A unit owner opposes the High Court bid, warning it could limit future claims
Deloitte administrators overseeing a $240 million remediation project at Auckland’s St. Lukes Garden Apartments have asked the High Court for protection from personal liability, prompting opposition from a unit owner concerned the move could restrict future negligence claims.
The High Court appointed Robert Campbell and David Webb in July last year to manage the remediation of the 17-building, 285-unit complex following repeated delays and budget increases, the NZ Herald reported.
Campbell told unit owners in a letter last week that the administrators had applied for additional legal protection while carrying out their court-appointed role.
An indemnity clause had previously been included in the proposed administration scheme but was removed when the court approved the scheme in December. Campbell said the court considered the clause unnecessary at the time because the administrators were professional advisers, were paid professional rates and could obtain professional indemnity insurance.
The administrators now argue that appropriate liability protections are necessary given the complexity of the work. They say it is not practical or appropriate for them to carry personal risk for claims arising from work undertaken in good faith while administering the scheme.
They have asked the court to reinstate a modified clause indemnifying them against liability except in cases of wilful misconduct or gross negligence. Alternatively, they propose excluding Campbell and Webb from personal liability while directing claims relating to their appointment to Deloitte, subject to an overall damages cap.
Barrister Tim Rainey, representing a Hong Kong-based unit owner opposing the application, said the proposed protection could prevent owners from pursuing future claims over alleged negligence, poor advice or decisions that increased remediation costs.
His clients bought their apartment as an investment for their children using their life savings and now face estimated repair costs of between $800,000 and $900,000.
Rainey said professional administrators earning rates of up to $900 an hour should remain accountable for exercising appropriate skill and care. He acknowledged Campbell and Webb could not be responsible for decisions made before their appointment.
According to the NZ Herald, a Deloitte spokesperson said the indemnity protection now being sought had been approved by owners when the proposed administration scheme was put to a vote before the administrators were appointed.
A notice of opposition has been filed by one unit owner, with the High Court expected to determine the application at a hearing this month.
