A defining moment in the Bella Vista Homes disaster can be traced back to one crucial meeting.
It was 12.30pm on a sunny Wednesday in December 2016, just four days before Christmas.
Ten people gathered in the office of Garry Poole, the chief executive of the Tauranga City Council at the time,
Fateful decision: The meeting that was a defining moment in the Bella Vista disaster
The Bay of Plenty Times has reviewed three separate reports, looked over historical emails and interviews, and obtained details about a meeting held at Tauranga City Council offices. Image / Phil Welch
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On top of that, the council employee chosen for the role had a clear (and declared) conflict of interest – he was having a house built by Bella Vista Homes.
The council has since introduced two new policies directly aimed at stopping such a decision or conflict from happening again.
Eleven months on from that fateful meeting on December 21, 2016, Bella Vista Homes went into voluntary liquidation, leaving behind unfinished houses and millions of dollars in outstanding debts.
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Three months later, 21 of its houses were suddenly evacuated by the council, and families lost their homes.
The Bay of Plenty Times has reviewed three separate reports, looked over historical emails and interviews, and obtained specific details about the meeting and who was there.
The lead up
The Bella Vista Homes housing development was located on a sloping site above State Highway 36 in the southern Tauranga suburb of Pyes Pa.
In 2015, the relatively new building company acquired 40 pieces of land at The Lakes, a booming subdivision in one of the fastest growing cities in New Zealand.
Bella Vista found a niche in the local market and by mid-January 2016, had secured resource consents to subdivide 11 lots into 22 different sections on Lakes Boulevard (16) and Aneta Way (6).
The intention was to build houses on 21 of the sections (one would remain vacant).
On June 9, 2016 the first building consent was issued. Five more consents soon followed in July and August.
And then there was nothing for four months.
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By early December, significant earthworks and some building works had started on site, but the relationship between Bella Vista Homes and the Tauranga City Council had reached a tense stalemate.
Disputes had arisen about geotechnical considerations, stop-work notices had been placed on a number of sites and there was a backlog of requests for further information (RFIs) from the council in relation to amendments to issued consents.
Bella Vista was alleging unfair treatment and that its development was being impeded by inappropriate actions by council staff.
It claimed the stop-work notices, and the subsequent delays in removing them, was causing a significant commercial loss on the business and, ultimately, the buyers of the houses under development.
Then a bombshell landed.
A man named William (Bill) Brouwer, who had been working as a council building inspector since November 2015, wrote a scathing affidavit that Bella Vista immediately seized on as evidence of its claims.
The affidavit alleged a council building services staff member was specifically instructing inspectors to recheck Bella Vista inspections.
It also alleged building services staff members were deliberately delaying Bella Vista sites in order to place the company under commercial stress, and that Brouwer was harassed as a result of his refusal to be a party to council attitudes and actions.
The Times this week asked the council about the allegations made by Brouwer and Bella Vista.
"We are not in a position to comment while the matters are still being investigated," was the emailed response.
A review by accounting and consultancy firm BDO, published in June 2017, found no evidence of deliberate obstruction by council staff, but did not conduct an audit or forensic examination and did not look at every aspect of the allegations or evidence provided by Bella Vista.
An internal council investigation, headed by retired judge Graeme Colgan, is still ongoing. It began in October last year.
Former Bella Vista director and sole shareholder Danny Cancian stands by Brouwer's affidavit and regularly points to it as verifying the company's claims about it being singled out and unfairly treated.
Cancian, responding to emailed questions via a third party, questioned the geotechnical issues that were disputed in the lead up to the December 2016 meeting, as well as the issues that triggered the stop-work notices.
He said, in his view, most of the issues arose from a lack of suitably qualified and experienced staff at the council.
He referred to the "personal agendas of a few" and noted Bella Vista had to endure a lengthy building consent period.
Cancian also suggested another building company in Tauranga had a similar arrangement to the "single point of contact" agreement between the council and Bella Vista.
The council said this suggestion was incorrect and the single point of contact agreement with Bella Vista "was an isolated case".
As for issues around a lack of council staff training and technical skill, the timeliness of consent assessment and the requesting of further information – those concerns were also raised by other parties in the BDO review of the council's building services department in 2017.
An investigation report by the Ministry of Business, Innovation and Employment (MBIE) noted the average timeframe to issue a building consent for houses in the Bella Vista development was 135 calendar days.
The ministry report, released in March this year, also laid out four separate required actions to be taken by the council with regards to staff training.
Many of the technical allegations surrounding the Bella Vista development, meanwhile, are the subject of an ongoing court case between the council and several parties involved in the development, including Cancian.
The case is due back in court on July 24.
