Attorney-General v Body Corporate 68792 HC Wellington CIV 2006-485-1341
[2007] NZHC 217
•29 March 2007
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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV: 2006-485-1341
UNDER The Declaratory Judgments Act 1908
BETWEEN ATTORNEY GENERAL First Plaintiff
ANDTRANSIT NEW ZEALAND Second Plaintiff
AND BODY CORPORATE NO. 68792
First Defendant
ANDALLAN VICTOR DEWSNAP Second Defendant
Hearing: 19 October 2006
Appearances: J A L Oliver and J R Burns for First and Second Plaintiff
First Defendant abides decision of Court
Second Defendant appears in Person
Judgment: 29 March 2007 at 11.30 am
JUDGMENT OF MALLON J
Contents Introduction..........................................................................................................................................[1] The facts...............................................................................................................................................[5] Statutory provisions ...........................................................................................................................[27] The second defendant’s position ........................................................................................................[53] The plaintiffs’ position.......................................................................................................................[57] Power under PWA to acquire rights and interests..............................................................................[60] Is the PWA inconsistent with the UTA? ............................................................................................[68] Is the Crown bound by the UTA? ......................................................................................................[77] Implied repeal ....................................................................................................................................[85] Other grounds raised by the plaintiffs ................................................................................................[93] Costs ................................................................................................................................................[106] Result ............................................................................................................................................... [110]
Solicitors:
J Oliver, Crown Law Office, PO Box 2858, Wellington (ph: 04 494 5613, fax: 04 494 5680)
S Reeves, Solicitor, PO Box 90150, Auckland Mail Centre (ph: 09 379 8594, fax: 09 379 8594)
ATTORNEY GENERAL AND ANOR V BODY CORPORATE NO. 68792 AND ANOR HC WN CIV: 2006-
485-1341 29 March 2007
Introduction
[1] Transit New Zealand (the second plaintiff) wishes to upgrade the section of State Highway 2 between Dowse Drive and Petone. To do so the Crown needed to acquire a part of unit titled land and remove that part from the Unit Plan. The steps the Crown took to remove the land from the Unit Plan were considered to be invalid by the Chairman (the second defendant) of the body corporate (the first defendant) through which the unit titled land is administered. As a result the Crown has not been able to implement the removal of the land from the Unit Plan for the purposes of the upgrade.
[2] The issues in this proceeding are whether the Crown can acquire part of land that is subject to a Unit Plan; and whether the Crown can acquire, for the purposes of passing resolutions to effect the removal from the Unit Plan of the land it has acquired, the voting rights from those who remain proprietors of unit titles and then exercise those rights. These issues depend on how the Unit Titles Act 1972 (“the UTA”) is to be interpreted in light of the Public Works Act 1981 (“the PWA”). The plaintiffs advised that the issues were of general importance for the Crown beyond the circumstances of this case.
[3] The issues are before me as an application under the Declaratory Judgments Act 1908. The plaintiffs contend that under the PWA the Crown was entitled to acquire any interest in land (including a part of an interest held by a unit holder). The plaintiffs contend that the Crown was also entitled to acquire and exercise the voting rights of the proprietors of the unit titles on resolutions before the body corporate that would effect the removal from the Unit Plan of the land required by the Crown. The plaintiffs say that the second defendant could not refuse to accept the votes cast by the Crown at a meeting of the body corporate because the matter was determined by the Environment Court. Alternatively the plaintiffs say that the Crown is not bound by the UTA when exercising its powers under the PWA. As a further alternative the plaintiffs seek relief under s 41 or s 42 of the UTA.
[4] The first defendant abides the decision of the Court. The second defendant appeared in person to explain that his position, as Chairman, was that he had no choice but to uphold the rules of the body corporate. He considered that this meant he could only accept votes cast by the proprietors of the unit titles. He considered that the votes the Crown purported to cast in respect of Units 1A, 2A and 8 at a meeting of the body corporate were not votes by proprietors of those units. Having taken this position he also stated that he abides the decision of the Court.
The facts
[5] A need to upgrade State Highway 2 between Dowse Drive and Petone was determined by Transit New Zealand in or about 1996. For the purposes of the upgrade the Crown needed to acquire part of land situated at 408 Hutt Road, Lower Hutt. It is comprised of 6,836m². It is unit titled property subdivided into 16 principal units, various accessory units related to the principal units, and common property. The units are used by the proprietors for various commercial and light industrial purposes.
[6] The part of the land that Transit New Zealand physically required for the public works comprised 1,171m² (“the Required Land”). That land is required for the construction of a ramp to take Hutt Road traffic to and from the State Highway 2 at a new Dowse interchange. The Required Land is along the northern boundary of the property. It is land contained in Unit 4 and Unit 6 as well as accessory units (carparks) utilised by those units. It also contained a portion of common property under the Unit Plan located in the area around those accessory units.
[7] Acquiring part of a unit plan has potential complications that other land does not. This is because, in addition to holding the estate in fee simple in a unit title, each proprietor of a unit title has rights in the common property under the unit plan as well as contingent interests in the land. Further, to remove land from a unit plan the UTA requires that a unanimous resolution be passed by the body corporate. The
body corporate is made up of all the proprietors of the unit titles. In light of these complications Transit New Zealand considered the options available to it.
[8] One option was for Transit New Zealand to acquire the whole of the unit titled property. Transit New Zealand concluded that this would be improper, unreasonable and arguably unlawful given that only 1,171m² of the 6,836m² was required for the public works.
[9] A second alternative was for Transit New Zealand to acquire the Required Land and then proceed with the public works without taking any further steps. Transit New Zealand concluded that this too would be improper, unreasonable and arguably unlawful. It considered that this approach would leave the unit titled property in a state of disarray which the proprietors of the unit titles would have the cost and inconvenience of addressing.
[10] The third alternative was that which Transit New Zealand determined to be the reasonable and proper one. That approach involved acquiring the Required Land. It then involved utilising the legal mechanisms under the UTA to remove the Required Land from the unit titled property, transferring that land to the Crown and preparing and depositing a new unit plan in substitution for the existing Unit Plan. This approach required resolutions of the body corporate to be passed under which these steps could be taken. The Crown considered it should acquire the interests held by all the proprietors of the unit titles that would enable the resolutions to be passed.
[11] Transit New Zealand sought to obtain the Required Land and all relevant interests by agreement. By agreement it acquired Units 4 and 6 and the relevant accessory units. By agreement it also acquired Units 3, 5, and 7 because of the impact the proposed works would have on these properties.1 It also sought to
1 The documents before me all referred to Units 4 and 6 and the relevant accessory units. I was not referred to the documents as they relate to Units 3, 5 and 7. I therefore refer from here on only to Units 4 and 6 and the accessory units and I do not understand there to be any particular issues arising out of the acquisition of Units 3, 5 and 7.
purchase by agreement the area of common property it required and the other interests it believed were necessary to enable resolutions to be passed to effect the removal of the Required Land from the Unit Plan.
