Body Corporate 117502

[2025] NZHC 1859

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2025-441-18

[2025] NZHC 1859

IN THE MATTER	of the Unit Titles Act 2010
AND
IN THE MATTER	of an application by Body Corporate 117502

Hearing:	On the papers
Appearances:	A L Barnett for Applicant
Judgment:	9 July 2025

JUDGMENT OF McHERRON J

[1]        The Body Corporate for the Bishop Selwyn holiday resort in Piha seeks cancellation of the unit plan associated with the resort, to allow its sale.

[2]        For the reasons set out below, I make a declaration authorising the cancellation of the unit plan, on the conditions set out at the end of this judgment. However, it will be for the Registrar to consider whether the plan can be cancelled under s 189 of the Unit Titles Act 2010.

Body Corporate’s process

[3]        On 28 May 2023, the Body Corporate held an annual general meeting at which future options for the Bishop Selwyn were discussed. Arising from that AGM was a direction to survey unit owners. In the survey, 59.7 per cent of the 263 owners that responded voted “yes” to a windup of the timeshare scheme and sale of the property. Of those, 46.39 per cent requested a time frame of one to two years.

RE BODY CORPORATE 117502 [2025] NZHC 1859 [9 JULY 2025]

[4]        Following the survey, on 26 March 2024 an extraordinary general meeting of timeshare unit owners was called. A special resolution is required in order to cancel the unit plan.1

[5]        Unit owners were directed to send their postal and proxy voting papers for the 2024 extraordinary general meeting to the Body Corporate’s solicitors by post or email. A total of 408 postal votes were received, of which 369 were in favour of the motion and 39 against. 47 proxy votes were also received from unit owners.

[6]        On 19 May 2024, the 2024 extraordinary general meeting was held, chaired by Body Corporate Chairperson Geoffrey Ward. The result of the vote was as follows:

In favour	Against	Total eligible votes
461	95	556

[7]        Accordingly, 83 per cent of eligible voters voted in favour of the motion to cancel the unit plan.

[8]The special resolution authorised:

(a)the sale of the property;

(b)the cancellation of the unit plan; and

(c)Mr Ward to sign the documents needed to effect a sale and the transfer of the land and buildings underlying the unit plan to a purchaser.

[9]        On 18 June 2024, a notice of designated resolution, plus the minutes from the 2024 extraordinary general meeting were sent to unit owners.2

1      Unit Titles Act 2010, s 187(1)(a).

2      In accordance with s 213 of the Unit Titles Act.

Applicable law

[10]      Section 187 of the Unit Titles Act governs an application to the Court for cancellation:

187Application to High Court for order of cancellation of unit plan

(1)Any 1 or more of the following persons may apply to the High Court for the cancellation of the unit plan:

(a)      the body corporate for the unit title development to which the unit plan relates, after a special resolution to do so; or

(b)      an administrator; or

(c)      1 or more unit owners.

(2)The applicant must serve a notice of any application made under subsection (1) on—

(a)      every unit owner; and

(b)      if a principal unit in the unit title development is a subsidiary unit title development, the body corporate of that subsidiary unit title development; and

(c)      if the unit title development is a subsidiary unit title development, the body corporate of its parent unit title development; and

(d)      any person having an interest in any easement or covenant of a kind referred to in section 60 or 62; and

(e)      every other person who has a registered interest in, or caveat or notice of claim entered on the register over, any unit, the common property, or the base land; and

(f)      any insurer who has effected insurance on the buildings or other improvements comprised in any unit or on the base land or any part of the base land; and

(g)      the Registrar.

(3)The Registrar must enter on the supplementary record sheet a notification that the application has been made.

(4)Any notification entered under subsection (3) must be cancelled by the Registrar if the applicant lodges a notice in the prescribed form with the Registrar that—

(a)      the application to the High Court is not proceeding; or

(b)      the High Court has refused to make the declaration sought.

[11]      The Body Corporate is the applicant by virtue of a special resolution (75 per cent).3 Service of the notice of application has been effected on all of the parties listed and for certain missing owners (for whom the Body Corporate has no current address or contact details, according to the order that was obtained for directions as to service).4

[12]      The Registrar, having been served with the notice of application has entered on the supplementary record sheet a notification that the application has been made.5

[13]      Authorisation of the cancellation of the unit plan by the High Court is provided for in s 188 of the Unit Titles Act:

188Cancellation of unit plan by High Court

(1)The persons described in paragraphs (a) to (f) of section 187(2) have the right to appear and be heard.