The meeting
The aim was to discuss Bella Vista's allegations, create a resolution to the issues raised, and expedite completion of the stalled build.
Garry Poole's executive assistant emailed Cancian on December 8, 2016 to confirm the time, date and attendees of the meeting.
"This appointment is to discuss the matters raised in the pending claim: malfeasance in public office."
Seven people were listed as attending but, when the meeting commenced almost two weeks later, there were 10 people in the room.
Cancian and Poole were there and so was Rebecca Perrett, the council's environmental services leader who oversaw the building services department.
Others included Bella Vista Homes general manager Craig Carter, the company's lawyer David Simpson, Bella Vista employee Cheryl Parker, and Tauranga barrister Bill Nabney.
Two lawyers attending for the council, Michelle Paddison and Prajna Moodley, and a man named Mike Small, rounded out the 10.
It is not completely clear what role Small had, but the council said in a statement that he was not a staff member and is understood to have been related to a security firm.
The Times requested the minutes of the December 21 meeting under the Local Government Official Information and Meetings Act, but the council refused to provide them.
As part of its response, the council said the meeting was held on a "without prejudice" basis and it was withholding the minutes in order to protect legal professional privilege.
The Times has challenged this argument with the Ombudsman.
While it is still not known exactly what was said in the meeting, an email sent at 5.28pm that day reveals what was discussed and decided behind closed doors.
The decision
The email was from Poole to Cancian. It listed a summary of the points of discussion.
It showed those in attendance discussed the Bella Vista properties in issue, it was acknowledged they were difficult sites and that the council was obliged to comply with its statutory responsibilities.
"Various points were raised in support of a potential claim against council (note these are not accepted by council)," Poole wrote.
The email also said both parties had agreed the priority was to complete construction so purchasers could get into their homes.
"As a way forward Bella Vista suggested that council appoint one person, a senior building inspector, to take charge and given a specific brief to work with Bella Vista to get houses completed, go through the RFIs to ensure they were relevant…"
A council building inspector named Mark Bell was one of two people suggested for the role, according to Poole's email, and the council chose to appoint him.
He was to carry out a review of the outstanding RFIs and advise Bella Vista of any outstanding issues and the steps required to address those issues.
Bell would also be the point of contact for any future requirements on the properties in issue.
"It is acknowledged that Mark Bell has a house being constructed by Bella Vista and that neither party will raise any conflict regarding this," Poole wrote.
The house was for Bell's daughter. It sat across the road from the Bella Vista development site on Lakes Boulevard.
The Times has approached Bell for comment. He still works at the council as a building inspector and said he could not comment without first getting permission from the council's media team.
The council media team's final emailed response was: "Mark Bell does not wish to comment while investigations are underway."
What happened next
According to the BDO report, Bell's single point of contact role started at the beginning of 2017 and within five weeks the issues were resolved to a point where work could commence on all sites where previously, stop work notices had been issued.
After four months of no new building consents, after the December 21 meeting, the final 15 consents were gradually issued.
The first on December 23 and the last on August 2, 2017.
Cancian said, via email via the third party, that it was at this point work resumed and continued "as per professional advice and recommendations".
He said there were still issues around clarification and with inspection matters.
Cancian also said the single point of contact decision did remedy most problems, but the time taken was still slow for what were really "non-existent" issues.
The council commissioned several investigations of the Bella Vista development in late 2017 and early 2018 from technical experts.
The investigations identified a number of geotechnical and structural issues with the houses and sites.
A report by former High Court judge Paul Heath QC, released in June last year, summarised the content of the various investigations and explained the nature and extent of the identified issues.
Speaking to his report at its release, Heath commented that even a non-professional could go onto the site "and realise that a lack of a retaining wall between the Aneta Way properties and those on Lakes Boulevard is potentially dangerous".
He also said, "you would need to be blind not to realise there was a retention problem".
As for the identified structural problems, Heath said, "it is difficult to see how anyone could have missed them".
The ministry said it noted a number of defects at the development site during its review, in line with what was identified in the council investigations.
However, while those findings were referred to within the ministry report (see image below), the ministry said it did not conduct any technical assessments of this sort and noted some of those findings are being challenged by other parties through the courts.
Two months after the final Bella Vista building consent was issued in 2017, WorkSafe New Zealand visited the development site and issued a prohibition notice in relation to work adjacent to "steep unsupported cut slopes".
The ministry investigation later found those large unretained cuts were, primarily, the biggest issue with the site.
Paul Hobbs, who led the ministry's review, told city councillors last month it was "pretty much unprecedented" to see large cuts like that not dealt with before buildings went on site.
Cancian said, via the third party, the retaining wall was "never" contracted to be built by Bella Vista Homes.
…you would need to be blind not to realise there was a retention problem.
