Owners of apartments in the 150-unit Nautilus apartment tower at Orewa have won a judgment totalling just over $25 million against Auckland Council.
The super-city council became the primary defendant as successor to the Rodney District Council.
The developer, Tamariki Ltd, owned by Rick Martin of Cornerstone Group Ltd, went into liquidation in 2008. The head contractor, Brookfield Multiplex Constructions (NZ) Ltd, went into liquidation in December 2012, and the architects, Walker Architects Ltd (ex-Walker Co-partnership Ltd), went into liquidation a week before the trial began in August last year.
The judge found the council liable for most of the defects, Brookfield Multiplex for all of them, and the one defendant not in liquidation, Charles Norager & Sons Ltd, 80% liable for deck & some membrane defects. Charles Norager applied the waterproof membrane and installed the tiles on the decks. It was found 80% liable, the council 20%, for defects there.
The 12-storey tower cost $35 million to build and was completed in 2004, but was plagued by numerous construction defects which compromised the watertightness of the roof, cladding & balconies.
The claim, on behalf of 93.5% of ownership units, was run by Rainey Law and led in court by Christine Meechan QC.
Justice Gilbert said that if Brookfield Multiplex was entitled to indemnity for its liability under its professional indemnity policy, and if the insurance proceeds in the hands of the liquidators were fixed with a charge, it should also be treated as a solvent defendant for the purposes of assessing the respective contributions as between it & the council.
However, he said: “I have concluded that Brookfield Multiplex is not entitled to indemnity for any part of its liability under its professional indemnity policy.”
Justice Gilbert said an architect retained by the underwriters, Kevin Clarke, considered that the workmanship was defective to the point of being grossly negligent: “He says that this was ‘’manifestly evident” throughout the installation of the aluminium composite panels. In his view, the jointing quality was so bad that the cladding had no chance of being waterproof. For example, he observed panels on the roof edge where the reveals had been cut off making it impossible to seal.”
Another architect, Mark Powell, initially took the view that the defects at the roof edge could be addressed by resealing the joints and initiating an appropriate maintenance programme with regular inspections. However, at the trial, he amended his view and agreed with the other experts that the panels would have to be replaced.
Justice Gilbert added: “There was no disagreement among the experts that the cladding on the rest of the building can only be remediated by replacing it with a pressure-equalised cladding system that operates as a rain screen, with separate cap flashings & modified aluminium joinery. The design of this system has been developed for the plaintiffs and council has approved it.”
With the exception of the couple who bought one unit 5 years after completion, Justice Gilbert found no contributory negligence by owners.
Attribution: Judgment & Rainey release.