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Couple fighting home build firm score important win

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Suzanne and Mark Chamberlain have been awarded legal costs after a Court of Appeal
decision regarding their home in Nelson. Photo / Tracy Neal

A couple fighting the home build firm which locked them out of their house on possession day have been buoyed by a recent win, but they’re still some way from the finish line.

Mark and Suzanne Chamberlain are now in the fifth year of a legal wrangle that spans the District Court, High Court and Court of Appeal.

Central to the dispute is who will pay to fix the list of faults the Chamberlains allege were discovered just prior and since possession of their north Nelson home.

The company which built the home, LSK Builders which operates the Nelson franchise of GJ Gardner Homes, says it’s out of pocket because the Chamberlains withheld a portion of the final payment due on possession.

Suzanne and Mark Chamberlain at home in Nelson. Photo / Tracy Neal
Suzanne and Mark Chamberlain at home in Nelson. Photo / Tracy Neal

According to a recent High Court decision, LSK claimed it was owed about $200,000. The Chamberlains told Open Justice that the amount withheld – in a lawyer’s trust account – was just under $145,000.

The building firm locked the doors on the day they were to move in. The Chamberlains responded by smashing into the home. Mark Chamberlain said this formed a part of the firm’s argument against them.

The case of who paid, and how much to fix the alleged faults was yet to be heard, but parallel to this process was an attempt by LSK to maintain a caveat on the property, to secure the amount of money it felt it was owed.

The caveat was placed against the title on the Chamberlains property in late 2018. In January 2019 LSK registered a mortgage against it to secure the amount in dispute, pending the outcome of the proceeding in the District Court – the matter yet to be heard.

The Chamberlains sought to have the caveat lapse; LSK sought an order that it remain, and the High Court eventually dismissed the firm’s application.

The Appeal Court has this month upheld the High Court’s decision.

The associated costs award means the Chamberlains will now get back some of the tens of thousands they’ve so far spent on legal fees.

Suzanne said costs were awarded against the firm each time, which had remained unpaid until this latest Appeal Court matter.

“Now that we’ve reached this point, it hasn’t been overturned so that means we’re now owed costs from all three wins.”

Mark said although the recent win was relatively minor, it still felt like a big win for them.

“It was a legal win, and it was the Court of Appeal – the second-highest court in the country. How it even got there… we’re a bit stumped.”

Suzanne added the process had been an expensive, futile distraction from the main argument: The caveat would have prevented the Chamberlains from selling the property, but that wouldn’t have been possible without the home being fixed. Even if they had wanted to sell, the bank would need to discharge each party’s mortgage before any balance was paid.

“We wouldn’t go down that track because that would mean they (LSK) would get the money we believe they shouldn’t get. We’re still hamstrung by that – we can’t move forward in any way – it was a pointless exercise.

“It was a thorn in our side but now that’s gone, and the ache has stopped but we still have the limp.”

The building firm was invited to comment but did not respond.

Suzanne and Mark Chamberlain say they're happy with a recent legal decision in their favour, but there's still a way to go before the dispute is resolved. Photo / Tracy Neal
Suzanne and Mark Chamberlain say they’re happy with a recent legal decision in their favour, but there’s still a way to go before the dispute is resolved. Photo / Tracy Neal

The Appeal Court was satisfied there was no error in the High Court’s conclusion over whether the caveat could be sustained, under the circumstances. It said that the right under a building contract to register a mortgage had been exercised, but it did not accept that the right existed to maintain a caveat “for the protection of the builder’s rights” in the contract.

Mark Chamberlain said a strand of the firm’s argument was its claim for projected legal costs, including the cost of all their appeals, and that the $175,000 mortgage it had placed on the property was insufficient to cover their claim – plus their legal costs.

He said the High Court decision had made it clear that could not be done, and the Court of Appeal agreed.

The company argued that the “selected priority amount” reflected the money that LSK considered was due and owing at the time the mortgage was registered.

However, the decision noted that the company’s lawyer suggested there might be difficulty with that, including allegations that a priority sum included unilaterally on the mortgagee’s behalf was “a fabricated priority amount”.

The Chamberlains said the case to resolve the matter over the alleged faults was currently being built.

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