Love's partner in council fee controversy

HAMISH RUTHERFORD AND TIM DONOGHUE
Last updated 05:00 08/10/2012

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Sir Ngatata Love's partner was paid more than $170,000 to resolve a property dispute for the Wellington City Council, which was unaware she was also being paid by developers planning to build on the land.

Documents released under the Local Government Official Information and Meetings Act show the council engaged Lorraine Skiffington to secure a sale and purchase of 2 Lambton Quay.

The site of the former Cecil Hotel was acquired by the Government during World War II to house US troops, but the Edmonds family fought a protracted legal battle against the Crown and the council to win it back in 2005 and 2006.

Council chief executive Garry Poole told The Dominion Post the council was left in a weak position on land needed for the capital's transport system, with owners who had refused to negotiate with it.

Sir Ngatata, the Tenths Trust chairman, approached Mr Poole in May 2007, believing he could use his good relationship with the Edmonds "as a means of ending the stalemate".

He proposed Ms Skiffington be engaged as a lead negotiator to strike a deal between the Edmonds family and the council, which would cover her costs, at $350 an hour.

Mr Poole said the council believed she worked as a lawyer for the Wellington Tenths Trust.

Over the following six months she filed three invoices totalling $154,350 plus GST.

The invoices show the council was charged for dozens of meetings between Ms Skiffington and members of the Tenths Trust, as well as property developers, who at the same time were paying her to progress plans to build an office tower on the Lambton Quay site.

Last week Mr Poole said that at the time the deal was struck he was unaware Sir Ngatata and Ms Skiffington were in a personal relationship but it would not have stopped him hiring her.

He was also unaware that Ms Skiffington had a $3 million consultancy deal with a group funded by Auckland property developers Redwood and financiers Equinox. This included paying her to progress plans for an office tower on the Lambton Quay site.

"I did not know that was happening. We did not know that," Mr Poole told The Dominion Post.

It appears Ms Skiffington's arrangement with the council on the Lambton Quay site was also unknown to developers.

"It's news to me," Equinox partner Kerry Knight told The Dominion Post on Friday.

Ms Skiffington's agreement with Redwood and Equinox is part of a Serious Fraud Office investigation into transactions of the Wellington Tenths Trust.

Initially focused on the development of Pipitea Plaza, the headquarters of New Zealand's spy network, Ms Skiffington was also paid to progress other development proposals on Lambton Quay and Shelly Bay.

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Shortly before The Dominion Post revealed the SFO investigation, Sir Ngatata stood down as chairman of a number of Maori Trusts, including the Port Nicholson Block Settlement Trust.

Documents released by the council show Mr Poole had reservations about invoices Ms Skiffington sent him detailing the work she was charging for, with no certainty of how long the negotiations would take.

Twice he wrote directly to Sir Ngatata requesting an estimate of what the total cost of the negotiations would be.

"I have approved the Skiffington invoice without this cost estimate but it is clear this still needs to happen so that both parties can assess our respective commitments as we go forward," Mr Poole wrote.

Following a second request for a cost estimate, Sir Ngatata wrote to Mr Poole explaining that part of the reason the negotiations were uncertain was because of the animosity created by council officials.

"While the deal is not sealed we are close to getting over the line but as with the expectations of success at the World Cup nothing is certain until the final whistle."

Mr Poole said last week the Skiffington deal was a prudent use of Council funds given the "unique" situation.

"You do not get yourself into situations like this very often where you build a facility and over the passage of time it turns out to be someone else's land you built your facility on," Mr Poole said.

"I think the outcome we achieved given the circumstances was very satisfactory."

THE CECIL SAGA

The Cecil Hotel, at 2 Lambton Quay, was owned by three generations of the Edmonds family from 1865. In 1942, it was acquired by the Government for use by American marines.

In 1989, the hotel's land was to be returned to the city council.

In 1995, however, the Edmonds family asserted their right to an offer back under the Public Works Act 1981 and the High Court ruled that part of the land should be returned to the family. A Crown appeal against the decision failed.

Sir Ngatata Love proposed that his partner, Lorraine Skiffington, negotiate with the Edmonds family, with whom he was on good terms.

- The Dominion Post

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