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Several cities across Australia and New Zealand are the beneficiaries of an ambitious and aesthetically charged construction programme by the Australian Temperance & General Life Assurance Society (T&G) in the 1920s and 1930s.
Many of the buildings are still standing today and have heritage protection. Among these is the Harcourts Building at the expensive end of Wellington’s CBD. It was built in 1928, a steel and concrete structure in the architecture of the Chicago School.
Its street presence and heritage qualities have earned it Category One status under the Heritage New Zealand Pouhere Taonga Act 2014 but, with age has come fragility. It is between 14% and 19% of New Building Standard (NBS), against a minimum statutory requirement of 33%.
It had been fully tenanted but, since the devastating Christchurch earthquakes of 2010 and 2011, all but one of the tenants has left and the remaining tenant is paying a fraction of their previous rent.
Then, in July 2012, the Wellington City Council served the owner – Mark Dunajtschik – with a notice under the Building Act 2004 giving him 15 years to either strengthen the building or demolish it.
The notice seemed to suggest that the Council was neutral as to which course he chose. So Mr Dunajtschik, after undertaking an extensive cost benefit analysis into improving the building’s seismicity, decided to clear the site and build a modern 20 storey office complex which would be integrated with the adjacent HSBC Tower – which he also owns, and which was built in 2002.
However, his development plans were brought to a shuddering halt when the Council declined him the necessary resource consent to tear down the Harcourts Building. This was consistent with the Council’s District Plan and with the Resource Management Act 1991 (RMA), both of which contain strong preservation provisions:
- the Plan provides that a listed building can be demolished “only where the Council is convinced that there is no reasonable alternative”, and
- the RMA requires that, before acceding to demolition, the consent authority must be satisfied that the benefits deriving from the proposed new use will overcome the nationally important protection of historic heritage.
Mr Dunajtschik appealed to the Environment Court. The Court accepted his dilemma – the building was unsafe, he couldn’t insure, couldn’t tenant it, and was not able to make enough off it to even cover the rates bill – but declined his application on the basis that it didn’t meet the tests imposed by either the District Plan or the RMA.
So he appealed the Environment Court’s judgment to the High Court which upheld the appeal and referred the case back to the Environment Court to be reheard. And one problem became two problems.
Not only did the Court stand by its original ruling but it heard new evidence, not raised at any of the earlier hearings, that the failure of the Harcourts Building in an earthquake could cause serious damage to the HSBC Tower, potentially trapping anyone above the 8th floor.
Mr Dunajischik had been threatening to let the Harcourts Building “rot” but the safety issues which have been raised now around the HSBC Tower have probably removed that option from practical contention because they may force the Council’s hand.
As the Environment Court noted in its decision:
“The Council has clearly concluded the risk is acceptable (at least to the public) in giving the owners 15 years to comply with the notice. If the HSBC Building risk now identified is considered unacceptable, then the Council has the power to address that building’s safety, to give an earlier date for repair compliance or identify a building as dangerous.”
Mr Dunajischik had offered to pay $5 million each toward restoring two iconic Catholic properties in Wellington, St Mary of the Angels Church and St Gerard’s Monastery; amounts which the court acknowledged were sufficiently generous to probably ensure that both would be preserved.
But it said the primary test was not about the preservation of heritage but about whether there was no reasonable alternative to demolition of the Harcourts Building and, given its primary conclusion that this threshold was not met, “payments to other projects (no matter how meritorious) do not arise”.
is a partner at Chapman Tripp and Jill Gregory
is a senior solicitor. Both specialise in environmental, planning and resource management law.