[12] Negotiations took place in 2003 and 2004. In October and November 2004 agreement was reached with the proprietors of all but units 1A, 2A and 8. Under these agreements (amongst other things):
a) The Crown purchased each proprietor’s individual share in the fee simple estate in Units 4 and 6, the related accessory units and the common property over or under those units and accessory units to which the proprietors were contingently entitled to under ss 45 and 47 of the UTA;
b)The Crown also purchased all other rights with respect to the units in as above to vote on resolutions so as to be able to complete the works. This was said to include resolutions to demolish the buildings on Units 4 and 6, to transfer Units 4 and 6 and the relevant accessory units to common property (in accordance with s 19(2) of the UTA), to
subsequently transfer to the Crown 1,171 m2 being Part Lot 1 DP
40307 shown as sections 1 and 2 on a draft SO Plan attached to the agreements (in accordance with s 17 of the UTA) and to deposit a substituted plan;
c) The proprietors irrevocably appointed the Crown as its attorney to vote on the body corporate resolutions which were listed in a note to the agreements. If other resolutions were considered to be necessary the proprietors were not to unreasonably or unnecessarily withhold consent to the Crown voting on those other resolutions; and
d)The proprietors agreed to support any action that might be taken by the Crown should it seek a court order under s 42 of the UTA in the
event that greater than 80% but not unanimous support was given to any necessary resolutions.
[13] Prior to reaching agreement with the proprietors of the units other than Units
1A, 2A and 8 the Minister had issued notices of desire pursuant to s 18 of the PWA. Because negotiations with the proprietors of Units 1A, 2A and 8 were not progressing well the Minister then issued notices of intention to take land pursuant to s 23 of the PWA in respect of these proprietors in July 2004. The proprietors of Units 1A, 2A and 8 lodged objections to these notices.
[14] Transit New Zealand determined that amended notices were required. Accordingly new notices (the “Notices to Take”) were issued and served and served on the proprietors of Units 1A, 2A and 8 in October 2004. The Notices to Take included the following:
1.Take notice that the Minister for Land Information proposes to take under the Public Works Act 1981 all of the underlying fee simple estate in the land described in the First Schedule to this notice, which includes all your existing interests and all entitlements in:
(a) The common property:
(i) As shown coloured yellow on the attached copy of Unit
Plan 68792; and
(ii) Above and below Units 4 and 6, Accessory Units 14 to 19 (inclusive), and Accessory Units 73 to 90 (inclusive) on Unit Plan 68792 (“the Crown-owned Units”),
(currently forming all of the land described in the First Schedule to this notice other than the Crown-owned Units) in proportion to your unit entitlement as shown on Unit Plan
68792, which estate was created on deposit of Unit Plan 68792 under section 4(2)(b) of the Unit Titles Act 1972 (“the Act”); and
(b) The undivided share in the fee simple estate in the Crown- owned Units which you are contingently entitled to by virtue of sections 45 and 47 of the Act in proportion to your unit entitlement as shown on Unit Plan 68792, which estate was created on deposit of Unit Plan 68792 under section 4(2)(c) of the Act, and all other rights with respect to the Crown-owned Units, including your interest as registered proprietor of Unit
1A to vote in favour of resolutions to give effect to the actions in paragraphs 2(a), 2(b) and 2(c) and/or such other rights or actions required to give effect to the actions in paragraphs 2(a),
2(b) and 2(c).
…
[15] The actions referred to in 1(b) of the Notices to Take ([14] above) included the transfer of the Crown-owned Units to common property under s 19(2) of the UTA and the taking by proclamation of 1,171 m2 of common property as described in the First Schedule of the Notices to Take. The First Schedule described the land as 1,113 m2 and 39 m2 both being part of Part Lot 1 DP 40307 and showing as sections 1 and 2 respectively on SO Plan 341776. That is, the First Schedule referred to all the Required Land.
[16] The objections by the proprietors of Units 1A, 2A and 8 raised, amongst other things, the taking of the voting rights. The proprietors of Unit 1A stated that “the issue of taking Unit Owners voting rights is in dispute”. It also said:
We believe the interests sought to be taken by the Crown as described in the Sub Paragraphs (i) and (ii) of the Notices of Intention to take Land can be met by our granting the Crown an irrevocable proxy to vote for a fair market value on the resolutions stipulated in the two Notices of Intention to take Land, as attached.
[17] The objection from the registered proprietors of Units 2A and 8 was similarly worded. Their objection was supported by reasons set out in a document filed with the Environment Court in November 2004. Those reasons included the following:
f. This Notice to Take is not fair, [sic] sound in that it purports to take a vote that the Crown cannot take under the Public Works Act or that if it can take the votes [sic] exercise it without also taking our principal unit, and in the alternative because it restricts a right attaching to our principal unit which Transit does not seek to acquire.
g. In any event, even if the Vote can be taken it can only be exercised by the registered proprietor of the principal unit to which it relates. Therefore even if it could be taken it is useless to Transit without Principal Unit 2A.
h.That the Crown cannot transfer the Crown-owned units to common property because it cannot acquire the vote otherwise than in conjunction with the Principal Unit, and even if it could unless it is the proprietor of our principal unit it cannot exercise the vote. Therefore the notice is invalid to the extent that it states the Minister will transfer the Crown owned units to common property under section 19 of the Act. The current notice clearly contemplates both taking the vote and using it to invoke the Section 19 procedure.
[18] The Crown then called an extraordinary general meeting to pass the resolutions it believed it required. These resolutions covered:
a) Approving, by ordinary resolution, various structural works by the Crown on the Required Land, including demolition of buildings located on Units 4 and 6 and associated repair and reinstatement work;
b)Approving, by unanimous resolution, the transfer of Units 4 and 6 and the relevant accessory units to common property (in accordance with s
19(2) of the UTA);
c) Approving, by unanimous resolution, the transfer of 1,171 m2 being Part Lot 1 DP 40307 shown as Sections 1 and 2 on SO Plan 341776 (i.e. all the Required Land) to the Crown (in accordance with s 17 of the UTA);
d)Approving, by unanimous resolution, the execution of the plans and other documents necessary to give effect to the above transfers;
e) Approving, by ordinary resolution, the granting of rights of entry to the Crown to common property to enable necessary tasks connected with the public works to be carried out.
