More than a decade after Antony Arnerich’s Vaco Investments sold a newly constructed West Auckland commercial building customised for incoming tenant ASB Bank, he is arguing the toss over damages claimed by DHC Assets for construction cost overruns. Lack of coherence between an earlier arbitration and later litigation in which Mr Arnerich was ordered to pay $1.18 million to DHC has led to two separate High Court hearings and now an almost-conclusive Court of Appeal ruling.
DHC Assets Ltd signed up with Mr Arnerich’s Vaco Investments (Lincoln Road) Ltd in 2011 to build the two-storey commercial building. DHC has seen multiple changes in shareholders and directors over the last decade, but one continuing presence as director has been Clearwater Construction’s Mike Sullivan.
DHC’s main complaint is that Mr Arnerich transferred cash out of Vaco Investments to family interests at a time when payments due under its construction contract were not finalised. Mr Arnerich subsequently put Vaco Investments into liquidation.
Vaco sold its completed building in April 2013 for $8.4 million, with $2.3 million then transferred to Mr Arnerich, family members and his family trust.
Mr Arnerich fiercely contests much of what DHC claims is still due.
In 2019, the High Court ruled Mr Arnerich liable for breach of director’s duties for extracting cash from his company when the full extent of company liabilities was not yet sorted.
He was ordered to pay DHC some $367,000; the amount Vaco was ordered to pay DHC after an earlier Construction Contracts Act arbitration. At the arbitration, DHC claimed it was owed $1.08 million in total.
What followed was multiple High Court hearings and subsequent appeals seeking to identify what DHC was owed.
The Court of Appeal ruled their arbitration provisional only; contractual claims not covered by the arbitration could be litigated.
With default interest in their construction contract for late payment running at 12.4 per cent compounding monthly, damages claimed began to escalate substantially.
With Vaco Investments now in liquidation, DHC argued Mr Arnerich personally was liable for these extra payments; if his company couldn’t pay, then the amount should be added to his personal liability for breaching his duties as a director, it said.
Prolonged litigation has seen argument over what costs are, or are not, covered by their contract and how interest is to be calculated.
Mr Arnerich personally is liable to pay DHC $1.18 million, the Court of Appeal ruled.
A subsidiary issue was payments by ASB to Vaco Investments for contract variations carried out during the build, at ASB’s request as incoming tenant.
It was agreed Vaco would pass these payments on to DHC; part of a side deal standing outside the main contract.
ASB paid in full for its contract variations. Not all payments were passed on. This is a debt still due to DHC.
If both sides cannot agree on the extent of ASB payments yet to be passed on, it is back to the High Court said the Court of Appeal.
Arnerich v. DHC Assets Ltd – Court of Appeal (9.04.25)
25.107