Investor Challenges Auckland Council Over Fitzroy Hotel Dispute

A legal battle has emerged between Australian tourism investor Terry Huang and the Auckland Council regarding the historic Fitzroy Hotel on Wakefield Street. Huang, facing prosecution for operating a “dangerous” building, claims the council is responsible for the damage and failed to disclose critical evidence that could support his case.

The Fitzroy Hotel, recognized as the oldest surviving brick building in Auckland’s central business district, has been surrounded by road cones and barriers since July. The council issued a notice citing “potential falling masonry” as a risk to public safety. According to several engineering reports, a noticeable slant in the building is linked to a subsiding street outside, complicating efforts to stabilize the structure.

Huang argues that the council’s demands to rectify the building’s issues within a month were unreasonable. To finance the necessary repairs, he has returned to the Gold Coast and remortgaged his apartment. He has incurred substantial expenses, including $6,000 for an engineer’s report from the council, which he claims he only received after a formal request under the Local Government Official Information and Meetings Act.

The upcoming court case in January 2024 centers on Huang’s assertion that the council’s actions led to the formation of a sinkhole, for which he is now being prosecuted. Adrian Wilson, council compliance manager, stated that building owners bear the responsibility for maintaining their properties. He emphasized that the prosecution focuses solely on whether Huang complied with the dangerous building notice, indicating that any liability for the building’s deterioration is a separate issue.

Huang continues to represent himself in court and has recently applied to call 22 witnesses, including several council staff members. He plans to argue that the council’s actions represent an “abuse of process,” seeking a stay of proceedings based on this claim. His case is bolstered by documents obtained through official information requests, which detail multiple incidents related to the building’s underground issues.

One log from Watercare, the entity responsible for water management, indicates that there were at least seven incidents involving raw sewage reported in close proximity to the hotel. Jon Piggott, head of wastewater at Watercare, stated that their investigations revealed no evidence of ground instability caused by their work. He characterized the incidents as related to “minor watermain breaks.”

An engineering report commissioned by Auckland Council from consultancy firm Tonkin & Taylor highlights the possibility that settlement around the hotel may result from poorly compacted service trench backfill or water leakage from underground pipes. The report suggests that the depression forming in the footpath outside could indicate a “tomo” or similar feature developing below the surface.

Despite receiving an advisory from the council stating that the building was nearing the end of its life and required significant strengthening, Huang claims he was not provided with the full report outlining these findings until much later. As the legal proceedings progressed, he was initially prepared to plead guilty and resolve the matter quickly. However, the maximum penalty for the charges was revealed to be $1.5 million, a significant increase from the $200,000 originally discussed.

The council has also been involved in discussions with a potential buyer for the Fitzroy Hotel. Steve Bielby from the Auckland Notable Properties Trust offered Huang $150,000 for the site, estimating that the cost for necessary repairs would be around $2.75 million. Huang feels that the prosecution may have been an attempt to pressure him into a distressed sale at a significantly undervalued price, a claim Bielby disputes, asserting that he would purchase the site for half a million dollars but denies any collusion with the council.

The council maintains that its communications do not indicate Huang was obligated to pursue any specific option, as he must adhere to legal requirements to ensure the building’s safety. Huang remains resolute, insisting that the council must first address the issues with the sinking street before he can proceed with repairs on the hotel. He expresses confidence in his case, stating, “Look at the evidence. You dug the road. You broke the building. But I’m not holding grudges: I just want to move on.”