Queenstown ratepayers might have to fork out for yet another costly leaky building claim.
The council announced yesterday it has been caught in a $7 million claim over Queenstown Hill apartment complex Heritage Heights, on Anderson Heights.
The case will be heard in Invercargill’s High Court in July.
Last July, the council faced 11 weathertightness legal claims, according to its latest annual report.
Council planning boss Tony Avery says the council doesn’t have any remaining insurance cover for the claim and there’s nothing set aside in its long-term plan.
That leaves ratepayers to pick up the tab for court-ordered payouts - with every $1m averaging $45 per rateable property.
Avery says the council’s targeted because it’s “often the last entity standing despite who built it”.
Given the pace of development in the resort, weathertightness claims are always a risk, he says.
“We try and manage that risk [but] a lot of those claims come from historical practice.”
The council’s contracted engineers Beca to drill boreholes in the land around the apartment block, from today until April 8.
The claim’s being taken by the body corporate and owners of Heritage Heights, claiming 42 weathertightness and structural defects.
Five parties are in the firing line - the council, Heritage Heights Ltd, AS Major Consulting Ltd, Sinclair Bros Building Ltd and one of its directors Graham Sinclair, who’s been declared bankrupt.
They’re seeking $7,082,200 for the cost of repairs, along with consequential losses for the owners, the loss on sale of $230,000 in respect of one owner, compensation for “distress, anxiety, inconvenience and loss of enjoyment” and stigma, as well as interest and costs against all five defendants.
Heritage Heights Ltd was a 50-50 joint-venture development company, co-owned by Sinclair and his brother Stephen, and Invercargill investors Donald Erskine and his sister Janice MacLeod.
Sinclair Bros built the apartment complex between 2002 and 2006.
At the time, Mountain Scene reported the council whacked a stop-work notice on it before successfully prosecuting the building company and the joint venture under the Building Act.
In May 2012, Heritage Heights Ltd won a High Court judgment against the building company, including $716,469 as compensation for construction defects.
But by September of that year no money had been paid.
Sinclair Bros was a member of the Master Builders Association but was removed from the Companies register in March last year.