Body Corporate 166208 v Temple 88 Limited
[2016] NZHC 848
•29 April 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2015-404-2971 [2016] NZHC 848
BETWEEN BODY CORPORATE 166208
Appellant
AND
TEMPLE 88 LIMITED Respondent
Hearing: 6 April 2016 Appearances:
D J Barr & K R Lydiard for Appellant
M C Frogley for RespondentJudgment:
29 April 2016
JUDGMENT OF DAVISON J
This judgment was delivered by me on 29 April 2016 at 5pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors:
Simpson Grierson, Auckland
Rainey Law, Auckland
BODY CORPORATE 166208 v TEMPLE 88 LTD [2016] NZHC 848 [29 April 2016]
Introduction
[1] This is an appeal from a decision of Judge Harvey at the District Court at Auckland, overturning a decision of the Tenancy Tribunal.1 Judge Harvey held that, contrary to the requirements of Regulation 8(1) of the Unit Titles Regulations 2011 (Reg 8(1)), the appellant had given insufficient prior notice of an extraordinary general meeting which was held on Wednesday 3 December 2014 (the EGM). Notice was prepared and sent to every unit owner on 26 November 2014.
Regulation 8(1) provides:
8 Notice of extraordinary general meeting
(1) At least 1 week before the date of an extraordinary general meeting, the chairperson or body corporate committee (as the case may be) must issue a notice of an extraordinary general meeting to every unit owner in the unit title development by each owner's preferred method of contact.
[2] Judge Harvey determined that Reg 8(1) required that seven “clear” days elapse between the day of giving of notice and the day upon which the EGM was held, and ruled that the notice given for the meeting was insufficient by one day. Having reached that conclusion, the Judge cancelled the award of costs that had been made in favour of the appellant by the Tribunal. No orders were sought or made by the Judge as regards the validity of the resolutions that had been passed by the appellant at the EGM.
[3] The appellant, Body Corporate 166208, appeals against Judge Harvey’s decision, submitting that the period of notice for the holding of the EGM was in fact given and the costs order ought to be reinstated.
[4] The point raised by this appeal requires a decision as to the correct interpretation of the phrase “at least 1 week before the date of an extraordinary general meeting”, as contained in Reg 8(1) of the Unit Titles Regulations. The issue being, whether the day on which notice of the EGM was sent out is or is not included
in the computation of the one week notice period.
1 The appeal is brought under s 119 of the Residential Tenancies Act 1986, pursuant to which any party to an appeal under s 117 of that Act dissatisfied with the decision of the District Court as being erroneous in point of law may appeal to the High Court on a question of law.
[5] Before turning to consider the correct interpretation of that phrase, I first set out the factual background and legislative context.
Background
[6] The appellant is a body corporate constituted pursuant to the Unit Titles Act
2010 (“UTA”) to operate the business and common management interests of the unit owners of a 60 unit apartment complex situated at 30 York Street, Parnell, known as the York Street Apartments (the Apartments).
[7] The respondent, Temple 88 Ltd, is the proprietor and owner of Unit P8, one of the eight penthouse units within the complex.
[8] The Apartments were constructed in the mid-1990s. Throughout the life of the building, limited maintenance was undertaken and, more recently, some building elements, particularly around the deck areas located on the penthouse level, appear to have failed, resulting in water leaking into apartments located below those deck areas.
[9] In October 2013, the appellant engaged the building consultants CoveKinloch to produce a report on the state of the building. The CoveKinloch report was presented to the appellant at an EGM in February 2014. As a result of concerns raised by a number of the unit owners, it was decided that the appellant would engage a second firm of building consultants, Alexander & Co, to peer-review the CoveKinloch report.
[10] An Annual General Meeting (AGM) of the appellant was subsequently held on Tuesday 3 June 2014. The minutes of the AGM include the following from the Chairman’s report:
Following the EGM held in February 2014 it was noted that 55 owners had returned the forms to the committee noting whether they accepted their Cove Kinloch report or not, and that 11 owners were disputing the report. A licensed builder had come to the site with a tiler and had removed sections of ceilings in apartments below those disputing that any deck works were required. These investigations showed that water was getting through and moisture readings were taken. These tradesmen were of the opinion that the Cove Kinloch report was accurate and that if the decks weren’t leaking yet
then the membranes are nearing the end of their useful life and are likely to cause issues in the near future. They were also of the opinion that installing the upstand on the decks should be mandatory as they did not believe that anyone would issue a warranty for their work if this were not done.