[19] The Crown envisaged that through its ownership of Units 3 to 7 and the agreements it had reached with the proprietors other than Units 1A, 2A and 8 the
resolutions would be passed by an 80% majority. It then intended to apply to the Court under s 42 of the UTA for an order deeming the resolutions to be unanimous. This plan was thwarted when, on the morning of 24 February 2005 (the day the meeting was to take place), three new proprietors were added to the existing two proprietors of Units 1A. The three new registered proprietors were the daughters of the two existing registered proprietors. At the meeting the proprietors of Units 1A,
2A and 8 cast their votes against the resolutions and, with the addition of the three new registered proprietors of Unit 1A2, the 80% threshold for an application under s 42 was not met.
[20] The next step was for the objections to the Notices to Take (lodged by the proprietors of Units 1A, 2A and 8) to be heard by the Environment Court. A hearing commenced on 13 June 2005. On 14 June 2005 the Environment Court suggested that the parties should consider entering into a court-facilitated mediation. The parties agreed to do so and mediation took place.
[21] The mediation resulted in agreements being reached between Transit New Zealand and the proprietors of Units 1A, 2A and 8. The settlement agreements with the proprietors of each of Units 1A, 2A and 8 were in similar terms. They provided (amongst other things):
a) Transit New Zealand agreed to pay compensation to the proprietors for the taking of the interests in the land under a process set out in the agreement;
b)The proprietors agreed to the Crown “acquiring their interests in land as set out in” the Notices to Take;
2 See Body Corporate 199883 v Clarke Family Associates Ltd (2005) NZCPR 947 at [23] where it was held that, notwithstanding the problem of vote stacking, under the relevant rule of the body corporate (rule 23 in the Second Schedule to the UTA) a person registered as a proprietor has a vote and where there is more than one registered proprietor for a unit, each proprietor has a vote.
c) The proprietors agreed to withdraw their objections to the Notices to
Take.
d)The registered proprietors agreed (subject to some exceptions which are not relevant for present purposes) “not to take any action to prevent or delay the execution of the [proposed works], including in respect of the actions to be taken by the Crown under the PWA and the Unit Titles Act 1972 in respect of the property at 408 Hutt Road”.
[22] In contrast with the agreements reached with the other proprietors, the agreements with the proprietors of Units 1A, 2A and 8 did not appoint the Crown as power of attorney to vote on the necessary resolutions, nor expressly require the proprietors not to unreasonably or unnecessarily withhold consent to other resolutions the Crown considered necessary, nor require support in any action to the Court under s 42.
[23] Following the settlement, the proprietors of Units 1A, 2A and 8 withdrew their objections. On 29 June 2005 the Environment Court delivered a determination. The determination referred to the land to be taken and the subject of the objections as being 1,132 m2 and 39 m2 both being part of Part Lot 1 DP 40307 and as shown as sections 1 and 2 respectively on SO Plan 341776. That is, it referred to the same land as that described in the First Schedule to the Notices to Take and which makes
up the Required Land.
[24] The determination set out the parts of the settlement agreement referred to above at [21] (b), (c) and (d). It also stated:
Accordingly, the objections of the objectors having been withdrawn under s 24(11) of the Public Works Act 1981, the land intended to be taken from the objectors can now be taken by the Minister in accordance with s 26.
[25] On 5 and 20 September 2005, by proclamation pursuant to s 26 of the PWA, the Governor General declared that the estates, interests and other rights described in the proclamations were taken for the public works.
[26] The Crown called for an extraordinary general meeting to vote on the resolutions that had been voted on at the 24 February 2005 meeting. The meeting was held on 23 February 2006. At the meeting the Crown exercised all of its rights to vote in favour of each of the resolutions. The second defendant (who is one of the registered proprietors of Unit 1A), acting as Chairman of the body corporate, refused to accept the votes exercised by the Crown in respect of the proprietors of Units 1A,
2A and 8. The second defendant considered that the rules of the body corporate did not permit the Chairman to accept the votes which the Crown had purported to cast. The proprietors of Units 1A, 2A and 8 abstained from voting on the basis that their votes had been taken from them under the agreements reached with Transit New Zealand. They referred to legal advice that the Crown “does not have the ability to ‘vote’ the vote”. The second defendant declared the resolutions requiring unanimity to have been lost. This then resulted in the application to this Court.
Statutory provisions
The Public Works Act
[27] The PWA provides the Crown, local authorities and authorised utility operators with the power to take land or interests in land that is required for public works. The land may be taken by agreement or, if necessary, compulsion. A regime for the payment of compensation is provided.
[28] The Minister of Lands is empowered to acquire “any land” required for a “Government work” (s 16). The Minister also has the power “to administer, develop, improve, transfer, or dispose of any such property” (s 4A). “Land” is defined as including “any estate or interest in land” (s 2).
[29] The required procedure involves issuing a notice of desire to acquire the land on every person “having a registered interest in the land” and endeavouring to negotiate an agreement (s 18).
[30] Failing agreement, the Minister may proceed to issue a notice of intention to take the land required. Every person having “any estate or interest in the land” to be taken may object to the Environment Court) (s 23(3)). The Environment Court inquires into the objection and for that purpose holds a hearing. So far as is relevant it is required to (s 24(7)):
(a) Ascertain the objectives of the Minister or local authority, as the case may require;
(b) Enquire into the adequacy of the consideration given to alternative sites, routes, or other methods of achieving those objectives;
…
(f) Submit its report and findings to the Minister or local authority, as the case may require.
[31] If no objection is made, or if it is withdrawn or disallowed by the Environment Court, the land may be taken by proclamation issued by the Governor- General (s 26(2)). Fourteen days after the proclamation is published “the land specified in the proclamation” becomes “absolutely vested in fee simple” in the Crown “freed and discharged from all mortgages, charges, claims, estates or interests of whatever kind” (s 26(3)).
[32] Where land is taken “any subsisting licence, permit, right, privilege, or authority in respect of the land” may also be taken by proclamation and the provisions of the Act apply as if the licence, permit, right, privilege or authority “were an interest in land” (s 30). Accordingly, the power to take an estate or interest in land includes a power to take rights which relate to that land. The only land that the Crown is not permitted to take is any part of a road (unless specifically provided otherwise) (s 29).
Unit Titles Act
The nature of the interests
[33] As set out in the long title to the UTA, it is an Act to facilitate the subdivision of land into units (owned by individual proprietors) and common property (owned by the unit proprietors as tenants in common) and to provide for the use and management of the units and common property.
