Sofitel Viaduct Harbour Hotel room owners fight each other, Supreme Court dismisses action

It’s a case of 110 hotel unit owners v 81 hotel unit owners: the larger group lost.

Owners of 110 hotel units in a five-star $100 million Auckland waterfront hotel lost an attempt to challenge the smaller group in a long-running dispute between the two.

Those who invested in the stark white 191-unit Sofitel Auckland Viaduct Harbour, 21 Viaduct Harbour Ave, are at loggerheads. The building opened last decade as a Westin, with its famous no-smoking policies.

Owners of 81 units in the big building have withdrawn their rooms from the Sofitel management operations which runs the other 110 rooms. Those other owners did not agree with how the place was being run.

The disillusioned investors – many living overseas – are now offering the rooms to guests under the Marsden Viaduct Hotel brand.

Marsden is a professional property management business whose assets include 228 Queen St, a character block where the business has undertaken a refurbishment and will soon announce a new global retailer from the ground floor.

In a clear display of neighbours at war, Sofitel and Marsden both operate from the same property between Halsey St and the waterfront.

Today, the Supreme Court released a decision dismissing an application from the body corporate. It wanted to appeal against a decision over the property with 172 hotel suites and 16 commercial titles, including a restaurant, bar, conference and meeting areas.

In body corporate 384911 v Wong Sun Een and others, Justices O’Regan, Ellen France and Williams refused to allow the larger group’s application to overturn an Appeal Court ruling.

That larger group includes Mt Roskill Richlister family the Pandeys which run CP Group, Queen St. Pandey Viaduct Quays Ltd and Pandey Viaduct Suites, Pandey Viaduct Suites Two and Pandey Viaduct Suites Three were respondents in High Court action over the property last year.

Many overseas owners are in the smaller 81-unit Marsden group.

But it was that smaller 81-unit group which had victory from the Supreme Court ruling because the larger body corporate associated with the Pandeys was denied the opportunity to appeal against the Appeal Court decision to challenge how the business is running.

“The owners of the majority of the units now operate a Sofitel Hotel from the units they control, while the units of the respondents who own 81 of the residential units are not involved in the Sofitel operation. The litigation leading to the present case is a part of a wider dispute between the owners of the majority of the units and the respondents,” the Supreme Court ruling noted.

A High Court decision said the building was completed in 2007 but in 2020, Prakash Pandey placed Viaduct Quays Hotel into voluntary liquidation due to challenges from the pandemic.

The lease agreement with Accor Hotels which had run the property from 2012 was terminated. The hotel was shut in July 2020 with job losses.

Viaduct Quays Hotel had received a Government Covid wage subsidy payout of $929,011.20 for 139 employees.

The majority of owners were participating in the new hotel business established there under the name Sofitel Auckland Viaduct Harbour, the High Court noted last year.

The Supreme Court ruled the body corporate had to pay the costs of the rival group.

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