High-aiming developer ordered to tone down $7.17m claim
A Christchurch-based Korean developer who tried to build a food court in a heritage listed building without the appropriate consents has tried to claim damages for loss of business from his contractors in the High Court at Christchurch.
But he sought too much – $7.17 million in fact – and a judge has given him until this week to reapply so long as he sticks to the High Court rules and doesn’t seek more than the $30,000 for which the contractor in question was liable.
Korean-national Namgeun Jo owns heritage listed ex-department store Stranges Building, on the corner of Lichfield and High Streets in Christchurch.
He wanted to have the building, which is home to miscellaneous retail outlets, redeveloped with an eight-outlet food court.
In 2005 he hired Bernard Johnston on a $30,000 contract to apply for building and resource consents on his behalf.
Consents were needed for external alterations and the internal fitout of the building, and Mr Johnston was also required to arrange contractors to carry out the work to a budget of $200,000 excluding GST.
Works involved replacing the roller shutter doors with new automatic sliding doors.
Mr Jo designed the food court himself, and employed Southern Hospitality to design the mechanical services, which subcontracted out the design of a ventilation duct that would not have been visible from the street.
The agreement between Mr Jo and Mr Johnston had specified that a mechanical services consultant be hired by Mr Jo, limiting Mr Johnston’s liability to $1000,000 or five times the fee for agreed services.
The council’s Property Information Memorandum issued in April 2007 does not mention the duct.
Building consent was issued in June 2007, at which time Mr Johnston’s contract had ended.
“Mr Jo must have started building work promptly. The council issued a stopwork notice on August 23,” Justice Rhys Harrison said in his judgment.
DD Architects, the company Mr Jo hired to supervise construction, noted in writing to the council on August 29 that the building consent didn’t mention the duct, and that the consent should be amended to include it.
The firm submitted an updated design which featured the duct but in November 2008 when Mr Jo applied for a retrospective resource consent, the cCouncil dismissed it.
“The ducting could not be installed in the indicated location in any case, due to the location of the stairs and as it would exit into airspace over an adjoining site,” the Ccouncil said at the time.
“It is clear to the panel that the ducting was not authorised by the 2006 resource consent as no details were provided of it at that time.”
Mr Jo wouldn’t consider an internal ducting system because of the costs involved but the council said the proposed duct would be intrusive to the “architectural reading” and refused to issue consent.
Mr Jo claimed $7.17 million from both Mr Johnston and Southern Hospitality, including loss of rental income for nine years and loss of business income for the same period while the food court’s completion was delayed, was farfetched according to the judge.
“Mr Jo could not possibly succeed against either defendant for $7.17 million or any sum remotely near it,” Justice Harrison said. “A party who breaches a contractual duty is only liable for the losses truly attributable to that breach.”
Mr Jo, who was representing himself in court, has until today to file an amended statement of claim which complies with High Court rules.
“My advice to Mr Jo [is] to promptly obtain competent legal advice,” Justice Harrison said.
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