Repair funds at a defective Auckland apartment building are $23 million short after liable parties failed to pay what was due.
The owners of the 16-level Victopia, the inner-city block at 135 Victoria Street West opposite TVNZ, have been told that only $30m of the record-breaking $53m sum won in court have been paid.
The remaining funds are still owed by failed head contractor Brookfield Multiplex Constructions (NZ).
Last week, Body Corporate Administration general manager Paula Beaton wrote to Victopia's body corporate: "The current funds available will not be sufficient to complete work on the building."
She told of a meeting between body corporate committee members and the project director in charge of remediation, Ian Harris, setting the programme for 2020: "The increased scope of work on repairs to the building has placed significant pressure on the project budget and time to complete the work."
Teak Construction began fixing the block last year and work is now well underway, the building covered in scaffolding and shrink wrap.
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Last year, a 40kg fibre cement cladding panel fell from an upper level of the building on the Nelson St corner, resulting in road closures. Riggers working on the Victoria St facade installed plywood sheets on the corners of building panels which engineers had identified as needing reinforcement.
The owners are now considering chasing Brookfield Multiplex's insurer since three years ago, winning a claim against the business, now in liquidation.
"In 2017, the body corporate and owners in the building defects claim obtained a court judgment against the head contractor involved in the construction of Victopia Apartments, BMX, in the sum of $53m. Part of this judgment was satisfied by way of the $30m settlement reached with Auckland Council and the facade engineers, FDS and Ronald Hanley.
"The balance of BMX's total liability under the judgement (approximately $23m) remains unsatisfied because BMX is insolvent," the owners were told last October.
Brookfield Multiplex's Australian-based insurer had argued against liability in the Victopia claim because of a policy exclusion clause, owners were told.
But an Australian barrister engaged by Brookfield Multiplex's liquidators had provided an opinion which stated significant parts of liability are covered by the policy.
So the liquidators are looking at taking a claim against the insurer, the October 31, 2019, document from Victopia's body corporate committee said.
Via the body corporate committee's lawyers Grimshaw & Co, inquiries have been made of Australian litigation funder Litigation Lenders to see if it would provide funding. Litigation Lenders expressed an interest in funding Victopia's share of the costs for action against Brookfield Multiplex's insurers, owners were told.
But the litigation specialist would keep 25 to 40 per cent of what it won. Still, Grimshaw calculated that Victopia's owners could win more than $8m if any action succeeded.
"This would be very useful in assisting the Victopia plaintiffs to pay for their share of any shortfall in funding for the remediation," the October 31 letter said.
That asked owners to agree to authorise the committee to enter into arrangements to go ahead with the next steps in trying to recoup the money from the insurers.
The Herald has previously reported how Brookfield Multiplex was the main contractor on a number of buildings in New Zealand which suffered defects, including Orewa's Nautilus apartments, the Chancery shopping centre in inner-city Auckland and others.
Around 201 people or entities own Victopia apartments, developed about 20 years ago.