Leaky building residents told to go to developer, not court

Residents of a large three-block Ellerslie apartment complex have been ordered to reach a settlement with the units' developers to avoid complicated court litigation.

A Chinese Government-owned organisation that developed the leaking apartments was this week taken to court by angry owners.

Residents of the five-level Ellerslie Court units want up to $7 million for extensive repairs but the parties have been told to settle before a trial date next year.

An evaluation conference in the High Court at Auckland this week resulted in a trial date being set for next August 8.

Justice John Priestley issued a timetable for the parties to follow to avoid "complex litigation" and made various orders to narrow the disputes between the main parties.

Auckland City Council, Cladright Developments, Plaster Systems, APT Tiling, Combined Building Services, Low Architects and J & G Consultants are also named in the action.

Parties have been ordered to file documents by September 9 showing a timetable for their mediation arrangements.

The 76-unit complex at 3 Harrison Rd was built in 1998 by Minland Developments, owned by China Minmetals NZ.

Minmetals came to New Zealand in 1989 intending to buy NZ Steel, but when that deal failed it turned to property investment.

Stephen Moyland, a lawyer acting for Minland Developments, said it denied the claims but because the case was before the court he could not comment further.

Minmetals' website is still advertising units in the blocks as "a dream lifestyle you can afford".

But owners have found themselves trapped in a two-year legal nightmare that started with them trying to negotiate a settlement with Minmetals.

Unit-owner Colleen Fitzgerald, a member of the owners' committee, said residents had already spent $140,000 on building reports after testing showed serious defects.

A further $40,000 legal costs had been incurred so far, she said.

Many migrants from Asia, retired people and first-home buyers with large mortgages lived in the blocks and were upset.

Problems at the 76-unit Ellerslie Courts allegedly include:

Leaking decks, unsealed windows and cracks in exterior cladding of the three blocks are letting in water.

* Leaky building analyst Prendos says significant amounts of the potentially toxic stachybotrys were found in the buildings.

* "Spores of this mould could be transferred where they will then possibly affect the occupants," Prendos found, recommending that the cladding be stripped and the blocks re-built with a drained and vented cavity system.

* Damaged steel work in the building's framing must also be stripped out and replaced.

* Registered building surveyor Mark Williams, of Prendos, urged speed, noting ongoing corrosion of steel framing and structural steel work.