SkyCity fire 'absolutely devastating': fire tore through almost finished convention centre

Wednesday, 23 October 2019

Businesses that have been forced to close by the SkyCity fire could take legal action against construction company Fletcher, one legal expert says.

Businesses throughout Auckland's central business district have had to shut their doors and send staff home as the city fills with thick, black smoke from the huge blaze.

Jeff Walters, a director at K3 Legal, said there would be insurance in place to help cover the cost of the fire's damage.

But he said there could be questions about liability more broadly.

'It will all depend on the wording of the insurance policy. I am aware that there are some insurance policies that limit the extent to which public liability will respond to physical damage. It is possible that Fletchers has a broader policy,' he said.

'Most construction will require a public liability cover and will specify an insured sum. They may want to review the cover. It may say cover for all usual events, but whether or not people dig that extra layer deeper is questionable.'

He said, with a lot of businesses affected and productivity lost, 'you would expect there will be claims and there will probably be legal action taken.'

Crossley Gates, a partner at Keegan Alexander, said if the fire was due to a 'hapless contractor with a blow torch,' then the liability would be on the contractor, rather than on Fletcher.

The centre was almost finished when an 'absolutely devastating' fire broke out on Tuesday, SkyCity chief executive Graeme Stephens said.

The blaze broke out at on the roof of Auckland's SkyCity Convention Centre at 1.10pm on Tuesday, and continued to burn overnight. More than 100 firefighters were at the scene, and road closures have caused chaos for commuters.

A worker told Stuff on Tuesday that a torch used to heat and seal waterproofing material started the fire on the roof.

Ross Taylor, chief executive of Fletcher Building, said there were no active sprinkler systems, but there were fire containment and control systems in place.

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Taylor said one of the foremen spotted the blaze while working down a staircase. 'There is no active alarm system at a construction site.'

The protocol after spotting a fire was to evacuate, not for staff to try to fight the fire, Taylor said. He did not know how large the fire was when it was spotted.

He did not believe deadline pressures on sub-contractors could have been a factor that led to the fire.

'My emphatic answer is that is not the case,' Taylor said.

Fletcher Building hoped the fire would be contained 'later today'.

Stephens said the convention centre had been close to completion when the fire broke out. He was in the centre inspecting the progress just three hours before the fire started.

SkyCity's hotel, restaurant and conference centres were full at the time of the blaze.

Executives and SkyCity staff worked late into the night. Their first priority was checking everyone got out safely, then the focus went on finding alternative accommodation for guests, Stephens said.

The casino was evacuated even before the emergency services said the evacuation had to happen, with the gaming floor emptied by around 3pm, Stephens said.

Customers from the hotels were continuing to return to get luggage until around 6pm, he said.

The air quality was being monitored while this was happening.

'The last customers leaving the hotel, convention centre would have been round about seven last night,' he said.

Prime Minister Jacinda Arden had been in touch, and would be visiting Auckland later on Wednesday.

He thanked the police and fire services. 'They have been out there for more than 24 hours now.'

'We are working very closely with Fletchers to manage this situation,' Stephens said.

He did not know how long the opening of the convention centre would be delayed - the first conferences were booked for March.

The casino would open on Thursday, Stephens said. 'We will just be updating people as and when information comes to hand.'

It was 'virtually impossible' to understand the economic impact of the damage and the delay to the opening of the centre, he said.

'This would be the first time in the company's history that everything was shut. We have insurance policies and they would expend to the project itself,' he said.

There was a 'loss of profits' clause.

Fletcher Building said contract works and third party liability insurances were in place on the project.

Taylor said a lot of structural components will be damaged, including heat-damaged steel.

He did not believe the company was facing a complete demolition. There would be structural damage above level five, but below that there would be water damage.

He understood the importance of the Apec meeting to be held in 2021, but he could not yet say whether the convention centre would be open by then.

Neither SkyCity or Fletcher Building expected any financial help from the Government.

Taylor would not say whether the company would face financial penalties for the late delivery of the project.

Fletcher Building was financially strong, he said. However, there would be disruption for sub-contractors who had been working on the convention centre.

SkyCity shares were down 6 cents, or 1.55 per cent, at $3.81 by late Wednesday morning, while Fletcher Building shares were down 10c, or 2.15 per cent, $4.44.