Scene One apartment owners on leasehold land in central Auckland failed in their bid to force $35 million remediation costs on to management company Kupe Trustees.
Scene One consists of over one hundred residential apartments together with eight commercial premises. Built on Ngati Whatua Trust Board land, Scene One has weather tightness issues. A two-tiered leasing structure exists: Kupe Trustee Company Ltd holds the land on a 150 year lease from Ngati Whatua; Kupe in turn leases to individual apartment owners with each owner leasing from Kupe on similar terms. Apartment owners have no legal control over Kupe; they are subject to their Kupe lease. Owners pored over these leases when costs of remediation surfaced. A November 2019 arbitration determined owners had to foot the bill. A High Court challenge followed.
Remediation costs were operating expenses, Justice Jagose ruled. Any operating expenses ‘properly incurred’ could be recovered from apartment holders, as ‘all and any costs’ incurred by Kupe.
Gibson v. Kupe Trustee Company Ltd – High Court (25.05.20)
20.089