Napier City Council paid $590,000 to fight leaky-building claim before reaching settlement

Monday, 18 March 2019

The council said not all the issues with the apartments on Humber Street are related to weathertightness.

The cost to Napier ratepayers of fighting a multi-million dollar leaky building claim was nearly $600,000.

Between October 2014 and last month the Napier City Council spent $590,653.25 plus GST and disbursements in fighting a claim concerning the Waterfront apartments, in Napier, which were completed in 2007 and later found to be leaky buildings.

The figure was released under a Local Government Official Information and Meetings Act request by Stuff.

Council chief executive Wayne Jack said the cost had been paid through internal budgets.

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The Humber Street apartments, finished in 2007, were later found to have a raft of issues, including structural steel corrosion and a leaky roof.

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The council last month reached a confidential settlement through mediation with the apartment owners, who in 2013 launched legal action against the council and ten other parties involved in the construction of the apartments.

The cost of the settlement was unknown, though the cost of remedial work was known to be more than $9.3million.

Last week the council resolved to fund the cost of the settlement through internal borrowing from its Parklands Development Fund Reserve, which had been set up to fund future revenue generating opportunities.

The council is still arguing a case against the Local Government Mutual Funds Trustee Ltd, or 'RiskPool', as it believed it could be indemnified for the non-weathertightness defects associated with the building.

The dispute is still before the High Court. The council resolved that if the claim was successful against Riskpool the funds it receives would be used to replenish the Parklands fund.

The apartment owners took the claim because they believed the council was negligent because as building regulator it owed a duty of care in performing regulatory functions as an inspector, and it breached that duty in each of the three components of that role (issuing building consents, inspections during construction, and issuing code compliance certificates).