[34] Section 4(2) provides that the deposit of a unit plan creates a “stratum estate”
comprising:
a) A fee simple estate in the unit;
b) An undivided share in the fee simple estate in the common property;
and
c) An undivided share in the fee simple estate in all the units to which the proprietor is contingently entitled by ss 45 and 47 of the Act.
[35] Sections 45 and 47 deal with cancellation of a unit plan on the application of the proprietor (s 45) or following a Court decision (s 47). Upon cancellation the common property and the units vest in the proprietors in the same shares as if the plan had not been cancelled (s 45(5) and s 47(4)(b)).
The management of the interests
[36] The proprietors become a body corporate (s 12). The body corporate is required to “[s]ubject to the provisions of [the UTA], carry out any duties imposed on it by the rules” (s 15(1)(a)).
[37] Section 37 provides:
(1) Except as otherwise provided by this Act, the control, management, administration, use, and enjoyment of the units and the common property shown on a unit plan, and the activities of the body corporate that comprises the proprietors of those units, shall, while there are more proprietors than one, be regulated by the rules for the time being applicable to that body corporate.
(2) Subject to any amendment or repeal thereof or addition thereto the rules applicable to each body corporate shall be those set out in the Second and Third Schedules to this Act.
…
(11) The rules shall be binding on– (a) The body corporate;
(b) All proprietors; and
(c) Any other person in actual occupation of a unit –
And shall enure for the benefit of the body corporate and every proprietor.
…
Transfers of the interests
[38] Section 4(3) concerns transfers and provides (so far as is presently relevant):
Upon the creation of a stratum estate in a unit, that estate may … be transferred, … and any transfer, … shall have the same effect, as if the stratum estate were an estate in fee simple in land or an interest in land… but the fee simple estate … shall not be capable of … being dealt with in any way, and none of the component parts of a stratum estate shall, except as provided in s 9 of this Act, be capable of … being dealt with independently of the others.
[39] Section 9(1) provides that the common property is held by the proprietors of the units as tenants in common in proportion to their unit entitlement. Section 9(3) provides that “[t]he proprietors of all the units may sell … part of the common property”. Section 18 requires the deposit of a new plan in substitution for the existing plan where the whole or part of the common property is being transferred.
[40] The combined effect of s 4(3) and s 9(2) is that a unit holder can sell the whole of their stratum estate as though it were an estate in fee simple in the land. Additionally, unit holders can agree to sell part of the common property.3 Separate sales of the three component parts of the stratum estate held by a unit holder are not otherwise permitted.
[41] In addition to the sale of common property there is provision for land to be added to the common property (s 19(1)) and for a unit to be transferred to common property (s 19(2)). These require the deposit of a new unit plan in substitution for the existing plan (s 19(3)).
[42] There is also provision for redevelopment within the unit plan so as to alter the makeup of the size of the units or the common property. The definition of redevelopment also includes the subdivision by sale of a unit or units (s 2). A redevelopment can occur by an application to the District Land Registrar of a new unit plan in substitution for the existing unit plan (s 44(1)).
Approvals for transfers
[43] Any dealing with the land in the unit plan that affects others with interests in the land requires unanimous approval. This means that of the dealings referred to above ([38] to [42]) the only dealing that does not require unanimous approval is where a unit holder wishes to sell their stratum estate in the unit.
[44] Accordingly s 17 provides:
(1) Any instrument evidencing any transfer, … affecting the common property, or land that is to become part of the common property, may be executed by the body corporate, if the transfer, … has been approved by unanimous resolution of the body corporate.
3 The interest each unit holder has in the common property is one of the three component parts of the stratum estate (see [34](b) above).
[45] Section 19(1) and 19(2) each provide that the transfer of the land (s 19(1)) or the unit (s 19(2)) may be included as part of the common property if the transfer “contains a request by the body corporate that purports to be given pursuant to a unanimous resolution of the body corporate, or a request by the transferees to the Registrar so to do.”
[46] In respect of a redevelopment the plan cannot be deposited unless the application is made by “the sole proprietor of the units, or by the proprietors of all the units pursuant to their unanimous resolution” (s 44(4)).
Voting rights
[47] A unanimous resolution is defined (s 2) (so far as is relevant) as:
(a) A resolution which is passed unanimously at a general meeting of the body corporate at which every proprietor is present and votes either in person or by proxy; or
(b)A resolution which is passed unanimously at a general meeting of the body corporate by every proprietor who is present and votes either in person or by proxy, and agreed to within 28 days after the date of the meeting by every other proprietor who was entitled to be present and vote …
[48] Section 2 defines the “proprietor” of the unit as meaning “the person or persons for the time being registered as proprietor of the stratum estate in the unit”.
[49] Section 41 deals with the exercise of voting rights where a person is less than
18 years (s 41(1)(a)) or who is incompetent to deal with his or her property (s 41(1)(b)). It also makes specific provision for the position of mortgagees (s 41 (2)). It further provides (s 41 (3)):
(3) Where any person by whom a power of voting is exercisable is dead or is out of New Zealand or cannot be found and for that reason or any other reason it is impracticable to obtain the exercise by a person of his power of voting, or where it is not known by what person a power of voting is exercisable, the Court, on the application of the body corporate or of any interested party, may by order–
(a) Appoint some fit and proper person for the purpose of exercising such powers of voting as the Court determines, and thereupon the appointment shall take effect accordingly; or
(b)Declare that any person’s power of voting shall be dispensed with either on a particular occasion or generally, in which case the provisions of this Act or of any rule as to voting shall have effect as if no power of voting were exercisable by that person on the particular occasion or generally, as the case may be.
[50] Section 42 enables an application to the Court when a resolution that requires unanimous approval has not been passed but it has the support of 80% or more of those entitled to vote. It provides:
In any case where, in accordance with this Act or rules under this Act, a unanimous resolution, or the consent, of all the proprietors is necessary before any act may be done and that resolution or consent is not obtained, but the resolution or act is supported by 80 percent or more of those entitled to vote, any person included in the majority in favour of the resolution or act may apply to the Court to have the resolution as supported or the consents as obtained declared sufficient to authorise the particular act proposed; and, if the Court so orders, the resolution shall be deemed to have been passed unanimously or the consent of all the proprietors obtained, as the case may be.
[51] There is also provision for a minority to obtain relief from the Court (s 43).
The rules of the body corporate
[52] In the present case the relevant rules are contained in the second schedule to the UTA. Rule 23 provides:
Subject to the provisions of s 41 of the Unit Titles Act 1972, at any general meeting of the body corporate–
(a) Where a unanimous resolution is required each person who is a proprietor shall be entitled to exercise 1 vote:
(b) In all other cases 1 vote only shall be exercised in respect of each principal unit, and no separate vote may be exercised in respect of any accessory unit.
