Court documents say the defects, discovered in late 2020, consisted of a 50mm-60mm difference between the floor levels of the pods and hotel room living spaces, and the failure of waterproof membranes that allowed leakage into the building’s structure.
The absence of protection for service penetrations through fire-rated walls and floors meant the building had “never met the passive fire protection requirements of the New Zealand building code”.
The two entities claim the council was negligent in carrying out inspections and issuing the code compliance certificate for the building work.
The council denies negligence and says the claim is outside the time limitation period.
It also claims KVHL failed to do due diligence when it took over the construction project, failed to remediate the defects and did not properly maintain the building.
Associate Judge Paulsen’s decision is concerned with the disclosure of documents by the parties before a trial in the High Court at Christchurch scheduled for July next year.
In the past two years, the council has settled two large weather-tightness claims with borrowing that will hit the district’s ratepayers for decades.
A council report last month said that of the 13.6 per cent average rates increase proposed for 2022-23, 4.03 per cent related to the cost of that borrowing.
In December, it reached a confidential out-of-court settlement with Oaks Shore apartment owners, who had been suing it and other parties for $169 million.
In 2021, it paid $40 million to settle a claim by the owners of Oaks Club Resort.
The Hilton hotel development was initiated by Auckland developer Nigel McKenna, who led the project until his Melview Group was put into receivership soon after construction began in 2009.
The receivers set up KVHL and bought the development in 2010, completing it the following year.
