Meriton Faulty Towers Court Case Terminated

Robert Clow
Australian Financial Review, 16 December 2003

Meriton Apartments won the penultimate battle in its long-running legal war with the Regis Towers apartment owners last week when the owners dropped their building defects suit in the Supreme Court.

The developer has been engaged in a series of legal battles with the owners, who are part of the largest strata scheme in Australia, over a number of alleged building defects and the caretaker manager agreement.

The decision is a major victory for the developer, but it still has to face an Office of Fair Trading insurance assessment that could theoretically cost the developer $20,000 a unit for each of Regis Towers’ 653 units, or $13 million in total.

A Supreme Court defeat could theoretically have cost the developer $20 million or $30 million.

Meriton recently won another battle when a court affirmed the developer’s right to sell the buildings’ management rights to a caretaker.

The decision to drop the latest litigation was made after a solicitor, David LePage , was asked by the Regis Towers’ strata manager, John Edwards of Strata Associates , to deliver an opinion on the direction and effectiveness of the Supreme Court litigation.

“It was my view that it was best to find a way to discontinue the Supreme Court proceedings and pursue a claim through the Office of Fair Trading,” Mr LePage explained. He said that the OFT had decided not to deal with the Regis Towers’ claim while the Supreme Court case was pending and that Meriton was more likely to be co-operative when dealing through the OFT.

“Any claims processed or paid are settled after any other action,” a spokesman for the OFT confirmed. “It is simply to avoid double dipping.”

Andreones , a firm of solicitors that specialises in strata management, had been handling the Supreme Court litigation.

Francesco Andreone , the managing director of Andreones, and Mr LePage said they did not know which firm would handle the OFT claim.

Judge Patricia Bergin issued what appeared to be a stinging condemnation of the way litigation had been handled when she said, “This litigation has been so badly managed by the plaintiff that there will have to be a costs order today.” The owners have agreed to pay $40,000 of the owners’ costs.

“I am very unhappy about the way the litigation has been run,” echoed Stephen Goddard , who was executive chairman of the owners’ corporation when the litigation was initiated.

“And I am unhappy about the way the litigation has been discontinued,” he said, and added that he has no regrets about making the claim.

Meriton has made the case consistently that the litigation was a costly waste of money for the owners. “I think it is a great pity, for me and for the owners of Regis Towers that so much money has been wasted on lawyers and litigation,” Meriton’s billionaire owner, Harry Triguboff, said.

“It would have been much better to spend it on maintaining the building.”