The second defendant’s position
[53] The second defendant contended that the rules of the body corporate are binding on the proprietors and the body corporate (s 37(11)). Those rules govern the way in which votes can be exercised. Rule 23 means that it is only “proprietors” that are able to vote on a resolution. A proprietor is a person that is registered as proprietor “of the stratum estate in the unit”. The stratum estate is comprised of the three component interests specified in s 4(3) which cannot be dealt with separately. The right to vote on resolutions is not one of those three component interests. The right to vote is a statutory right attaching to and indivisible from ownership of the principal unit.
[54] In this case the Crown is the proprietor of Units 3, 4, 5, 6 and 7 but not of any of the other units. In the absence of a proxy or power of attorney from the registered proprietors of the other units the Crown had no power to exercise the votes of the other unit holders. The second defendant said that the Crown appears to have obtained proxies or powers of attorney from the proprietors of the other units with the exception of Units 1A, 2A and 8. The second defendant contended that the Crown could have, but did not, obtain a power of attorney or proxy from the proprietors of Units 1A, 2A and 8. The settlement agreements did not require the proprietors to vote on behalf of the Crown. The settlement agreements did not require that the proprietors take positive action to enable the resolutions to be passed.
[55] Instead the Crown purported to purchase the interests of the proprietors of Unit 1A, 2A and 8 to vote in favour of the resolutions. It then called the meeting and purported to exercise that vote. Having done so, the Chairman could not accept the votes that the Crown purported to exercise on behalf of Units 1A, 2A and 8. That would be inconsistent with rule 23 of the body corporate rules. Further, the proprietors could not have exercised votes in respect of the resolutions as they transferred those rights to the Crown under the settlement agreements.
[56] The second defendant is therefore contending that rights that could not be exercised by the Crown were transferred to the Crown under the settlement agreements. The purported exercise of those rights by the Crown is invalid and there is nothing that the proprietors can do or are required to do. The second defendant said that it was made “abundantly clear” to Transit New Zealand that the vote was unable to be exercised otherwise than in conjunction with the “Principal Unit” [ie the stratum estate in Units 1A, 2A and 8]. The second defendant said that Transit New Zealand and its lawyers chose to ignore this when they prepared the settlement agreement.
The plaintiffs’ position
[57] The plaintiffs submitted that a unit can be removed from a unit plan by cancellation of the unit plan, by redevelopment, or by transferring the unit to common property (pursuant to s 19(2) of the UTA) and by then transferring the common property out of the unit plan (as permitted by s 9(2) and pursuant to ss 17 and 18 of the UTA). Both the transfer of the unit to common property and the transfer out of the unit plan require unanimous resolutions of the body corporate. The Crown has entered into agreements to achieve these transfers and was empowered to do so under the PWA.
[58] The plaintiffs submitted, however, that the powers exercised under the PWA were inconsistent with the UTA in two respects: first, the agreements entered into involved a dealing with a component part of the stratum estate held by the unit holders (in breach of s 4(3)); secondly, although the Crown has acquired the right to vote on the transfers, under the UTA it is only the proprietors of the units that have the vote (s 2).
[59] The plaintiff submitted that the PWA and UTA can be interpreted consistently because the UTA does not bind the Crown. Alternatively, if the UTA
does apply to the Crown, it says that the principle of implied repeal applies. It also relies on other grounds that, if upheld, would enable it to obtain the Required Land.
Power under PWA to acquire rights and interests
[60] I start my discussion of the issues by examining the rights and interests acquired by the Crown and the power to acquire those interests under the PWA.
What was acquired?
[61] All proprietors of the Units held an interest in Units 4 and 6 and the relevant accessory units to the extent of their contingent interests under ss 45 and 47 of the Act. That contingent interest was acquired under the agreements entered into with the proprietors of the Units other than Units 1A, 2A and 8. It was also part of what was taken by proclamation pursuant to the settlement with the proprietors of Units
1A, 2A and 8.
[62] If the UTA was to be complied with, before Units 4 and 6 and the accessory units could be transferred out of the Unit Plan, they first needed to become common property. Then all the Required Land could be transferred out of the plan as common property. The proprietors held an interest in all the common property. Transfers affecting common property required unanimous approval of all proprietors. The Crown obtained from the proprietors other than Units 1A, 2A and 8 a power of attorney in respect of the resolutions which would achieve the transfers.
[63] Pursuant to the settlement with the registered proprietors of units 1A, 2A and
8, the Crown acquired their interest in the common property required by the Crown. The Crown also acquired “all other rights with respect to the Crown-owned Units [i.e. Units 4 and 6 and the relevant accessory units], including your interest as registered proprietors of Unit [1A, 2A and 8] to vote in favour of [the resolutions] and/or such other rights or actions to give effect to the [resolutions]”.
Powers under PWA
[64] By ss 2 and 16 of the PWA the Crown was able to purchase the contingent interest held by all the proprietors in Units 4 and 6 and the relevant accessory units. That interest is an “interest in land”.4 Similarly, by ss 2 and 16 of the PWA the Crown was able to acquire the interests held by the proprietors of Units 1A, 2A and
8 in the common property required by the Crown. That too was an “interest in land”.
[65] The proprietors’ interests in the land acquired by the Crown did not carry with it the right to vote on the transfers that needed to be made. Under the UTA that right continued to subsist with each person who is a proprietor. If the provisions of the UTA applied to the Crown it was therefore also necessary to obtain that right in some way or secure the agreement of the proprietors to exercise their vote in a way that would achieve the transfers.
[66] In the case of the proprietors of Units 1A, 2A and 8 the Crown acquired the proprietors “interest to vote in favour of resolutions”. I consider that the right of proprietors to vote on resolutions was, for the purposes of s 30 of the PWA, a right that subsisted in land to be taken.5 The right to vote on resolutions was a right that belonged to proprietors of all units because of their ownership (which ownership comprised the three component parts of the stratum estate) of a unit. The right to
vote on resolutions subsisted partly in the land to be taken (in which contingent interests and undivided shares in fee simple were held) and partly in the balance of the stratum estate that was retained by the proprietors of Units 1A, 2A and 8. The effect of a purchase of part only of the interest held by the proprietor under the UTA is a separate question.
4 There is no issue that the acquisitions were for a Government work.
5 The Crown submitted that the right to vote was either part of the estate or interest in land (since an estate or interest in land is no more nor less than a bundle of rights that may be exercised in respect of a piece of land) or a subsisting right under s 30. It seems to me to more naturally be a “right” under s
30 than an estate or interest under s 2.
