Lawyer describes payout awarded to leaky Orewa tower building’s 150 owners as a ‘debacle’ for council.
Auckland ratepayers face paying a share of $25.07 million in one of New Zealand's biggest leaky building cases.
The 150 owners of the 12-level Nautilus tower in Orewa were awarded the payout in a decision released yesterday by Justice Murray Gilbert.
Rainey Law's Tim Rainey, one of the lawyers who acted for the owners, said Auckland Council was liable for paying the full amount but could then seek to recover part of that money from other parties.
Mr Rainey claims he offered a settlement of $15.07 million on behalf of the owners before the six-week trial. But he said the council did not respond.
"The council never made a settlement offer to the owners. It seriously misjudged its legal responsibilities here. We made settlement offers including one which would have saved $10 million which the council didn't even do us the courtesy of responding to. This case is a complete debacle for the council," Mr Rainey said.
Council building control general manager Ian McCormack said: "With regards to the comments purported to have been made by Mr Rainey about settlement, the council's solicitor has contacted him to discuss these."
He pointed to the possibility of fighting the ruling.
"We will now take some time to consider whether an appeal is appropriate. We acknowledge that along with the other parties including Brookfield Multiplex - a building company that operates internationally - Walker Architects - a local architectural company - and Charles Norager - a local water-proofing company - we have been found liable for losses associated with the repair of the Nautilus."
But Mr Rainey said some of the defendants including Brookfield Multiplex Constructions (NZ), Walker Architects and Facade Technologies were in liquidation so no money could be claimed from them.
Mr McCormack said what portion of the $25.07 million the council would pay was undecided.
"As the court did not find the council liable in respect of all of the allegations made and the court also deducted sums from the amounts claimed for the cost of repairs and also made findings of contributory negligence, it is too early to say with certainty what the final judgment sum will be. The solicitors for the owners and the council have agreed that they will work towards identifying that sum as soon as possible," Mr McCormack said.
Jo Holmes of the Auckland Ratepayers' Alliance was amazed at the sums involved. "That's a humongous settlement and it's absolutely not good value for ratepayers. People will be disgusted that their rates are going on things like this," she said.
Trevor Corin, chairman of Nautilus's body corporate and the settlement committee, said owners endured six years of hardship after discovering issues in 2009 and many like him were retired or semi-retired.
"A lot of people who shifted in were retired then were hit with this and straight away all the money saved might have had to be paid to get the building fixed. It was all those years of uncertainty and frustration," said Mr Corin, who spends weekends in his 11th-floor apartment but lives in Manurewa.
The prospect of the council paying so much worries him.
"We've paid rates but I do feel for ratepayers. On the other hand, I also feel for what we've gone through and what was done to us.
"The amount we're getting compensates us," he said.
Owners of the block spent $2 million on the litigation over the building, constructed by Brookfield Multiplex (NZ) from 2002 to 2004.
It was certified by Rodney District Council but after territorial authorities were merged into the supercity, Auckland Council took over.
Nautilus owners won:
$21,958,133 remediation costs
$1,800,000 general damages
$1,284,673 consequentials (lost rent, alternative accommodation costs, storage of items, etc)
$29,701 interim repair costs
$25,072,507 total. Further $1 million costs, including $800,000 expert witness fees, yet to be decided
Who pays what?
Auckland Council has been ordered to pay $25.07 million but might seek to recover some of that from other parties.
When will the money be paid?
There is no set timeframe but the Nautilus lawyers will write to the council shortly and anticipate payment will be made in a few weeks.
Will individual owners be paid money?
No, the money will stay in a trust fund and be used to repair the building.
What about people who have sold?
Two ex-owners will get money directly because they claimed for a loss on sale.
When will the block be fixed?
Work will begin later this year.