Leaky apartment claim in resort may set record

Oaks Queenstown Shores Resort in Queenstown’s Frankton Rd. PHOTO: CASS MARRETT
Oaks Queenstown Shores Resort in Queenstown’s Frankton Rd. PHOTO: CASS MARRETT
The owners of a leaky Queenstown apartment complex are suing for more than $120 million — and one unit-holder says the claim has now hit $160 million.

At that level, the action would set a New Zealand record for a leaky-building claim.

Court decisions show Oaks Shores in Frankton Rd has "numerous defects" and owners are seeking at least $120 million.

They are taking action against the Queenstown Lakes District Council and many other parties for what they claim are significant problems with their properties.

One unit owner said the claim had grown since the $120 million proceeding lodged two years ago. It now exceeded $160 million, he said.

The lawyer acting for the owners, Gareth Lewis of Grimshaw & Co, did not respond to questions about the amount.

In March, a legal budget blowout for the council was attributed to costs related to the claim.

Oaks Shores was developed by Invercargill-based Ross Wensley, whose companies have since been declared insolvent.

In December last year, Mountain Scene reported the estimated repair bill was $120 million and its body corporate was suing the council.

It is the third Frankton Rd apartment complex developed by Mr Wensley to have problems.

New Zealand’s largest claim so far is $140 million for issues with the 40-level Harbour Oaks tower in downtown Auckland. That case goes to a full hearing from May 2.

The Queenstown and Auckland properties are operated by The Oaks hotel chain. In both cases, the hotel operates some of the units, while others are occupied by their owners.

In the High Court at Christchurch, Justice Cameron Mander cited 18 faults in the Queenstown properties, including problems with balconies, roof and barge junctions, fire defects, structural, bathroom pods and cladding cavities.

Initially, costs were estimated to be about $75 million but by November 2020, the estimated costs were put at $120 million. Additional sums are being claimed for lost rents and profits, people having to move, store their goods and clean the places. Owners have begun repairs on the blocks.

Body corporate 355492, John Robert Chestney and others are suing the Queenstown Lakes District Council, Elliott Architect, Edwin Gerard Elliott, Holmes Consulting Group, Arch Underwriting at Lloyd’s, Asta Managing Agency, Hardy (Underwriting Agencies), Liberty Managing Agency, Stephen Bruce McLean, Julie Raewyn Wensley Jack, Peter Lawson, Daniel Steward, De Geest Construction and de Geest Bathrooms.

The council applied to be struck out of the case. It said its last involvement with the project was in 2007 when it did the last inspection and issued code compliance.

However the plaintiffs say the council was negligent in issuing building consents, inspecting the works and issuing the code compliances, amounting to negligent conduct.

The latest court decision notes the Oaks Shores complex was built from early 2004 through to 2006.

Soon after it was finished, the plaintiffs said they noticed defects: "The plaintiffs say the building appears to be leaking". Allegations were made that the building suffered weathertightness and structural issues.

Some repairs have been carried out. The council granted a building consent for repairs to block 1 in 2019 and those works were carried out from then until November last year, a court decision showed.

Repairs to block 2 were consented last August and started in November. Those are due to be completed by next June.

Given that Oaks operates the Auckland and Queenstown properties, the Herald asked the hotel chain about its liability and how it regarded the safety of its guests.

A spokesman in Australia said no response would be made.

The New Zealand Herald/Additional reporting Mountain Scene

By Anne Gibson