[67] I therefore consider that the Crown had the power under the PWA to acquire the rights and interests which it did. The next question is whether the acquisitions were inconsistent with the UTA.
Is the PWA inconsistent with the UTA?
Acquiring part only of the interests held by a proprietor
[68] There is no suggestion that the acquisition of Units 4 and 6 and the relevant accessory units conflicted in any way with the UTA. The issue is whether acquiring from all the proprietors their contingent interests held in Units 4 and 6 and the relevant accessory units was an independent dealing with a component part of the stratum estate in conflict with s 4(3) of the UTA.
[69] The plaintiffs conceded that there was a dealing in conflict with s 4(3) of the UTA. I am not so sure about that. Section 19 contemplates that units may become common property. To become common property there will be a dealing of the proprietors’ contingent interests in the units to be transferred. To that extent there is a dealing with a component of the stratum estate separately from the other components. It is permitted under s 19(2) if there is unanimous approval from the proprietors.
[70] In the absence of a prohibition under s 4(3) on dealing with component parts of the stratum estate held by each unit holder, there could be three different owners of those component parts. Presumably that is seen as giving rise to complications that are to be avoided. That is not the position that arises from the present dealing.
[71] Once the land was removed from the Unit Plan each proprietor retained their three components of their stratum estate. That is, they retained their fee simple estate in the unit, their undivided share in the fee simple estate of the remaining common property and their undivided share in the fee simple of all the remaining units to which they were contingently entitled. What had changed was that the common property was now smaller as was the total land in which the contingent
interest was held. Under the UTA that could only occur with the approval of all the proprietors.
[72] It therefore seems to me that the prohibition on dealing in component parts should be read subject to the ability of units to be transferred to common property and for common property to be transferred out of the Unit Plan. This is permitted provided unanimous resolutions are passed (or if resolutions are passed by a majority of 80% or more and court approval under s 42 is obtained).
[73] However, if I am wrong about this, then I accept the plaintiffs’ position that the prohibition in s 4(3) is inconsistent with the power under the PWA to acquire “any interest” in land.
Conflict with the rules of the body corporate?
[74] The Act requires that the Chairman comply with the rules of the body corporate. The rules provide that each proprietor vote. In this case the Crown purported to cast the votes that, pursuant to the rules of the body corporate, were vested in the proprietors of Units 1A, 2A and 8. That was inconsistent with the rules of the body corporate.
[75] Although at the meeting on 23 February 2006 the minutes record the Crown as stating that it was the proxy for Units 1A, 2A and 8, the plaintiffs did not seek to submit before me that the Crown was the proxy for those proprietors. Nor did the plaintiffs submit that under the settlement agreements it was able to require the proprietors to exercise their votes in the Crown’s favour. Nor was it submitted that the Crown could require the proprietors to execute a power of attorney in the Crown’s favour.
[76] These positions might have been open to argument when the settlement agreements are read in context. I do not reach a conclusion on this because that is
not the basis on which the plaintiffs have put their case, and if it had been the basis, all the parties to those settlement agreements may have wished to have been heard. I accept the plaintiffs’ submission that under the PWA the right to vote on resolutions was a right that could be acquired. Implicit in that is that the right could be exercised by the Crown. That conflicts with the requirement in the UTA that the rules of the body corporate must be complied with where those rules require that it is the proprietors that must exercise the right to vote on resolutions.
Is the Crown bound by the UTA?
[77] The plaintiffs submitted that the provisions of an enactment bind the Crown only to the extent that it is manifest from the terms of the statute that the legislature intended that the Crown should be bound.6 The plaintiffs submitted that it was not manifest that it was intended that the Crown was bound by s 2 (vote must be by proprietor) or s 4(3) of the UTA.
[78] The principle on which the plaintiffs rely is well established. It will manifest that the Crown is bound only if the enactment expressly states so or the Crown is bound by necessary implication. A necessary implication can arise where the purpose of an enactment is frustrated if the Crown is not bound7 or if the subject matter renders it unthinkable that the Crown is not bound.8
[79] As was said in World Vision of New Zealand Trust Board v Seal [2004] 1
NZLR 673 at [51] one of the principles underpinning the UTA is:
The need to synthesise the conflicting views, needs and desires of proprietors who have different interests through the adoption of a democratic model. That model is designed to enable proprietors to make collective
6 The plaintiff relied on s 27 of the Interpretation Act 1999; Rankin v Attorney-General in respect of the State Services Commissioner [2001] ERNZ 412, 419-420; Re Buckingham [1922] NZLR 771; Province of Bombay v Municipal Corporation of Bombay [1947] AC 58, 61; Re Silver Brothers Ltd [1932] AC 514, 523; and R v Pora [2001] 2 NZLR 37, 63 (CA).
7 See e.g. Province of Bombay at 63.
8 See e.g. Rankin v Attorney-General in respect of the State Services Commissioner [2001] ERNZ 412 at [26].
decisions (through the body corporate) about the use of common property and proposals to make structural changes or additions to the property likely to affect the use, enjoyment or value of units owned by other proprietors.
[80] Whether it would be unthinkable that the Crown is not bound by the UTA might depend on the context in which the UTA might have application. For example, the Crown might purchase a unit under a unit plan (not pursuant to its PWA powers) and with the intention of occupying the unit (rather than removing it from the unit plan). In this circumstances the “democratic model” referred to in Seal would be interfered with if the Crown were not bound by the UTA. This could lead to unfairness to the interests of the other unit title holders in the unit plan and could render the management of the interests of the proprietors unworkable.
[81] The position is different when an acquisition is made under the PWA. The PWA provides wide powers of acquisition. It is a draconian power. Its exercise should not be limited by the UTA provisions which are in place for different purposes.
[82] If, because of the prohibition in s 4(3), the Crown cannot acquire only those units under a unit plan that it actually requires then the Crown would have to acquire the whole of the land that is subject to the unit plan. I agree with the plaintiffs’ submission that it cannot have been the intention that the Crown must acquire the whole of the land when only a portion of it is needed. That seems to interfere unnecessarily into private rights of ownership.9 Further, if appropriate compensation is payable to the remaining unit holders, and if the unit holders retain the three component interests in their stratum estate over the remaining land, it is difficult to see why it should be necessary to require the Crown to purchase all the land in the
Unit Plan.
9 The plaintiffs referred to Quinlan v Mayor etc of Wellington [1929] NZLR 491, at 494 (where the local authority accepted that under a predecessor to the PWA there was no power to take a larger area of land than was reasonably required for the public work) and Deane v Attorney-General [1997] 2
NZLR 180, 191 (which referred to the draconian nature of the power).
