Unit owners of Oaks Queenstown Shores Resort had been suing the Queenstown Lakes District Council, and other parties, for $162.9 million, in a case due to be heard in the High Court at Christchurch on February 7.
The owners’ body corporate was suing the council for its role in issuing building consent for the 84-unit Frankton Rd apartment complex in the mid-2000s.
It was not suing the development company, headed by Invercargill’s Ross Wensley, as that later went bust.
The settlement is confidential, but the council a year ago paid $40 million to settle another leaky-building claim, including legal fees, taken by the owners of another nearby Wensley complex, the 41-unit Oaks Queenstown Club Suites.
Oaks Shores body corp chairman Graeme Kruger — representing 73 owners — confirmed his organisation, and the council, had reached an agreement "that is acceptable to both parties".
The council’s offer went to a settlement committee of unit owners, he said.
"The owners accepted council’s offer because we felt it was a respectful offer and it took into account our evidence and the complexity and the pain.
"I’ve had emails and telephone calls over the last week all around New Zealand — more than 60% [of unit owners] are New Zealand citizens and residents — who were relieved that the litigation process is now behind them."
Now they could focus on repairing the building "to a state it should have been in, in the first place, when they purchased it", Mr Kruger said.
"And some of them broke down in tears."
He said his body corporate had raised about $40 million in special levies from owners.
That had gone into "repairing Block 1 and for all the investigations and the legal process and then continuing the start of Block 2".
"That stretched owners, probably, to the max."
In one case, the body corporate had got summary judgement against one owner who had refused to pay his $640,000-plus share in special levies, interest and other costs, as a result of which it had sold his unit.
Mr Kruger confirmed the council payout would allow the body corporate to fix the remainder of Block 2, and also Blocks 3 and 4.
Any money left would be redistributed to owners based on the levies they had paid.
He said about 20% of the total repair cost was being paid by the Government’s leaky-home financial assistance package.
According to the evidence of a quantity surveyor for the now-cancelled court case, repair work for the four blocks, podium and car park — including professional and consent fees, insurance, incidental costs and GST — was estimated to come to $152.46 million.
In September, the council — in a submission to the Ministry of Business, Innovation and Employment — said the rates impact of the $162.9 million claim was to have been another $9.56million of debt servicing over the next 30 years.
That would increase rates by an average of 9.6%, costing $305 per property, every year, for three decades.
By Philip Chandler
