• Owners of The Ridge apartments can cancel their unit titles and sell the land. 
• Justice Ian Gault approved the application, citing exhausted options for the 33-unit property owners. 
• The building was leaky and required costly repairs, leading to a sale agreement with Coastline Investments. 

Owners of The Ridge apartments in St Marys Bay have won court approval to cancel their unit titles so they can sell the land beneath their wrecked homes and walk away. 

Justice Ian Gault approved their application in his March 20 judgment from the High Court at Auckland, saying the owners of the 33-unit properties at 23 Hargreaves St had exhausted all other options. 

The owners were represented by leaky building specialist barrister Tim Rainey. 

The Ridge apartments were originally an office block, which was converted in the late 1990s. 

Rainey said today: “This really was a situation where the owners are salvaging what they could from what was a disastrous situation. It is a good outcome in the circumstances because this was a highly complicated ownership and not an easy situation for them.” 

The judgment said the redevelopment from offices was unsuccessful because the building was assessed as leaky and required extensive remedial work. 

Jagoda Jezowska and her husband Denis own an apartment in the block. Last year, the anaesthetic technician told how she and her family were considering leaving New Zealand because of the heartbreak caused by buying a unit in what turned out to be a defective building. 

Jagoda Jezowska, an apartment owner of one of the defective apartments in The Ridge. Photo / Jason Oxenham 

“This was our first home. It’s a disaster. We are in constant stress because we cannot pay the half a million dollars that they are expecting from us for a 65-square-metre apartment,” she said about initial plans to fix the building, which were abandoned when cost estimates were received. 

She appeared in the second series of the three-part documentary A Living Hell: Apartment Disasters, by John Gray and Roger Levie of the Home Owners and Buyers Association. 

Today, she said: “We got nothing. We were scammed out of our own apartment and ended up with zero dollars.” 

But Rainey said in response that Jezowska and her husband did not contribute to levies to pay for repairs. 

“They will get nothing simply because the sale price for the land has been insufficient to pay all the owners. It is tragic but there’s no other way the court could fairly distribute the proceeds of sale.” 

The High Court judgment this month said that, in 2010, defects prompted the body corporate to apply to the court for an order establishing a scheme for the repair of the defects and damage. 

From 2010 to 2015, owners tried to sue parties responsible for the design, construction and certification of their units. 

Brosnan Construction was appointed to fix the homes but one unit owner - 201 Ltd - applied to the court for an injunction, which was dismissed, Justice Gault’s decision said. 

The internal dynamics within the body corporate changed between May and August 2018. Several units were sold, so the minority owners who had made the application for an injunction became the majority ownership group within the body corporate. 

The new majority intended to cancel the contract with Brosnan Construction and redesign the remedial work to save costs. 

Inside the abandoned apartment building at 23 Hargreaves St below the Ponsonby ridge. The Ridge apartments are now being advertised for sale. Photo / Bayleys 

But remedial work uncovered more problems. The owners asked the Home Owners and Buyers Association to determine their best options. It found the cost of fixing the building was likely to be more than $30 million and the owners were unlikely to be able to fund that. 

So they tried to sell the partly-wrecked apartments and land and three parties considered purchasing. 

One wanted to go ahead, the judge noted. 

An apartment in The Ridge was the first home for Jagoda Jezowska and her family. Photo / Jason Oxenham 

“The body corporate has a conditional agreement with Coastline Investments. The due diligence condition had been satisfied so that the only remaining condition is the court making orders for the cancellation of the unit plan and preserving the right-of-way easement recorded on the unit plan,” the judge said. 

Companies Office records show Coastline Investments is owned by Chengdong Chen of West Harbour. 

Justice Gault said that, if those orders could be made, Coastline had indicated it would buy the property. 

The court then needed to determine how Coastline’s purchase price would be split among owners. 

Mortgages needed to be cancelled, but the judge stressed that did not discharge the liability of those who had borrowed money. 

The names of owners and their lenders are listed in the decision, showing mortgages to Westpac, ASB Bank, The National Bank/ANZ and others. 

The judge made the orders to cancel unit titles, which means the owners can now sell. The body corporate will be dissolved once the sale goes through and the distribution of proceeds is made. 

Anne Gibson has been the Herald’s property editor for 25 years. She has written books and covered property extensively here and overseas.