Chasing millions
Tauranga council considers appealing High Court decision
Tauranga City Council (TCC) may appeal a High Court decision rejecting its bid to recoup losses it says exceed $20 million from two contractors linked to an abandoned transport hub project.
The proposed Harington St Transport Hub was expected to provide spaces for 550 cars and 250 bicycles on prime real estate in the city’s CBD.
TCC abandoned the partially built project in 2020 after defects were found, eventually selling the site for $1.
The remediated site is now where construction of the $60m, 14-storey Panorama Towers office and commercial building is taking place.
TCC went to court claiming transport hub project contract breaches by contractors Harrison Grierson Holdings, which designed the structure, and Constructure Auckland Ltd, which was engaged to review the structural design.
Losses the council listed included more than $20.5m in “wasted costs” and loss of land value exceeding $5.3m.
However, it was argued in the High Court case Harrison Grierson and Constructure Auckland’s liability limitation clauses in contracts capped how much they could be liable to pay at a fraction of the council’s claim.
Justice Kiri Tahana released her decision on March 28, stating limitation of liability clauses in the contracts did apply.
The council must decide this month whether it will amend its claim.
Council chief executive Marty Grenfell told the Bay of Plenty Times the council and its legal advisers, including a King’s counsel, would take time to consider the 93-page judgment and what future action it might take.
Anatomy of a building project failure
In March 2017, Harrison Grierson was awarded a tender for the structural design of the transport hub.
With the fee charged exceeding $400,000, a clause in the standard agreement capped its professional liability at $2m and public liability at $10m in aggregate.
Constructure Auckland provided a proposal to the council in November 2017 for a $15,000 structural peer review of the project based on a shortform agreement. A clause gave a maximum liability of five times the fee up to $500,000.
Both parties included liability limitations in their reports and producer statements to the council.
The council issued building