New Zealand’s biggest leaky building case looms
NZ Herald
Anne Gibson Property editor
02 October 2016

Victopia at 135 Victoria St West is at the centre of High Court litigation.
Photo/Geoff Dale.


• 10-week leaky building case due to start October 10
• Initial $3m estimated repair bill "is now substantially over $40m"
• 201 owners bringing High Court case against many parties
• 110-week repair programme planned for Victopia
• Owners told they will have to leave units for 29 weeks

New Zealand's longest leaky building trial - and potentially most costliest - is due to start this month.

A court document shows how the body corporate and 201 owners of units in high-rise Auckland apartment block Victopia, on the corner of Nelson St and Victoria St opposite TVNZ, are suing parties in the High Court at Auckland in a case expected to last up to 10 weeks, finishing just before Christmas.

Repair costs on the apartment block were estimated at $3 million in 2012. But owners have now been told the total repair bill could now "approach $40 million".

Tim Rainey, a specialist lawyer, said that would be the longest case of its type in New Zealand - and if the claim or repairs reached $40m, also the most expensive.

Justice Matthew Palmer referred to the prospective length of the case after a hearing in May and a subsequent decision delivered in July.

"A 10 week trial of the proceedings is to commence on 10 October 2016," the judge wrote.

"The body corporate 346799 and 201 owners of units in the Victopia apartments at 135 Victoria Street West, Auckland, are suing a variety of parties over defects in the construction of the apartments including the developer, the builder, the fašade design company, the cladding installer, the Auckland City Council, and the membrane supplier," the judge said.

A timetable is in place leading up to the trial, he noted. It is understood that could result in timing changes.

A letter dated August 27, 2012 was sent to owners from a Body Corporate Administration stating: "The estimated cost to re-mediate the defects is approximately $3 million."

By March last year, owners were told how repairs would cost "over $12 million".

By July last year, lawyer Gareth Lewis of Grimshaw & Co wrote of a claim of $21.1m which had "increased significantly as a result of the updated estimate of remedial work costs provided by the body corporate's quantity surveyors".

But the minutes written after a March 3, 2016 extraordinary general meeting of the body corporate said: "The claim is now substantially over $40 million."

Lewis said this week he could neither confirm nor deny that.

A lengthy repair period is also envisaged.

"Owners will need to be out of their units for 29 weeks out of a total construction period of 110 weeks," the March 3 EGM minutes to the body corporate said.

Earlier this year, the council applied to be struck out of the proceedings specifically relating to alleged fire safety defects in the building.

"The council submits the fire safety defect aspects should be struck out because they effectively constitute a new cause of action which has been brought outside the limitation periods under the Limitation Act 2010 and the Building Act 2004," the judge's decision said.

But in a court submission, the body corporate said the fire safety defects issue was not a new cause of action but only particulars of damage under an existing one.

The judge said he gave "short shrift" to the council's arguments on that point and he declined the strikeout.

Lewis told the Herald he could not specify the cost or repairs but agreed the case could set a record for length: "There have not been any that have gone that long so far," he said of other weathertightness court cases.

Rainey, representing an owner who had opted not to be part of the litigation, said the case was unusual for length and the sums involved.

"The longest case to date is the Nautilus case running at six weeks," Rainey said referring to successful litigation over the prominent Orewa apartment tower where he acted for owners.

Nautilus owners won $25,072,507.80, the Herald reported on May 1 last year. That was the largest payout at the time.

Rainey also noted that a mediation meeting was scheduled between the Victopia parties on Tuesday.

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Cladding, balconies focus of NZ’s biggest leaky building case
NZ Herald
Anne Gibson
13 October 2016

The exterior cladding and balconies at the 16-level Victopia apartment block in central Auckland are suffering weathertightness defects, according to the lawyer representing owners bringing New Zealand's biggest leaky building litigation.

Gareth Lewis, the Grimshaw & Co lawyer acting for Body Corporate 346799 which is taking the $40 million action, told Justice Susan Thomas in the High Court at Auckland of issues with these two parts of the high-rise block at 135 Victoria Street West.

He showed the court photographs of the exterior building cladding and pointed out how sheets of materials had "dislodgement" or cracks and splits in them.

The cladding in the building on the Nelson St corner was a pressure-equalised system, Lewis told the court.

He then showed photographs of tiles on balconies in the building where he indicated there were also significant issues. Every apartment in the block has a balcony and on level 14, units have two balconies, he said.

Expert investigations were carried out into why these aspects of the block had failed, he said.

"The waterproof membrane has deteriorated," Lewis said, "and is either soft, mushy or tacky. It has not properly bonded and it had ceased to act as an effective waterproof membrane in that it would not repel water," Lewis said in his opening submissions.

"It is common ground that this condition is not what it should be. It's not supposed to fall apart like this. As a result of the failure, balcony tiles became lose, lifted, there are cracks in numerous tiles, the grouting has become dislodged and moisture has become trapped," Lewis said, describing how this was apparent when people walked on the balconies.

"It is not a normal balcony surface."

Problems arose due to an incompatibility between the tile adhesive and the waterproofing membrane, he said.

The judge asked if the balconies were common areas in the property or owned by individual apartment owners. Lewis said it was the latter.

She also asked if the balcony conditions posed any danger or created any safety issues, but Lewis said this was not the case.

"The waterproof membrane has deteriorated and is either soft, mushy or tacky. It has not properly bonded and it had ceased to act as an effective waterproof membrane in that it would not repel water."
—Gareth Lewis, Grimshaw & Co lawyer

Lewis this morning called expert witness Colin Lim, a specialist facade engineer of AECOM in Sydney and a lecturer at the University of Technology Sydney. Lim told the court how he had 30 years experience in the building industry, working in Australia and Asia.

He investigated issues at Victopia and said the cladding system in blocks like that was a rain screen and there could not be any cracks in that material or water would get in. He likened the cladding to a rain coat.

Victopia had three types of cladding systems, Lim said, covering different elevations of the block.

Cladding panels were erected on the site "almost like Lego blocks", he said.

The body corporate is suing developer KNZ International (formerly named Ganda Development Co Ltd and Dae Ju Developments Co Ltd), construction business Brookfield Multiplex, Auckland Council and Bostik New Zealand.

It reached a settlement with Facade Design Services before the hearing started, Lewis told the court yesterday.

The case is continuing and the defendants are yet to begin opening submissions or calling their witnesses.

However, Lewis said outside court yesterday that KNZ was not represented in the case by legal counsel.
 

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