(2)The High Court may authorise that the unit plan be cancelled if—

(a)      the High Court is satisfied that it is just and equitable that the body corporate be dissolved and the plan cancelled having regard to—

(i)the rights and interests of any creditor of the body corporate; and

(ii)the rights and interests of every person who has any interest in any unit or in the base land or in any part of the base land; and

(b)      no principal unit in the unit title development to which the plan relates contains a subsidiary unit title development.

(3)If the High Court makes a declaration authorising the cancellation of a unit plan under subsection (2), the High Court may by order impose any conditions and give any directions as it thinks fit, for the purpose of giving effect to the declaration, including—

(a)      directions for the payment of money by or to the body corporate; or

(b)      the distribution of the assets of the body corporate; or

(c)      a direction to modify or extinguish, in whole or in part, any registered interest or caveat or notice of claim entered on the

3      Unit Titles Act, ss 187(1)(a), 98(4).

4      Section 187(2).

5      Section 187(3).

register in relation to any unit, the common property, or the base land.

(4)The High Court may, at any time before the unit plan is cancelled under section 189, vary or modify the terms of any declaration or order made by it under this section.

(5)The High Court may make any order for payment of costs as it thinks fit.

[14]      None of the persons described in s 187(2)(a) to (f) have indicated a wish to appear and be heard. For the purposes of s 188(2)(a)(i) Mr Ward’s affidavit confirms there are no creditors beyond ordinary outgoings. Nor is there a principal unit which contains a subsidiary unit title development. Accordingly, counsel for the Body Corporate submit there are no rights or interests to consider beyond those of the unit owners.

[15]      The Court must determine whether it is just and equitable that the Body Corporate be dissolved and the plan cancelled having regard to the rights and interest of the unit owners. The Unit Titles Act gives no definition of the words “just and equitable”.6 In World Vision of New Zealand Trust Board v Seal, Heath J reviewed the use of the phrase “just and equitable” in various statutory contexts and held that an onus lay on the plaintiff to prove that cancellation of the unit plan and dissolution of the Body Corporate was just and equitable.7 Heath J referred to the need to:

Balance all the conflicting claims, giving proper weight to each consideration of right, duty and fairness brought forward by the parties.

[16]      Various other cases are referred to in counsel’s submissions. Each of them turns on their own facts. I have therefore focused on the particular context of this application rather than other cases.

[17]      In the present case it appears there is no current active opposition to the proposal to cancel the unit plan. Nor did those unit owners who have voted against the proposal give any reasons.

6      There was no definition in the previous Act, the Unit Titles Act 1972, in the predecessor section, s 46(1).

7      World Vision of New Zealand Trust Board v Seal [2004] 1 NZLR 673 at [64].

[18]      The reasons in favour of a sale are set out in Mr Ward’s affidavit at paras [15] and [16], which have been summarised by counsel as follows:

Many timeshare unit owners have formed the view that the annual costs of retaining their timeshare weeks do not provide sufficient value, or they no longer have a need for their timeshare holiday accommodation.

Many timeshare unit owners no longer have a need for their timeshare accommodation, with around 17 per cent of the survey respondents having last stayed at the Bishop Selwyn two to three years ago and 24 per cent at least four years ago.

Timeshare unit owners looking to sell their interests have found there is no market for timeshare interests, and where sales do take place, the vendor is unlikely to receive much, if anything (as general practice is that the vendor pays the purchaser’s solicitors’ costs).

[19]      The application envisages that a share of the proceeds will be allocated to each owner according to their respective interests in the unit plan, as determined by a registered valuer. This share will be subject, however, to set-off on account of outstanding dues and/or levies.

[20]      The notice of designated resolution specifies securing an agreement for the sale of the Bishop Selwyn at a purchase price of not less than 90 per cent of its current market value. The applicant proposes that a registered valuer be engaged to determine the current market value. A valuation report dated 19 July 2024 was obtained by the Body Corporate. In that valuation, the valuer gives his opinion of the Bishop Selwyn’s current market value assuming disestablishment of the Body Corporate structures. The valuer then apportions that value between each of the units.

[21]      These valuations will be used to determine the relative interests on a percentage basis for each unit, which will then be used to calculate the distribution of the sales proceeds after the costs of the sale have been paid.

