Anne Gibson

Property editor of the NZ Herald

Long legal battle keeps owner of leaky penthouse out of pocket despite win

The view from Kevin Pugh's Herne Bay apartment. Photo / Getty Images
The view from Kevin Pugh's Herne Bay apartment. Photo / Getty Images

Kevin Pugh has twice fought off his neighbours in Herne Bay's luxury Shangri La tower, winning lengthy litigation over the building's repair.

The Court of Appeal has upheld a High Court decision stopping his neighbours from forcing his family trusts to pay a bigger share of the $6 million-plus leaky building repair bill.

It also ruled he must be compensated for being unable to inhabit his huge two-level penthouse on levels 15 and 16 for nearly two years while the place was fixed.

But Mr Pugh told the Weekend Herald the case had cost him hugely.

He said the body corporate committee went ahead without approval from several owners and the length of time his penthouse had to be empty during repairs was crippling. Owners of the lower 14 levels only had to be out five weeks each but his place had to be empty 18 months.

Extra engineering work was needed on level 15, partly to hang the new glass curtain wall from, he said.

But the place also suffered water damage because part of the roof was removed, welding operations attaching the curtain wall support beams caused fire damage and his place was used by the contractors as a workshop for the entire building.

"I am the thick end of $300,000 out of pocket on legal fees at this time. The two decisions might return about half of that in costs awards.

"I have probably gained about $80,000 on the differing cost split for the redevelopment and about $200,000 on compensation for loss of use of the penthouse," he said.

Mr Pugh, skipper of the motor launch MV Big Bud, said he sold his place last year for $4.75 million.

Residents John Hynds and Mike Clark and the body corporate's lawyer Campbell Walker would not talk about the situation this week.

But Neil Campbell, QC, who acted for Mr Pugh's family trusts LV Trust Holdings and KP Trust Holdings said he was pleased with the outcome.

Inside Kevin Pugh's apartment  while it was being used by the contractor.
Inside Kevin Pugh's apartment while it was being used by the contractor.

Shangri La, built 27 years ago, is one of two tall apartment towers on the ridge in the heart of the expensive suburb. Although the owners enjoy panoramic city and waterfront views, leaks caused heartache and damage for years, coming in around windows and external walls but primarily on the southwestern side of the tower where there are no balconies or overhangs to protect windows from bad weather, the court said.

Water was also coming in through the tiles on the level 16 balcony areas.

The High Court said that by 2008, the leaks were a major issue. So owners called in contractor Haydn and Rollett to carry out one of the city's biggest leak fix-ups, recladding that most exposed side with a new glass curtain wall up to level 15.

Work started in 2011 and by 2012 the building was bristling with scaffolding. Then the fighting started about how the bill was to be paid and the case went to the High Court.

One of the owners on the losing end of the litigation is Hollywood director Lee Tamahori who made Once Were Warriors.

The appeal court said it had good reasons to reject the body corporate's arguments.

"On appeal, the body corporate has attempted to challenge aspects of the factual findings made by (Justice Raynor Asher) in the High Court relating to the length of time the applicants were deprived of access to their unit and the extent to which that access was required for work for the benefit of all unit owners. We have not been persuaded by the submissions for the body corporate in support of these challenges," the decision said.

"There can be little doubt that all work relating to the installation and subsequent strengthening of the beams from which the curtain wall was to be hung was for the benefit of all unit owners."


Lap of luxury

Shangri La tower

• 17-level ex-leaky tower block at 97 Jervois Rd, Herne Bay
• Built 1987, fixed up 2011, 2012
• Repair job cost $6 million, neighbours in court over bill

- NZ Herald

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