Seascape (centre with tower crane) dominates Auckland's skyline.
Seascape (centre with tower crane) dominates Auckland's skyline.
The Chinese developer of New Zealand’s tallest apartment tower is taking legal action against one of the world’s largest builders after a punishing Building Disputes Tribunal adjudication against it.
Justice Pheroze Jagose in the High Court at Auckland heard the first step of proceedings on Tuesday, according aminute he subsequently issued.
There is a dispute between the two parties involved in building the 56-level $300 million Seascape.
Developer Shundi Customs, represented by lawyers at Bell Gully, is taking legal action against China Construction, seeking a judicial review of the adjudication against it and that China Construction returns to the site. Building Disputes Tribunal adjudicator John Green is named too.
The court action follows China Construction winning Green’s August 2 tribunal adjudication against Shundi.
Last month the builder suspended all work and told contractors to leave the site even though many were owed substantial sums of money.
The tribunal decision means the builder is allowed to get a charging order over the Seascape property to stop Shundi from settling apartment sales as well as the builder winning $33 million.
Last month’s adjudication was from John Green under the Construction Contracts Act.
Such adjudication decisions can be appealed in the High Court if one party disputes the outcome.
Green wrote in his 119-page adjudication: “I have determined that the respondent Shundi Customs is liable to pay the claimant, China Construction New Zealand, the amount of $33,019,696.01 including GST and accordingly, I approve the issue of a charging order in respect of the construction site owned by Shundi.”
China Construction was the claimant at the tribunal, with Shundi Customs the respondent.
But in the High Court, Shundi Customs is the applicant with China Construction as the respondent, indicating the possibility of an appeal against that tribunal ruling.
“The dispute related to CCNZ’s construction of the Seascape building in Auckland’s central business district, its determination requiring Shundi to pay CCNZ some $33m plus interest,” the judge wrote.
The case is due to return to court on October 24 but in the meantime, no work is occurring on the tower.
To enforce that charging order granted by the tribunal, China Construction’s lawyers would have had to go to the District Court.
But the High Court action is an attempt to stop that as well as disputing the $33m award Shundi Customs was found to be liable to pay China Construction.
In the tribunal, Shundi was represented by lawyers from Anthony Harper led by Karen Kemp. In the High Court, Shundi is being represented by Bell Gully’s Jesse Wilson and Brad Ward.
In both matters, China Construction’s lawyers are Dentons and include Brendan Cash.
The builder’s legal team also includes Bankside Chambers barrister Graeme Christie who has 30 years of experience in construction law and worked at Simpson Grierson for many years.
The tribunal decision said: “This dispute concerns whether there is currently a due date for completion of the Seascape project and if so, what that due date is. In particular, it concerns whether the circumstances are such that time for completion of the Seascape project is at large or in the alternative whether and to what extent extensions of time ought to be awarded to China Construction.”
Under the Construction Contracts Act, an amount awarded as owing must be paid within two working days after a copy of the adjudicator’s determination is given.
China Construction has twice asked for payment: after the decision and again later last month.
Green noted Seascape’s features:
A mixed-use development to be New Zealand’s tallest residential tower at 187m.
A glass tower with 221 apartments on 52 floors, all north-facing with harbour views.
Five levels of basement parking, the deepest basement in central Auckland retained by a diaphragm wall.
A seven-storey podium with retail, offices, a full-size swimming pool and a gymnasium.
Refurbishment and seismic strengthening of Ballantyne House, transformed into a boutique hotel.
Seismic strengthening of the White Rabbit in Gore St.
He also gave timelines:
August 17, 2015: Shundi engages China Construction in an early contractor involvement;
September 5, 2017: contract entered into between the parties but the building design is incomplete, only at concept level;
2020: pandemic breaks out, extensions of time awarded to China Construction;
May 2021: fit-out works were due to be completed;
July 6, 2021: completion was due.
Construction stopped last month on Auckland's Seascape building, NZ's tallest, but sales of the luxury apartments are still going ahead, says real estate agent for Sotheby's, Scarlett Wood.
The Herald’s Ricardo Simich reported last week that Scarlett Wood of New Zealand Sotheby’s International Realty would head to London along with Seascape’s developer Shundi Customs Ltd’s Tashunka Bolton, to market the luxury apartments to expat New Zealanders and high-worth international buyers.
Wood is marketing Seascape apartments with a completion date of early 2026.
Despite the construction delays, Wood says the fact that Seascape enjoys a foreign buyer exemption has appeal overseas.
Shundi has an exemption to sell apartments to foreign buyers for Seascape and won the same exemption for its Shundi Tamaki Village development in St John’s where it plans 10 multi-storey buildings.
Wood’s overseas buyers’ list consists of people who are used to apartment and condominium living, she said.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.