[83] The voting provisions (under the democratic model of the UTA) ensure that transfers that affect all the unit holders will only occur if all are agreed to it. That is inconsistent with the powers under the PWA to take (subject to the requirement to pay compensation) regardless of agreement.
[84] In my view there is nothing in the UTA that manifests an intention that the Crown is bound by its provisions when exercising its PWA powers except where the UTA expressly provides otherwise.10 The same conclusion is reached whether this is seen as an application of the principle that the Crown is not bound by the enactment because it is not manifest that it should be bound in this context or whether the PWA is considered to modify the terms of the UTA in relation to the Crown. The latter is
the next ground I consider.
Implied repeal
[85] The plaintiffs submitted that the PWA impliedly repeals or modifies the UTA to the extent of the inconsistency between them.11 The plaintiffs relied on four points in support of this submission.
[86] First, the PWA is later in time.
[87] Secondly the PWA is specific and the UTA is general. In support of this point it was submitted that the PWA is specific because ss 16(1), 30 and 31 of the PWA expressly empowers the Crown to acquire and exercise only the part(s) of the stratum estate in a unit title that the Crown in fact requires for the relevant public work.12 It was submitted that this modifies the general prohibition on dealings in
10 See s 18(5) of the UTA referred to at [89] below.
11 Counsel referred to R v Pora [2001] 2 NZLR 37, 63 and 64; Kutner v Phillips [1891] 2 QB 267,
271-272; Stewart v Grey County Council [1978] 2 NZLR 577.
12 I would not describe the sections in these ways. Section 16(1) empowers the Crown to acquire land required for a Government work. Implicit in this is that there is no power to acquire land that is not required. Section 30 empowers the acquisition of other rights that subsist in the land to be taken. Section 31 empowers the Crown to take only the surface, subsoil or airspace it deems necessary. Implicit in this is that it should not take what is not necessary.
component parts of the stratum estate in s 4(3). Similarly it was submitted that the powers under ss 16(1), 30 and 31 of the PWA modify the general provisions of the UTA which require unanimous resolutions of the proprietors.
[88] Thirdly, s 18(5) of the UTA provides that where common property is taken by proclamation, if the body corporate so requests, the Chief Surveyor must prepare the new unit plan required by s 18(1) “at the expense of the Crown”. It was submitted that this was an acknowledgement by Parliament that the Crown will, at times take by proclamation only part(s) of the stratum estate held by proprietors (namely the rights and interests of each proprietor in the relevant common property).
[89] Fourthly, the plaintiffs referred to the principle13 that the working of legislation should be practical, just and sensible.
[90] The first point is correct. The second point may be correct14, although as counsel acknowledged in his submissions, an argument may be made that the UTA is specific (because it relates only to unit titled property) and the PWA is general (because it relates to all land to be acquired for public works). It might also be argued that both are general or both are specific. As to the third point, the UTA already permits a dealing in a component part in relation to the transfer of common property. Section 18(5) is an acknowledgement that the Crown may take common property from a unit plan and if it does it can be required to pay for the new plan. It is silent on whether the Crown can take some only of all the units in a unit plan that are not common property. The fourth point is correct (although the cases relied on by the plaintiffs were not concerned with interpreting a statute in light of a later inconsistent statute).
13 The plaintiffs referred to Holmes v Bradfield Rural District Council [1949] 2 K B 1, 7-8; and
Director-General of Education v Morrison [1985] 2 NZLR 430, 435 in support of this principle.
14 I note that in Stewart v Grey County Council at 583 it was said “there may be difficulties in some cases in determining which statute is special. There are some situations in which ‘each enactment may be called general or special according to the point of view from which it is regarded’ (Butler v Attorney-General for Victoria (1961) 106 CLR 268, 280)”.
[91] Rather than analyse the legislation by whether it is general or specific, I consider it is preferable to consider the purpose and scope of each of the UTA and the PWA. The PWA gives the Crown very broad powers to take whatever land (and rights and interests) needed for public works. Compensation is payable to affected parties. There is nothing in the PWA, which is later in time, to suggest that the Crown’s broad (and draconian) powers are subject to the provisions under the UTA that are intended to protect proprietors’ interests as between each other under a unit plan except where the UTA specifically provides otherwise.
[92] In this case the Crown endeavoured to comply with the UTA by acquiring rights that were needed to effect the transfers. However, I consider that it did not need to acquire the right to vote on resolutions to effect the transfer. The PWA modifies the UTA by enabling the Crown to acquire the stratum estates (or part of those estates) it needs for public works. The acquisition does not then need the proprietors to vote on the transfers. A new unit plan will be required and the cost of this is met by the Crown if the body corporate requires it.
Other grounds raised by the plaintiffs
[93] Because I consider that unanimous resolutions did not need to be passed it is not necessary for me to decide the other grounds relied on by the plaintiffs. However, as they were the subject of submission before me, I provide my views on them.
Res judicata
[94] Prior to the first defendant filing its memorandum advising that it abided the decision of the Court, both the first and second defendants filed statements of defence. In each of those defences the defendants asserted that voting rights are enjoyed only by a registered proprietor of a Unit. At the hearing before me the
second defendant advised that he too abided the decision of the Court but wished to explain why he, as Chairman, had taken the position he had at the meeting.
[95] The plaintiffs submitted that the position taken in the defences was not open to the defendants because the relevant matters are res judicata. The plaintiffs referred to the principle as set out in Shiels v Blakeley [1986] 2 NZLR 262 at 266 which states as follows:
This is a plea of estoppel per rem judicatam. The rule is, so far as material to the present case, that where a final judicial decision has been pronounced by a New Zealand judicial tribunal of competent jurisdiction over the parties to, and the subject-matter of, the litigation, any party or privy to such litigation, as against any other party or privy thereto, is estopped in any subsequent litigation from disputing or questioning the decision on the merits… While in the case of what is commonly called issue estoppel a particular matter of fact or law in issue in the second proceeding is held to have been decided by the prior judgment but may or may not be determinative of the second proceeding.
[96] The plaintiffs submitted that this principle applies to final determinations made by consent15 and that the Environment Court determination is a judgment in rem.16
[97] The issue before me is whether the Chairman was wrong in law to reject the Crown’s voting in respect of the votes that related to Units 1A, 2A and 8. That issue depends on what the Crown acquired and whether that acquisition overrode the rules of the body corporate providing that the proprietors of the units had the right to vote.
[98] I consider that this issue was not determined by the Environment Court. The Environment Court’s determination was to declare that “the land intended to be taken … can now be taken”. The determination enabled the proclamations to
15 The plaintiffs referred to Gay v Bruns [2003] NZAR 547 and MacPherson v McCaffery [1968] NZLR 489 in support of this point.
