Westin's investors win power over rooms

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A High Court decision allows owners of suites in The Westin Auckland to seize control of their property from early next month.

Justice Paul Heath heard two cases between suite owners in the 3-year-old hotel and Nigel McKenna's Lighter Quay Hotel Management which leases the suites from those owners.

But granting the owners possession from August 11 does not mean the hotel shuts. Westin said it intends to continue operating the $130 million property.

The judge said reporting of the case should stress everyone's desire to ensure the hotel's viability, which was particularly important because of the 2011 Rugby World Cup and the benefits it would bring.

Granting owners possession gave investors the ability to "control their own destiny".

Poh Kok Tan, Pei Siang Judy Chen and others v Lighter Quay Hotel Management involved 75 applicants owed $2.8 million for their rooms. the judge said. Colin Jee Fai Low and others v Lighter Quay Hotel Management involved 17 owners owed $975,000 for the rooms.

Both proceedings sought orders to cancel leases with McKenna's Lighter Quay and to get possession of land.

Philip Skelton, an Auckland barrister, said he was instructed to act for about 100 room owners by solicitor Jeffrey Lai of Anderson Creagh Lai.

Suite owners want control after not being paid by Lighter Quay.

"The respondent, Lighter Quay Hotel Management, operates the Westin Hotel under arrangements with the Westin chain. On that basis, the management company entered into leases so that units owned by individual owners could be used as hotel rooms in return for a specified rent," the judge said.

The owners' applications were unopposed by Lighter Quay, Judge Heath noted.

But KordaMentha stepped in at the 11th hour, wanting Wednesday's High Court hearing adjourned for a month, claiming the opportunity to negotiate business restructuring would be lost if the court did not delay.

The judge rejected that, saying the receivers were served with the proceedings on July 6 and had taken no steps until Tuesday evening.

Any restructuring opportunity would not be lost and it was in everyone's interest to come to a commercial compromise to limit losses.

Katie Donald, Westin sales and marketing director, said the hotel would stay open.

"It is our intention to continue to operate the hotel and we will be working closely with KordaMentha to reach agreement for that."

Other executives at the hotel agreed and said the closure danger was averted because of the way contracts to manage the property were struck after McKenna developed the hotel.

"Lighter Quay Hotel Management has a contract with Westin Hotel Management LP which manages the hotel," an executive said. "The staff here work for Westin, not Lighter Quay."

WHO'S WHO

* The Westin Auckland: Hotel in scrap over suite lease and payment deals.

* Owners: Court order for possession of their rooms from August 11.

* Lighter Quay Hotel Management: Leases suites from investor/owners.

* Starwood Asia Pacific Hotels & Resorts: Manages, runs The Westin Auckland

* KordaMentha: Receivers of Lighter Quay Hotel Management

* Nigel McKenna: Westin developer, Lighter Quay Hotel Management director