Hobbs said there were retaining walls included on the consents but it wasn't immediately clear who was responsible for building them.
He said from what the ministry could gather, the retaining walls were not part of the building contracts, which means it was up to the building owners to have them built, not Bella Vista.
However, Hobbs said once the walls weren't there and the building platforms were in place and you could see issues with site erosion and run-off and other consequential damage, the obligation was on the council to use its statutory enforcement powers appropriately to manage the risks on site. That didn't happen.
By the start of November, a piece of paper had been stuck to the door of the Bella Vista Homes office, saying all staff had been sent home because of the WorkSafe closures.
"As without sites to build on we are unable to sustain the day to day costs of operations," the note said.
By the end of the month, Bella Vista Homes was in liquidation, and the 21 houses were left at varying stages of completion.
Why one decision was so significant
The ministry report said the consistent view from council staff sitting below senior management was that the "single point of contact" decision was "the most significant reason for the failure in council functions with respect to the Bella Vista development".
"This is because it was the point in time when the checks, balances and safeguards provided by normal processes were set to one side, with practices emerging from the decision which were considered high risk."
The ministry found the decision was interpreted differently by various staff, which created ambiguity and took away the ability to escalate concerns in the usual manner, because all decision-making was, as far as they were aware, being made by the main inspector, Mark Bell.
Council senior management disagreed and disputed those claims, and did not think Bell's appointment should have had the effect of setting aside safeguards.
They also considered the appointment to be at least capable of being managed in such a way as to avoid risk.
The ministry report also highlighted a similar but separate "single point of contact" issue when it looked at how building consent applications were processed at the council.
After Bella Vista's complaints, a single processing officer was appointed to deal with all the remaining consents. That resulted in similar confusion around direction and decision making.
It is also worth noting the BDO report in June 2017 endorsed a single point of contact approach for "builders and developers of a particular size or activity".
Why the decision was made
The ministry said the council's intention was to be more customer-centric.
It agreed in its report that a single point of contact could provide benefits, and that it was thought to be common practice across councils.
However, the ministry said safeguards should be put in place to ensure council staff are supported in making normal and appropriate decisions about compliance of building work, and are not subject to pressure or influence (whether perceived or actual) from management or external parties.
Interviews undertaken as part of the review highlighted some council staff felt unsafe at times while on the Bella Vista site and that pressure was applied to them in their jobs.
For example, staff said they were sometimes filmed while undertaking their duties on site.
Hobbs said this also appeared to play a role in the council appointing the single point of contact.
One of the main findings in the ministry report was that council management intervened in and subverted normal council processes and that was, in part, "due to undue or inappropriate pressure from the developer".
Hobbs, while addressing councillors last month, did clarify the term "developer" did not mean one individual, but a collective – it could be referring to whoever's there managing the site, or others.
Cancian, via the third party, said he accepted most of the ministry report as being a fair summary of events, "except the unproven and unknown issue of alleged intimidation or whatever it was".
He said he was seldom on site and was not aware of any filming specifically of council staff, but was aware of a photo record "of all aspects of the builds as they progressed".
He denied and said he had no knowledge of undue or inappropriate pressure from the developer "as to who that may be, if anyone".
"To date, no evidence has been presented of what basis the allegations relate to nor who, when etc."
The conflict of interest
Mark Bell's Bella Vista conflict was declared well before his appointment as the single point of contact, the ministry investigation found.
The report said it was common for council employees, particularly building inspectors, to declare a conflict of interest where construction work is undertaken that employees have a financial interest in.
"In normal circumstances, to mitigate the risk of conflict of interest, the employee would be removed from any decision-making relating to that financial interest."
The ministry concluded that the Office of the Auditor-General had useful guidance in this area for councils and other public entities, "which should have been observed".
'Significant changes'
None of the council staff members who attended the December 21 meeting are still employed by the council.
The council has also introduced two new policies in response to the decision that was made that day – one to ensure multiple inspectors are assigned to projects from now on, and another to ensure staff identify, manage and report conflicts of interest.
The council's building delivery manager, Ray Day, said in a statement that the council had a comprehensive plan in place to address the ministry's findings and had made "significant changes" to its operations.
That included improvements to policies, procedures, training, enforcement and processes around consenting earthworks.
None of the council staff members who attended the December 21 meeting are still employed by the council.
The council had planned a nine-month schedule for training and auditing to help ensure improvements were ongoing.
Internal workshops had been organised, supported by online training, and regular audits were underway to ensure certain building consent policies and procedures were being adhered to.
The ministry will revisit the council again later this year, and the council has to provide an update on progress by March next year.
The three reports
•The Ministry of Business, Innovation and Employment report
•The Heath report
•The BDO report
