NBL boss Larry Kestelman and Melbourne builder sued over ‘mould, damp’ in luxury units

Mould, honeycombing cement and damp are among the litany of alleged defects plaguing a luxury apartment block built by Larry Kestelman’s building company.

An artist’s impression of 30 Willansby Ave, Brighton.

Mould, “honeycombing” cement and inadequate drainage causing the flooding of some units are among the litany of alleged defects plaguing a luxury apartment block built by Larry Kestelman’s building company.

Mr Kestelman, who made his fortune as an internet entrepreneur and is worth $929m according to this year’s Richest 250 list, and builder Obaid Naqebullah are being sued in a bid to fix structural defects in a complex in Brighton in Melbourne’s southeast.

Updated court filings lodged with the Victorian Supreme Court, seen by The Australian, reveal a list of issues identified by a special purpose vehicle that owns 10 of the apartments in the block and has lodged the claim.

A spokesman for Mr Kestelman said he was defending the proceedings, and as the matter was before the court, “it is not appropriate to comment further”.

Mr Kestelman, who is no longer a director of the company contracted to build the apartments, Shangri-la Constructions, is listed as the first defendant.

Mr Naqebullah previously denied liability. Last year, The Australian revealed that after the Brighton luxury apartments were built between 2009 and 2011, “major structural and cosmetic defects became apparent”.

Obaid Naqebullah, managing director of Marcopolo Property.

Larry Kestelman. Picture: Getty Images

“Water ingress through penetrations in the walls is resulting in long-term and ongoing deterioration of the walls, and the introduction of mould where the walls remain damp,” the updated court filings allege.

As well, “The ground floor slab has honeycombing and a number of cracks that allow water ingress in courtyards and terraces,” the filings state.

“Poor waterproofing of the terraces has contributed to this water ingress.”

Honeycombing makes cement surfaces appear rough.

It is also alleged that waterproofing of terraces around the perimeter of the building is “non-compliant”.

“The failure to provide a flashing at the base of the wall is causing rising damp on the render coat. Moss is also evident,” the pleadings said. “Window and door frames/sub-sills are non-compliant. The terraces are not properly waterproofed.”

Internal boundary partition walls between the terraces are allegedly lightweight and made of treated pine which require “demolition and rebuilding”.

The documents also claim that on some balconies, only one drain has been installed, which “has contributed to the flooding of lower storey units during heavy rain”.

It is alleged “internal floor tiles are cracked and drummy”, bathrooms and laundries have not been waterproofed and fridge cavities are not ventilated.

Wealthy property developer Jonathan Hallinan was a former director of the company that is suing Mr Kestelman and Mr Naqebullah. Mr Hallinan died last year, aged 47, but his company, 30 Willansby Street, is now seeking $1.6m in damages to fix the alleged issues at the block.

Mr Kestelman is embroiled in another public fight over his ownership of the National Basketball League, which could escalate into court action, too.

Jared Novelly, owner of the Illawarra Hawks and scion of an American oil billionaire, has called on Mr Kestelman to relinquish ownership of the league claiming club owners lose millions of dollars while the NBL clocks profits.

Mr Kestelman told The Australian the league is not for sale: “If you offered me $100m, if you offered me $300m, it is not for sale,” he said.