.
Otago Daily Times