[22]      Mr Ward has confirmed to counsel that the Body Corporate has recently engaged the same valuer to ascertain whether any change or new information has arisen since the 19 July 2024 report that would result in a change to his assessment of the current market value of the Bishop Selwyn and/or his apportionment of that value between each of the units. Counsel propose to provide any updates to the valuation

report. However, they note that any updated report would not affect the orders and directions currently sought from the Court.

The order

[23]      Under s 188(3) of the Act, the Court may impose any conditions and directions it sees fit to give effect to the orders made. The form of order sought by the applicant includes conditions to facilitate a sale, and in the distribution of Body Corporate assets after allowance for unpaid dues and the usual costs associated with a sale and the cancellation process.8

[24]      The handling of the proceeds of sale proposed by the Body Corporate in circumstances in which some owners’ whereabouts are unknown is the only practical way in which supervision is available to protect the interests of all unit owners. That is because the Registrar does not take any interest in matters to do with sale, accounting and payments. In order to provide assurance that there is proper accounting the Court will require an account to be lodged as provided in my orders below.

Costs

[25]      The orders sought cover legal costs in respect of the application and on account of the sale.

[26]      Once the order is made, the Registrar will proceed under s 189 of the Unit Titles Act to implement the cancellation. Section 189(5) provides that ss 184–185 apply to effect the payment out of monies including after settlement.9 It is envisaged that there may be a need to value unit owner interests differentially according to their market value, and that has been anticipated in the orders I make below.

8      The same conditions and directions were approved in the following cases: Re Body Corporate 44425 [2015] NZHC 3284; Re Body Corporate 46051 [2019] NZHC 922 and Re Body Corporate 39826 [2022] NZHC 2518.

9      Unit Titles Act, s 185(2)(b).

Conclusion

[27]      I am satisfied based on the comprehensive material supplied to the Court on behalf of the Body Corporate that this is an appropriate case for the exercise of the Court’s discretion on just and equitable grounds to make orders authorising the cancellation of the unit plan. In accordance with the draft order supplied to the Court, as reflected in my orders below, I approve the cancellation of the unit plan to enable a sale of the whole property as a fee-simple to a purchaser for value.

Orders

[28]I make the following orders:

(a)Authorising the cancellation of Unit Plan 117502 in respect of all Unit Titles set out in Supplementary Record Sheet NA66D/518, North Auckland, 26 Selwyn Road, Paihia, and all leases registered over such titles.

(b)The following conditions and directions apply:

(i)Pursuant to s 189(5)(b) a new and unencumbered title for the fee simple estate in the base land is to be vested in the Chairperson of the Applicant, Geoffrey Wayne Ward, on behalf of the owners of all of the units. Mr Ward is authorised as agent for the owners and Body Corporate, to sign all agreements and documents of transfer necessary to conclude settlement of sale of the property and transfer to the purchaser. The proceeds of sale must be held in the trust account of Sainsbury Logan and Williams, of Napier for the purpose of distribution to the unit owners.

(ii)Pending settlement of the sale, the Body Corporate must continue to manage the property and use the monies available from time to time for that purpose, including in payment of the legal costs and disbursements of and incidental to this

application, provided that any shortfall may be paid out of the sale proceeds.

(iii)The net sale proceeds (after payment of all real estate agents’ charges, legal costs and apportionments) and any other assets of the Body Corporate must be distributed to and/or paid to the unit owners in accordance with their ownership interest as fixed by a registered valuer less such amount as is owed by them by way of dues or levies to the Body Corporate. In the case of any amount payable to a bankrupt, payment must be made to the Official Assignee, or in the case of a company removed from the companies register to the Office of the Treasury.

(iv)The Body Corporate must advertise in the New Zealand Herald and The Post newspapers the holding of the money due to any unit owners unable to be contacted by name.

(v)The Body Corporate must lodge with the Court an account for the implementation of directions (ii) and (iii) above, which account shall be given to each unit owner by their last known address (or email address).

(vi)In the case of unit owners who cannot be contacted and paid out their interests, their share is to be paid to the Crown (as unclaimed money) after twelve months has passed following the advertisement in direction (iv) above.

[29]The applicant has leave to apply for further orders as necessary.

McHerron J

Solicitors:

Sainsbury Logan & Williams, Napier for Applicant