The Bianco Off Queen is a two-tower apartment building with 157 units. It was built with defects. Body Corporate 406198, the Body Corporate for the Apartments, together with individual unit owners sued Argon Construction Ltd as head contractor and the Auckland Council in negligence.
In the High Court, Andrew J awarded the sum of $5,344,816.55 in remedial costs (including a sum for escalation) as well as $779,500 in general damages. This compared to the sum initially claimed by the Body Corporate of $40,739,870. Costs were awarded to the Body Corporate on a category 3B basis in the sum of $583,254 and disbursements of $579,514.73 notwithstanding a pre-trial Calderbank offer at nearly three times the damages award.
In BC406198 & ors v Argon Construction Ltd & ors [2025] NZCA 684 the Court of Appeal:
1. Dismissed the BC appeal;
2. Allowed the Argon & Council appeals about the award for consultancy and costs;
3. Allowed the Council appeal about escalation costs.
In relation to consultancy costs of $450,000 the Court found that the evidence proffered by the Body Corporate in support of the claimed consultancy costs was unreliable hearsay, the deponent being unqualified to give that evidence. But there being no dispute that some consultancy costs were incurred, the proper remedy is to refer this matter back to the High Court for reconsideration with the benefit of relevant evidence.
On costs the Court of Appeal said the trial Judge did not approach the significance of the Calderbank offer on the correct legal basis. Argon and the Council were entitled to their post-Calderbank costs unless there were compelling countervailing factors, and there needed to be exceptional reasons for making an award of costs against a qualifying Calderbank offeror. It referred the issue back to the High Court for reconsideration. The Court did not disturb the apportionment of the costs award as 65% to council and 35% to Argon.
On defects and damage the Court preferred the evidence of Steve Alexander over that from Maynard Marks for the BC.
