Elderly buyers of seriously defective homes at Auckland's high-end Eastcliffe Ōrākei Retirement Village have started High Court action against the Ngāti Whātua Ōrākei developers, claiming more than $16 million.
Twelve residents aged between 77 and 91, whose homes were demolished last year after construction and watertight issues at the village fronting Bastion Point, are claiming breaches of the Fair Trading Act, the Residential Villages Act and the Contracts and Commercial Law Act by four entities associated with owner Ngāti Whātua.
The 12 had bought lifetime occupation licences to townhouses and apartments in six blocks in the village between 2005 and 2015. Of the $16m being claimed, about $9m is to meet the additional costs of buying comparable units in today's market.
Chief executive of the first defendant Ngāti Whātua Ōrākei Whai Rawa Ltd, Andrew Crocker, said the claims would be vigorously defended.
"We believe we have gone above and beyond legal requirements, have always acted fairly, with due care to affected residents and in accordance to our values of manaakitanga and kaitiakitanga.
"We are very disappointed that despite our offers this matter has resulted in legal action," he said in a statement.
The elderly group's statement of claim at the High Court at Auckland said the Eastcliffe village was built between 1999 and 2009. During and after construction it was marketed as a high-end retirement village in a prime Auckland location with superior lifestyle, views and amenities.
Auckland Council identified a number of construction-related issues during, and after, building of the village, which started in 1999.
Building was completed around 2009 without the issues raised by the council being addressed and without code compliance certificates for the six blocks at the centre of the claim.
In 2010 the council issued "notices to fix" building defects in the six blocks. Then followed more than six years of formal processes and disputes between regulators and construction parties and unsuccessful remedial consent applications, said the statement of claim.
Things came to a head in 2017.
Residents of one block involved in the law suit had to move out in January that year to enable remedial work to start. Two months later the council gave consent for the work to start.
Further defects were found and work stopped.
In November 2017 a defect investigation report was completed and an estimate received by the developer group of the cost to repair the six blocks, the claim said.
A month later Ngāti Whātua Ōrākei Whai Rawa made the decision to demolish the six blocks. Demolition started in March last year and has been completed.
Whai Rawa is chaired by Auckland businessman Michael Stiassny. The company is a wholly-owned subsidiary of Ngāti Whātua Ōrākei Trustee Ltd, corporate trustee of the tribe's trust, and the commercial arm of Ngāti Whātua Ōrākei Group, which is responsible for building and protecting the assets of Ngāti Whātua Ōrākei.
Second defendant is Ngāti Whātua Ōrākei Trustee, the corporate trustee of the Ngāti Whātua Ōrākei Trust.
Third defendant is Eastcliffe Orākei Retirement Care, responsible for managing the development of the retirement village, and a wholly-owned subsidiary of the first defendant.
Fourth defendant is Whai Rawa GP Ltd, general partner of the third defendant and a wholly-owned subsidiary of the second defendant.
The statement of claim said the elderly plaintiffs were not aware of the issues with the six blocks when they purchased their occupation rights and had no reasonable way of knowing about the issues when they bought.
The 12 residents bought their homes for between $575,000 and $865,000 between 2005 and 2015.
"It was only in late 2016 or 2017 when the ... defendants accepted the building defects would require substantial remedial works that they notified the residents..." said the claim.
The defective building issues were known to the Ngāti Whātua defendants since 2005, it said.
It was only "in late 2016 or 2017" when the four defendants accepted the building defects would require substantial remedial works that they told the residents.
The elderly plaintiffs had thought they were buying a home in a village environment for the rest of their lives. Instead they had been forced to move, some multiple times, as repair attempts were carried out, and since demolition, into other retirement villages, into temporary accommodation or into smaller apartments in the remaining buildings at Eastcliffe.
One 91-year-old woman has had to move three times.
All cite the detrimental effects of the uncertainty they've lived with as to whether the village could be repaired, and if, so how. Many claim health problems, depression and anxiety from the associated stress.
Among the significant losses and damages claimed are lost improvements to their village units, animal boarding fees, moving costs and the expense of setting up in new homes, often smaller and less suited to their personal needs.
Whai Rawa's Crocker said 34 residents affected by the demolition had since been housed in other homes within the complex or in quality Eastern Bays rental accommodation at Whai Rawa's expense.
He said the affected residents were offered three potential long-term solutions:
• Internal transfer which enabled them to move permanently to another residential apartment within the main building or into other blocks, subject to availability.
• Buyout which enabled them to move on from Eastcliffe by terminating their occupational rights agreement and accessing their funds to make alternative living arrangements. Residents who chose this option received the full in-going price they paid.
• Brand new apartment within the grounds of Eastcliffe retirement village.
"As kaitiaki of our hapū assets, we have a responsibility to our hapū members to protect their commercial interests. Therefore, we are prepared to vigorously defend the claims.
"As these matters are now before the court, Ngāti Whātua Ōrākei will be making no further comment."