Graeme Kruger gave us a little insight into a fight and ultimately a win against the odds when everyday investors, ma and pa, took on the big boys, Council and property developers in New Zealand.
Background
• Purchased off the plans from Developer in 2005.
• Complex completed in November 2007 (Code Compliance Certificate - CCC).
• Body Corporate formed soon after titles issued – 1st Meeting Dec 2007 – requirement under NZ unit Titles Act.
• Elected as Chairman of the Body Corporate owners at meeting.
• Building is managed by Oaks Hotel Group a subsidiary of the Minor Group of Hotels.
• 2013 the Body Corp became aware of water ingress issues and appointed an engineering expert to conduct a preliminary survey.
• Report identified major concerns and recommended further detailed investigation.
• 2014/15 sought legal advice and appointed leading engineering and design company to conduct investigation.
• Preliminary findings from the initial investigations resulted in lawyers advising to file proceedings against the Queenstown Lakes District Council as the building authority who were responsible for inspections and approvals.
• 10 year statute of limitations – making 2016/17 critical in terms of filing proceedings.
• Parallel to this the BC also filed for Government Financial Assistance Package (FAP) under ‘leaky building legislation’ introduced in 2006 – to provide compensation for buildings built from 1988.
Weathertight Defects Identified
Primary defects identified:
• Inadequate construction at tiled balcony/wall abutments including incomplete jointing of structural elements and the waterproofing of the junctions;
• Inadequate waterproofing of balcony perimeters;
• Inadequate waterproofing penetrations through balcony liquid applied membrane;
• Inadequate waterproofing and installation of storm water dispersal to balconies, to internal gutters, scupper outlets and rain heads;
• Inadequate waterproofing protection to concrete basement driveway and site paving installed above retaining wall tanking line, affecting levels 4, 5 and 6.
Secondary defects identified:
• Membrane penetrations to, garden planter boxes over level 6 common courtyard drive and courtyard into units below;
• Inadequate junctions and omission of transition flashings at wall/roof and barge interface;
• EIFS cladding not installed in accordance with manufacturers technical literature or established industry literature;
• Inadequate junctions at gas fire exhaust penetrations through walls;
• Inadequate falls to balconies causing base-fixed balustrade connections to sit in pooling water causing corrosion to cover flashings;
• Exposed framing at balcony dividing wing walls and suspended wall above basement carpark entrance.
Non Weathertightness Defects
• Inadequate passive fire suppression around various fire cell penetrations.
• Inadequate installation/omission of fire suppression around service penetrations.
• Inadequate structural wall/foundation connections at isolated areas.
• Condensation due to the combination of the construction elements and internal moisture generation.
Options for Owners
1. Raise dollars for a complete rebuild to determine exact costs and take that as final evidence to court
• Estimates between $8 and $40 million with to many unknowns
• Provide accurate numbers and detailed evidence of rebuild process
• Not all owners would have the ability to finance this plus the legal process – 4 to 5 year estimate
2. Undertake a pilot sample repair of the building and conduct invasive penetrations to establish universal nature of issues
• Risk of not exposing all the issues
• Risk of not getting sufficient evidence to take to court
The Outcome
1. Started the process in 2014
2. Filed 1st claim in high court against QLDC in 2016
3. Filed a number of amended statement of claims throughout the process as new evidence and costing came to hand.
4. Final claim against the Council was for $67 Million NZD – made up as following:
1. Repair coats estimated at $44 million
2. Loss of rent during repair process
3. Stress and anxiety
4. Legal and experts
5. Court date was set for 18 October 2021
6. Participated in a number of preliminary hearings leading up to the court date
7. Tcoheurt defendants called for mediation prior to court date – with the aim of trying to settle prior to
8. Mediation was set for 13 October 2021 – lasted 14 hours – no settlement reached
9. Defendants filed a Calderbank Offer which expired at 5pm Friday 15th Oct
10. We rejected their offer against legal advice and instructed our team to get more from them
11. The defendants increased the offer late on Friday night and we accepted and settled
12. Money was paid into the Lawyers trust account on 12 November 2021
13. Owners around the world were relieved and very happy with the outcome
To read Graeme’s interview article in Mountain Scene, click on the link below:
********************************
Carmel’s of the Week A boy and an engineer were fishing.
The boy is the son of the engineer but the engineer is not the father of the boy.
Then who is the engineer?
********************************
Director’s Roundup 
- Dinner Meeting – Fee increase as of 10 March 2022
- March Farmers Market –5th March 2022
- RYDA – 2-5 May 2022
- District Conference – 18-20 March 2022, Temora. For more information click on the link. https://portal.clubrunner.ca/page/2022-district-conference-temora
- Answer – The engineer is the boy’s mother.
- Expressions of Interest - Rotary Trip to Corowa and Rutherglen - 29 April – 1 May 2022 speak to Carmel
- The Rotary Club of Woden DAYBREAK NRL and AFL footy tipping competitions, to participate in.
NRL competition:
Competition Name: NRL Rotary Experts - Password: Goldenpoint2022
AFL competition:
Competition Name: AFL Rotary Experts-Password: Cazaly2022
- International Women's Day Dinner organised by the Rotary Club of Narrandera, Soroptimists Narrandera and the Narrandera Shire Council – Tuesday 8 March 2022. For tickets click on the link: https://www.eventbrite.com.au/e/international-womens-day-tickets-274726473277
********************************
Member Update- Bob – was unable to be with us again this week. Our thoughts and prayers are with you Bob, we wish you a speedy recovery.
********************************
Stupid Silly Joke 
********************************
Laurie’s Quote of the Week“There is one thing stronger than all the armies in the world,
and that is an idea whose time has come.”
– Victor Hugo (1802 – 1885) French Poet
********************************
