Fletcher bides its time on developer's debt

Workers at Kawarau Falls Station scrambled to grab their tools after word spread that the project had gone into receivership. Photo / Supplied

Construction and distribution giant Fletcher Building will temporarily hold off collecting $1.7 million from Kawarau Falls developer Nigel McKenna.

The receivership of two companies developing the $1 billion Queenstown project this week has left Fletcher reconsidering its options over the disputed bill for Wellington's Holiday Inn Hotel.

Mark Binns, chief executive of both Fletcher's infrastructure and construction division, said yesterday that KordaMentha's appointment meant he would stall action to get money back.

"We're going to wait a week to 10 days until the dust settles. We are owed money on the Wellington project but at this point we're just waiting to see what happens over Queenstown," said Binns of the dispute Fletcher has been locked in for many months over the final payments for building the $100 million Wellington hotel.

Last month, Fletcher's lawyer Graeme Christie of Simpson Grierson went to the Auckland District Court and got judgment against McKenna who is one of the country's most influential developers.

The Fletcher Construction Company sued his Melview Featherston Street for not paying the final amount for building the 280-room 17-level hotel.

Fletcher sought judgment from Judge Philippa Cunningham to enforce a Building Disputes Tribunal determination made on February 16 by adjudicator and Auckland barrister John Walton. Yesterday, Graeme Christie and Brad Spiers of Simpson Grierson appeared for Fletcher, saying that Melview owed $1,770,284.88.

The money was still outstanding so yesterday they not only sought an order to enforce the tribunal's decision but also security over titles to 18 hotel rooms at the Holiday Inn which McKenna is yet to sell. Most of the Holiday Inn rooms have been sold to investors, many in Asia.

Meanwhile, workers at Kawarau Falls Station have scrambled to grab their tools after word that the project had gone into receivership.

Gib-stoppers, scaffolders, insulation installers and interior decorators have extensive equipment on the site and many feared they would be ordered off and told to leave their gear behind.

Fletcher's Binns said the receivership would have more of a local than national effect on the building business but he was worried about its effect on the construction sector.

Companies putting up the Westin hotel in Queenstown included Auckland's Hawkins Construction, Dunedin's Naylor Love and Queenstown's Rilean Construction.