A confidential settlement has been reached on a $7 million leaky building claim involving the Queenstown Lakes District Council.
The Otago Daily Times reported in March the Heritage Heights body corporate and 12 unit owners had lodged a claim against five defendants — the council, joint-venture development company Sinclair Bros Building Ltd, bankrupted Sinclair Bros director Graham Sinclair and AS Major Consulting Ltd.
Seven third parties were also listed including Invercargill engineer Tony Major, found to be largely responsible for the 2010 collapse of Stadium Southland’s roof.
The claim was to have been heard in the High Court in July.
However, council chief executive Mike Theelen said those proceedings were withdrawn "as the claim has been settled between the parties".
"The terms of the settlement are confidential and accordingly we are not able to provide further details."
The 43-page statement of claim lodged by the plaintiffs said the Queenstown Hill units were constructed by Sinclair Bros between February 2002 and April 2006, during which time the council carried out inspections, ultimately issuing a code of compliance.
The body corporate lists 42 defects with the apartments, largely relating to weathertightness and structural issues, and was seeking compensation from all five defendants.
It said "extensive repairs" had cost owners about $7,082,200; consequential losses included rental income, cost of alternative accommodation and insurance, including increased insurance premiums, while one unit owner had suffered a loss on sale of $230,000 — "the unaffected value of $320,000 less the sale price of $90,000".
Unit owners also claimed general damages for "distress, anxiety, inconvenience and loss of enjoyment", and post-remediation loss in the value of their properties, estimated to be 5% of the value.
The apartment complex was a 50-50 joint-venture development, co-owned by Sinclair Bros Building principals Graham and Stephen Sinclair and Invercargill investors Donald Erskine and his sister, Janice MacLeod.
Issues dated back to 2004 when the council put a stop-work notice on the building before successfully prosecuting Sinclair Bros and the joint venture — the brothers were prosecuted as project manager and on-site foreman and were convicted on 17 charges.
In May 2012, Heritage Heights Ltd obtained a High Court judgement against the building company and the brothers, the court ordering $750,858 in compensation, primarily for defective building work.
By September 2012, no money had been paid.It was one of several similar cases the council faced, including one lodged by unit owners of the Oaks Shores Apartments, an 84-unit Frankton Rd development, last July.
In 2013, the ODT reported the council had been involved in 18 weathertightness claims, including 14 resulting in a council payout — its share of settlement costs at that time totalled $3.28illion, rising to $3.6illion when legal costs were included with potential exposure from other unresolved claims totalling another $10.9 million.
The council did not have any remaining insurance cover for those claims and no financial provision in its long-term plan to meet any claims.
That meant any court-ordered payout would come from ratepayers.
