Ex-Hawkins business ordered to pay $13.4M to fix leaky school

Tuesday 1st May 2018

H Construction North Island, which used to be part of the McConnell family's Hawkins construction business before it was sold last year, has been ordered to pay $13.4 million towards repairing nine leaky buildings at Botany Downs Secondary School in east Auckland.

In the High Court in Auckland, Justice Mathew Downs today ruled against the former construction company, which built a series of interlinking two-storey buildings with interconnecting roofs between 2003 and 2009, agreeing "the roofs leak because they suffer a host of construction defects, including missing fixings and poorly formed penetrations" and that the ex-Hawkins unit was liable to pay the cost plus GST of remedying five of the six defects, and one component of the sixth defect.

"The sum is not small, but Hawkins was paid approximately $28 million to build the school; pupils and teachers have not had the benefit of healthy code-compliant buildings for eight years; and the award reflects the amount necessary to repair the school, not more," Justice Downs said.

The judge said the most important evidence was by lay witnesses from the school, none of which was contested, and that when he went on a site visit: "Two live leaks were obvious: from the gymnasium roof, onto the floor; and from the roof of the administration building into the staffroom. Each had an accompanying bucket."

The named company is ultimately owned by the McConnell family, who sold Hawkins to ASX-listed engineering consultancy Downer EDI for A$55.4 million last year. At the time of the acquisition, Hawkins had negative working capital.

The Ministry of Education and school brought the case against the former building firm in what has been a major issue for the government agency, with a long-running action against Carter Holt Harvey over the installation of Shadowclad cladding in 833 school buildings across the country. The building products firm has successfully dragged in local authorities as third parties in the dispute.

In 2015, the ministry estimated the cost of fixing serious leaks will be between $1.1 billion and $1.3 billion, down from an earlier forecast range of $1.3 billion to $1.79 billion. The ministry embarked on court proceedings against cladding manufacturers in 2013 and has since settled with building materials makers James Hardie Industries and CSR.

Justice Downs today said the Botany Downs Secondary School remediation will probably take about 100 weeks, and while it ranked "reasonably high" on the ministry's list of leaky school buildings to be fixed, the government agency had only held "informal talks" with the school.

In arguing over the cost of remediation, the judge noted that the threshold for a spending decision to go to Cabinet was $25 million and for the minister, $15 million, neither of which the Botany Downs school met.

The judge didn't make an order on costs, instead encouraging the parties to reach an agreement.

(BusinessDesk)

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