$35m bill to fix 16-level Auckland waterfront apartment block: Owners must share costs

The Scene apartment blocks between Beach Rd and Quay St. Photo / Martin Sykes

A prominent Auckland waterfront apartment block will cost $35 million to fix, court documents show, and action is planned against the Auckland Council to recover that amount.

But owners of the 16-level, 134-unit Scene One block have just lost an appeal against sharing the bill to pay for repair investigations and fixing the high-rise.

Justice Pheroze Jagose in the High Court at Auckland rejected an appeal from owners Ian Gibson, Diana Petrie, Paul Merkel, Stephen Rogers, Christopher George Boyce and W.R. Trustees of the Scene One owners' committee in a case against Paul Doole's Kupe Trustees and Kupe Trustee Company No 2 over leak repair investigations and costs.

Scene One at 2 Beach Rd was one of three blocks built around 2003 on land owned by Ngāti Whātua.

The decision dismissed the owners' appeal against arbitrator and ex-High Court judge Rodney Hansen's decision from last November about who pays the leak probe costs.

"Kupe and the sub-lessees have commenced High Court proceedings against Auckland Council to recover the estimated $35m cost of repairing the defects and damage," the judge said.

An Auckland Council spokesperson today confirmed legal action over Scene One. A trial date has been set for February 2022. The case was due to be heard last month, but was postponed because of Covid-19.

Doole is an Auckland property investor who for many years owned Queen St's historic St James Theatre, since sold to interests associated with Steve Bielby.

Doole todayquestioned whether it would cost $35m to repair Scene One. Some repair work had begun, he said.

Ngāti Whātua Ōrākei Whai Rawa owns the land the apartment block stands on but Doole's Kupe bought the leasehold interest from Tony Gapes whose business developed Scene One, Two and Three.

The court decision of the development. It said that, in 2003, Ngāti Whātua granted a 150-year lease to Oriental Limited but, in 2006, Kupe became the lessee.

"Between 2012 and 2014, Kupe discovered that there were weathertightness issues which, upon further investigation by expert consultants, were found to have arisen wholly or partially from defects in the original design and construction of the Scene One building," the judge said.

Because of the defects, Scene One does not comply with Building Code when it was originally built.

"Kupe has incurred costs to investigate the defects and to conduct interim repairs," the judge said, so it charged the apartment owners a share of the costs of the interim repairs and the costs of investigating the defects as operating expenses under the subleases.

It was not "reasonable or equitable" to leave Kupe to pay all the costs, the decision said.

A Scene One apartment last year reportedly sold for $20,000. The one-bedroom-plus-study unit had a large deck, is tastefully decorated and has uninterrupted views across the harbour. The property was listed with apartment specialists City Sales. Its owner bought it in December 2002 for $311,200, QV, records show.

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