SkyCity-Macquarie parking stoush heads to court

The parking building was damaged in 2019’s international convention centre blaze. Photo / Janna Dixon

NZME

SkyCity Entertainment Group’s two-day scrap over a $220 million contract it had with a Macquarie Group subsidiary has begun in the high court in Auckland.

Justice Neil Campbell is hearing the court case over a concession agreement for a parking building damaged in 2019′s international convention centre blaze.

Macquarie subsidiary MPF Parking inked a deal with the casino operator, but SkyCity failed to remedy damage by the fire in the time stipulated, so MPF Parking terminated the contract, which was for roughly 3000 car parks until June 2048.

According to prior judgments in the matter, the compensation sum was defined in the agreement as “the market value of the concession calculated as at the date immediately prior to the destruction or damage” to the premises.

The casino operator wanted the court to decide whether the market value of the contract should be determined as at the day before the fire in 2019 or the day before the termination date, which was November 2022, a prior judgment of Justice Graham Lang said.

Prior judgments in the case show SkyCity argued it should pay $188m while MPF Parking’s arguments had been for $240m.

Witnesses begin

SkyCity’s first witness was Victoria University of Wellington accounting professor Tony van Zijl.

During his cross-examination, Van Zijl said the arrangement was made without knowing there was a fire.

He suggested there was double dipping because MPF Parking had the benefit of receiving ticketing revenue from the car parks that were completed – of which there were 1950 – as well as payments from SkyCity for the non-completion of the deal.

MPF Parking’s lawyer, Jenny Cooper KC, sought to undermine his credibility from the outset, pointing out that Van Zijl is not a lawyer.

“I am not a lawyer, I don’t have qualifications in the law, but I can read English, and I think my understanding of the concession agreement would generally be agreed with,” Van Zijl said.

Meanwhile, MPF Parking’s first witness was London Business School’s professor Chris Higson, who appeared by audiovisual link.

While he agreed that the market value of a transaction might be hypothetical, there were different interpretations of international valuations at the core of the dispute, he said.

“I bring to this my expertise of complex disputes, and it’s quite common, and there are good economic reasons to use the information at a later date rather than the date of valuation. My reading of it is that is the intention of the parties here,” he told the court during cross-examination by SkyCity’s lawyer, David Cooper KC.

The proceeding continues.

BusinessDesk reported last month that SkyCity Entertainment paid just over $13m in compensation to the Macquarie-owned entity operating its car parks in the 12 months to March this year.

That’s compared with $13.5m paid in the same period the year before because of the closure of the car park due to the fire at SkyCity’s NZ International Convention Centre (NZICC) and for the delayed handover of stage two of NZICC’s car parks.