Court action next in row over repairs

Owners of about 35 units in the Quay Park complex are said to owe $1.16 million. Photo / Greg Bowker

The $6.1 million repair of Auckland's 230-unit Grand Central Station apartment block has pitched one group of owners against another.

Greta Norman, chairwoman of the owners' committee, said 20 owners of about 35 units in the Quay Park complex owed $1.16 million for repairs.

These people were unable to pay, had refused to contribute money or had not responded to demands, she said.

The body corporate of Grand Central Station - formerly called the Railway Campus - initially found itself helpless to force them to pay.

So the matter is now in the hands of a court-appointed administrator.

Court action to get the money or negotiation to settle the amounts outstanding are possible outcomes. But nothing is decided yet.

On October 19, Anthony McCullagh, of PKF Corporate Recovery and Insolvency, was appointed an administrator by the High Court at Auckland. The next step will be litigation to force sales and get the money.

Norman said his role was to take over management of the body corporate for the time needed to resolve issues over the repair bills and the body corporate rules to run the complex. The titles to the properties also have to be changed, she said.

She told owners that for most of them, his appointment would have very little effect and the Railway Campus complex would continue to operate as usual.

A court application under the Unit Titles Act is now being prepared for the next stage of proceedings. McCullagh said that would enable one contract to be let retrospectively for the repair of common-area property in the building.

Norman said most owners had paid their levies and in many cases "with a great deal of personal sacrifice" but Norman said some owners had not paid. "The outstanding levies [are] mainly related to the remedial works which have been benefiting everyone, including the defaulting owners."

Demand letters threatening legal proceedings against non-paying owners had been sent out by the body corporate's lawyers, Morgan Coakle. But several owners had written back via their own lawyers, disputing the body corporate's legal right to raise levies for the remedial works.

Three owners alone owed about $300,000 in unpaid levies, Norman said.

"By late last month, unpaid levies amounted to $1.16 million with the recovery of about $880,000 being considered remote within the next six months because owners had either disputed the body corporate's entitlement to the remedial levies or had not responded at all to the demands," Norman told owners in her latest report.

So the body corporate took legal advice on forcing those owners to pay. It found itself on the back foot.

"The committee learnt that the body corporate was unable to enforce directly the collection of the remedial levies because of serious incongruities between the unit plan for Grant Central, its body corporate rules and the Unit Titles Act," she told owners.

Meanwhile, Shane Hartner's Legacy Construction is well advanced in repair work.

Norman said repairs were 80 per cent completed. Scaffolding had been removed from the building and the work would be finished early next year. She praised Legacy for its skill and expertise and said their work was "brilliant", working in specific areas so other areas could remain inhabited.

The firm had initially completed repairs to one side of the building, then moved to the other, she said.

This enabled investors to continue to receive rent from their apartments.

ON TRACK
* Railway Campus developed by Jim Speedy
* 230-unit block at Quay Park, off Beach Rd
* Auckland University terminated lease
* Last year, a unit went for just $12,800
* Administrator now appointed by court
* $6.1m repair job to finish early 2010