16 The plaintiffs referred to Lazarus-Barlow v Regent Estates Co Ltd [1949] 2 KB 465,475 that a judgment in rem is “a judgment of a court of competent jurisdiction determining the status of a person or thing, or the disposition of a thing (as distinct from the particular interest in it of a party to the litigation)”.
proceed but did not determine whether “the right to vote” that was to be taken by proclamation overrode the rules of the body corporate.
Abuse of process
[99] The plaintiffs submitted that the defences raised by the defendants were an abuse of process.17 It was submitted that it would be manifestly unjust and contrary to the administration of justice if, despite the Environment Court’s determination that the land could be taken, the defendants were permitted to deny that the Crown could not take the rights it has taken and could not lawfully exercise those rights.
[100] Although the defendants initially filed defences their formal position is now that they abide the decision of the Court. If there is an abuse of process it seems to me that it is not so much in the position that has been taken in this litigation but rather because of the conduct of the proprietors of Units 1A, 2A and 8 and the Chairman at the meeting on 23 February 2006 in light of the Environment Court process. This point was not argued before me in this way. Given the other conclusions that I have reached it is not necessary for me to consider it further.
Estoppel
[101] The plaintiffs submitted that the second defendant was estopped from asserting his defence in this proceeding. The plaintiffs submitted that by agreeing to the Crown acquiring the interests in the Notices to Take, and by agreeing to withdraw their objections, the second defendant gave an unequivocal promise that the rights could be taken and exercised. The plaintiffs submitted that the Crown relied on that promise and has now suffered detriment in the form of significant costs and delay to its works.
17 Counsel referred to New Zealand Social Credit Political League Inc v O’Brien [1984] 1 NZLR 84,
89-90, 95 and 90 in support of this submission.
[102] The second defendant’s response is that in refusing to accept the Crown’s votes he was acting as Chairman and not a proprietor and that the agreements were with the proprietors. The second defendant also says that it was made abundantly clear during the negotiations that the vote would not be able to be exercised. I do not have the detail of those negotiations to make an assessment of that. Arguably this ground might better be considered against the proprietors rather than the second defendant or as a possible breach of contract by the proprietors of Units 1A, 2A and
8. It was not argued before me in this way (and if it had been it may have been that the parties to the settlement agreements would have wished to have been heard). As with the abuse of process ground, it is not necessary for me to decide this issue and I do not do so.
Relief under s 42 of the UTA
[103] The plaintiffs submitted that they should be entitled to seek an order under s
42 of the UTA. The plaintiffs acknowledged, however, that on the basis of Body Corporate 199883 v Clarke Family Associates Ltd (2005) 5 NZCPR 94718, such relief is not available to it. This is because of the actions of the original proprietors of Unit 1A in adding three further names to that unit (see [19] above). This meant that the Crown obtained 74% of the total voting entitlements (there being a total of
31 proprietors registered in respect of all the Units and a total of eight proprietors in respect of Units 1A, 2A and 8). Given the plaintiffs’ acknowledgement and my earlier findings I do not consider further whether relief can be obtained under s 42.
Relief under s 41 of the UTA
[104] The plaintiff submitted that, in terms of s 41(3) of the UTA, it was “impracticable to obtain the exercise by a person of his power of voting”. It was submitted that the scope of s 41(3) is broad and covers “any other reason” that makes
18 Refer footnote 2.
it impracticable to obtain the vote of a person. It was submitted that any vote by the proprietors other than a vote in favour of the required resolutions would breach the Environment Court determination, the settlement agreements and would be an abuse of process. In these circumstances the plaintiffs sought a declaration under s 41(3) that the votes of the proprietors of Units 1A, 2A and 8 be dispensed with.
[105] I have found that the Crown did not need to comply with the provisions of the UTA by effecting the necessary transfers pursuant to unanimous resolutions of the proprietors. Given that the Crown endeavoured nevertheless to comply with the UTA, and has already called two meetings for the purpose of passing the resolutions, I consider relief is available to it under s 41. I consider that it is impracticable for a further meeting to be called to enable the proprietors of Units 1A, 2A and 8 to vote in favour of the resolutions given their view, that they no longer have the right to exercise a vote. I do not accept the second defendant’s submission that the proprietors of Units 1A, 2A and 8 need to be heard on this issue – through the body corporate they have elected to abide the decision of the Court. I declare that for the purposes of the required unanimous resolutions their votes are dispensed with and the resolutions have therefore been passed unanimously.
Costs
[106] The usual rule is that a successful party is entitled to its costs against an unsuccessful party. The plaintiffs have reached an agreement with the first defendant that costs will not be sought against it. The plaintiffs seek costs against the second defendant on an indemnity basis on the basis that his actions have caused considerable cost and delay.
[107] The second defendant’s position was that he was required to uphold the rules of the body corporate or he was at risk of liability to the proprietors. I note that the legal advice received, as disclosed to me, stated only that “there is an argument that they did not have the right to exercise that vote and further do not have the 80%
majority for which they would qualify for relief under the Act.” I note also that there was no evidence that the Chairman had made enquiries of the proprietors to determine if this risk was a real one.
[108] The plaintiffs’ submissions on costs have not addressed whether there is any distinction to be drawn between the actions of the second defendant as Chairman at the meeting on 23 February 2006 and the actions of the proprietors of Units 1A, 2A and 8. Further, the plaintiffs have not addressed whether any costs order should take into account that the issues were of general importance to the Crown and therefore have benefit to it beyond the particular circumstances of this case.
[109] Therefore, if the Crown wishes to pursue its claim for costs I invite memoranda from the plaintiffs and the second defendant within 30 days of the date of this judgment.
Result
[110] Accordingly I find that:
a) When exercising its powers under the PWA the Crown could acquire component parts of interests held by the unit holders and did not need to comply with the provisions of the UTA that require unanimous approval of the proprietors to the transfers that would effect the removal of the required land from the Unit Plan.
b)The Crown chose to seek to comply with the UTA by endeavouring to have unanimous resolutions passed. In the circumstances I also grant the relief sought under s 41 of the UTA and declare that the power of the proprietors of Units 1A, 2A and 8 to vote on the resolutions that were before the meeting on 23 February 2006 is dispensed with.
c) If the plaintiffs wish to pursue its claim for costs against the second defendant memorandum from the plaintiffs and the second defendant are to be submitted to me within 30 days of the date of this judgment.
Mallon J
ATTORNEY GENERAL AND ANOR V BODY CORPORATE NO. 68792 AND ANOR HC WN CIV: 2006-
485-1341 29 March 2007
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