"He took it up there for a test run. It was the first time he'd tried to drive it, but I'm not sure if it was the first time he'd started it up," he said.
"His partner and neighbour were there at the time, they saw it."
The investigation was in its early stages, and an engineer who was a hovercraft expert was assisting police.
"He's going to come in and have a look at the device and tell us what his feelings are about how it's been built and everything else - how it failed and why it failed."
Mr Nuttall said anyone could build or fly a hovercraft in New Zealand. No licence was needed to operate them.
"As far as we can tell at this stage, it's completely unregulated.
"The only thing you can't do is use it on a road.
"You'd need a warrant of fitness and registration for that, and you'll never get something like that warranted or registered."
A former member of the Hovercraft Club of New Zealand, Ashley Shaw, said the craft were generally safe. He had built his own from scratch.
"To make them, it's a piece of cake. I designed my own," he said.
"Hovercraft are inherently very, very safe and simple devices. They are quite stable."
Maritime New Zealand is assisting police with the investigation.
