Skyline Enterprises, Naylor Love Central Otago and Wilson Contractors (2003) Ltd were sentenced in the Christchurch District Court yesterday following a prosecution by the Queenstown Lakes District Council.
The companies admitted a single charge each under the Resource Management Act of unlawfully discharging sediment and construction spoil on to land between March 13 and September 22 of that year.
Judge John Hassan said decisions made by the defendants in the months before the landslip were driven by "commercial expediency" in order to minimise the shutdown of Skyline’s gondola operation during the redevelopment of its top station.
The offending was a "serious dereliction" of their responsibility as corporate citizens and violated the community’s right to be "safe and secure in their homes".
Heavy rain on the night of September 21-22 — the highest 24-hour rainfall recorded in the resort town for decades — dislodged a stockpile of rock and soil that plunged down the Ben Lomond Reserve and on to several properties in the Reavers Lane area.
The slip forced the evacuation of 41 residents, damaged buildings and other property, and prompted the declaration of a state of local emergency.
The stockpile was largely formed over a few weeks during excavation work to enable the construction of an underground services tunnel.
Judge Hassan said the 3000 cubic metres of material far exceeded the amount allowed by the proposed district plan, and sat outside the boundary of both Skyline’s lease and its consent for the work.
It sat on the edge of a steep slope, without erosion and sediment controls in place.
"The physics of having an unstable pile of construction spoil and sediment on the brow of a steep slope, then adding heavy rainfall to gravity, is easy to contemplate."
Skyline had primary responsibility for ensuring the conditions of its resource consents were being met and although it was entitled to rely on the expertise of head contractor Naylor Love, should have been aware of the stockpile’s instability and the risk it posed.
Its failure to take action to address that risk was "highly careless behaviour".
However, Naylor Love was the most to blame "by some margin", the judge said.
It was either "reckless" or acted with a "level of incompetence not in keeping with its significant experience in the industry".
Wilson Contractors had a relatively minor role, effectively supplying machinery and people to Naylor Love.
However, its long experience in the earthworks industry meant its failure to recognise the stockpile was an "unstable-landslide-in-waiting" was careless.
Judge Hassan convicted the three companies and imposed fines and reparation of $310,900 on Naylor Love, $271,000 on Skyline and $121,600 on Wilson Contractors.
The reparation, which was allocated between the defendants according to their culpability, must be paid to the council for its legal and remediation costs, to a roading contractor for repairs to Reavers Lane, and to one Reavers Lane resident for emotional harm.
The prosecution was not related to a second slip during the same weather event, under the gondola cableway, which deposited forestry slash and mud on to Queenstown’s historic cemetery and the Brecon St area.
Skyline chief executive Geoff McDonald said in a statement the company was "devastated" about the slips and acknowledged the distress they caused to the community.
"Skyline takes its responsibility to its neighbours, the community and the environment very seriously."
Its remediation work was now "practically complete", with native replanting planned for next autumn.
The company’s 2025 annual report said it had spent $5.7million on remediation work in relation to both slips as of March 31, and expected to spend a further $3.7m in future years.
Naylor Love South Island general manager Greg Boland said the company admitted the charge at an early stage and recognised "we should’ve done better".
Although the incident had occurred during severe weather, the company "could’ve had better sediment controls in place", Mr Boland said.
"We will take away lessons from this."
