Owners settle leaky homes dispute with Government

The homeowners will pursue their $19m claim against others. Picture / Dean Purcell

The Government has backed down on plans to claim $100,000 costs from 153 homeowner victims who lost a court action over New Zealand's largest leaky home complex, Sacramento in Manukau City.

Negotiations between the Crown Law Office, representing the Attorney-General, and Sacramento's lawyers Grimshaw & Co resulted in a deal being announced yesterday.

The owners were headed for the Supreme Court to challenge a Court of Appeal ruling in favour of the Attorney-General, representing the Building Industry Authority.

The Court of Appeal ruled for the Crown as the BIA was too far removed from the day-to-day decisions which caused the leaky building fiasco.

The victims vowed to go to the Supreme Court but were dealt a further blow when the Government filed a memo advising the Court of Appeal it would seek costs from the Sacramento homeowners.

That led to an outcry from the victims, daunted at the prospect of even more costs before they begin repairing their homes and mounted pressure on the Government to help the owners.

A spokesman for Finance Minister Michael Cullen said the Crown would not seek costs as the homeowners were not appealing. The agreement was a quid-pro-quo, he said.

Sacramento's lawyer Paul Grimshaw was satisfied with the development.

"It's pleasing that we've reached a settlement," Mr Grimshaw said. "We've decided not to appeal to the Supreme Court because we thought that on the merits of the case, we were better to devote our energies to pursuing others through the High Court. We have issued proceedings against 14 defendants. Only one - the Crown - has had the claim against it struck out and a few others have gone in to liquidation, but there remains about eight viable defendants who we are still pursuing."

The owners will now pursue their $19.3 million claim against Sacramento's building certifiers, builders, architect, suppliers of the cladding systems, project manager, BRANZ Ltd, the developers, suppliers of concrete tiles and lead flashings and defendants' insurance companies.

They hope for a hearing in the High Court at Auckland this year and Mr Grimshaw expects to be back in court within the next month.

Sacramento body corporate head Wayne Evans welcomed the latest decision from the Government but said owners were appalled that the Building Research Association was trying to avoid litigation.

Mr Evans called for the Government to foot the owners' legal bills. and said owners would prefer that no defendants were struck out from the hearings.

"I still believe the matter should go the full way through the courts," he said. 
 


Third of units might be saved


Victims of the Sacramento leaky home debacle have a glimmer of hope: a third of the units might now be saved.

More than two years ago, the victims were told some homes were so rotten demolition was the only option. Matters got worse when the victims spent the last year in protracted litigation against the Government.

But Sacramento body corporate head Wayne Evans said yesterday he hoped all units could be saved. "We don't know for sure until we open up the walls, but if we were to do the work in the next 18 to 24 months, we might be able to make modifications," he said.

Lawyer Paul Grimshaw, left, said in 2004 a third of Sacramento was so rotten demolition was the only option and residents would need millions to re-build, repair and re-clad the units built in 1999 and 2000.