Leaky Hilton may cost QLDC ratepayers over $5 million

by Kim Bowden - Apr 03, 2023

Whether or not the Queenstown Lakes District Council carried out adequate inspections during the construction of Queenstown’s Hilton complex is being legally challenged.

And, if it’s found it didn’t, the ratepayer may be stumping up for another claim related to a local leaky building.

This time, however, the rot is coming from defective bathrooms, rather than being the result of inadequate cladding and weathertightness issues.

Some 24 leaks across 19 bathrooms have been discovered at the Hilton Queenstown Resort and Spa, and they’re sending water into parts of the parts of the building it shouldn’t go.

Documents from the High Court show the owners of Kawarau Village Holdings Limited and the body corporate are claiming more than $5.5 million in damages.

The claim has been lodged against the council and De-Geest Bathrooms, an Oamaru-based construction business making prefabricated bathroom pods.

The plaintiffs allege the defects were identified in November 2020, and they began the court proceeding in 2021. 

They say the cost to repair the defects and damage is estimated to be more than $4.8 million plus GST.

In the claim, the plaintiffs state there’s a 50 to 60 millimetre gap between the floor levels of the bathroom pods and the rest of the hotel rooms, with the former being lower. 

In addition, the waterproof membrane within the bathroom pod is defective, allowing water to make its way into the structure of the building, causing decay; and the building doesn’t meet the passive fire protection requirements of the Building Code due to holes for services through fire-rated walls and floors.

“It is asserted QLDC breached its duty of care owed to the plaintiffs when undertaking inspections pursuant to the building consent and in issuing the Code Compliance Certificate,” the High Court documents say.

However the council denies liability and says it does not owe a duty of care to the plaintiff, nor was it negligent.

It goes further to say the plaintiff “caused or contributed to its own loss by failing to undertake due diligence when acquiring the Hilton” and is questioning whether enough was done in the way of maintenance and repairs to mitigate water damage.

Kawarau Village Holdings Limited came about in 2010, set up by receivers after the Melview Group Limited, which was part way through building the Hilton, went under.

There has already been some legal back and forth regarding documents provided by the plaintiffs, as the council has requested more be made available. For some of them, the judge has agreed with the council's argument; for others, they've ruled the documents are not required.

A High Court trial date has been set for July 2024.

In December, the council settled a years-long legal battle with owners of the leaky Oaks Shore apartments, who claimed $163 million for building repairs.

In many leaky building cases, it is ratepayers who ultimately foot the bill for repairs, as councils are "the last man standing" - the only party around with resources as, unlike builders or developers, they aren't going anyway.

The QLDC say the claims are part of the reason for a higher-than-expected rates rise next year, from a forecast 5.5 percent to 13.6 percent.

At the March meeting of the council, finance boss Stewart Burns told councillors there were "three or four" potential leaky building claims in the pipeline for the council.


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