As some of the objections had been quite aggressive, the committee had engaged Simpson Grierson to act for the Body Corporate in these matters. A further surveyor, Alexander & Co. had also been appointed to peer review the Cove Kinloch report on the Y and P levels. They would be on site at the end of June and individual reports would be issued to the Y and P level owners.
At that AGM a detailed budget was presented and approved. The budget provided for the initial expenditure of money to carry out repairs and maintenance work to the apartments, and a general approval and authority was given to the Body Corporate Committee (the BCC) to enter into any necessary obligations to give effect to any of the expenditures provided for in the budget.
[11] In August 2014, the report from Alexander & Co was received by the appellant. The Alexander & Co report substantially confirmed the findings of the CoveKinloch report.
[12] On 22 November 2014, a document entitled “Questions we have Asked and Answers we have Found” (the document), was circulated by one of the directors of the respondent and sent by email to all unit owners other than those unit owners who were members of the Body Corporate Committee (BCC).
[13] Taken as a whole, the theme and tone of the document was highly critical of the BCC and called into question whether the BCC was competently and correctly proceeding with its work in relation to the supervision and oversight of the maintenance and remedial works of the Apartments, as provided for in the budget. The document also challenged the validity of the appointment of the BCC chairman, and raised a range of further issues, including whether the BCC had acted within its powers in commissioning CoveKinloch in relation to possible work to be carried out on individual units; whether information regarding the actions being taken were being provided to unit owners on a timely basis; and whether one of the BCC members had a conflict of interest by being involved in the management of CoveKinloch.
[14] Of the range of criticisms set out in the document, the final criticism was the most forcefully worded. This referred to the BCC having resolved to use legal action against unit owners who refused to cooperate in having remedial building work done. Under this heading, the document quoted passages taken from the minutes of a BCC meeting held on 8 April 2014, which included reference to the fact that unit owners of the P level (the penthouse level) of the Apartments had disagreed with any work being done on their decks.
[15] The document concluded in the following terms:
The decision by the Committee to accept a visual inspection that took no account of the building’s age value of the property, long history of maintenance and its decision to accept the verbal opinion of a licensed builder that to date has provided no factual basis for his conclusions, while all the while disregarding both expert opinion submitted to the Committee countering these claims and the extensive knowledge of some owners offered also refuting these claims borders on recklessness.
To then mandate owners object only by expensive legal channels raises the question as to whether the Committee have engaged in consultation with owners at all which would be considered prudent in this case, regardless of whether this is required in the Act.
I/We the undersigned support Mr Carvalho, Mr Osmond & Mr Saville in their attempts to consult with the Committee over:
a) The Long Term Maintenance Plan
b) The Cove Kinloch & Alexander & Co reports and the contrary reports
c) The Modernisation Plan
d) The costs and recovery against those affected
I/We confirm that if necessary (i.e. consultation is not successful) then I/we will sign a suitable request for an EGM and resolutions to put matters on hold (I/we hope this will not be necessary)
[16] Although the document was forwarded by email to unit owners other than members of the BCC, it was soon brought to the attention of the BCC members who convened a BCC meeting on Sunday 23 November 2014 to decide how they would respond to the criticisms and deal with the pressing need to make progress with the maintenance plan and remedial work, as was required and authorised by the appellant. At the conclusion of the meeting, the BCC resolved it was:
in agreement that an EGM should be held to clarify the maintenance progress and address inaccurate information as circulated to residents as is to be held on Wednesday 03 December at 7.00pm …
[17] The BCC prepared a comprehensive statement in reply, entitled “Statement by Body Corporate Committee in response to issues raised in documents circulated by Ms Hassine from Hassine/Carvhalo following a meeting of a group of owners on
19 November 2014”. This document contained the BCC’s detailed response to all of
the questions and criticisms.
[18] In accordance with the resolution of the BCC to call an EGM, notice of the
EGM date was prepared and sent to all of the unit owners on 26 November 2014.2
Although some unit owners had stipulated correspondence by sent by conventional mail, most had stipulated an email address and consequently received notice without any significant delay following. The notice stated:
NOTICE IS HEARBY GIVEN that an Extraordinary General Meeting of the
Body Corporate will be held at The Endeavour Room, Quality Hotel, 10 – 20
Gladstone Road, Parnell on Wednesday 03 December 2014, at 7.00 pm.
[19] The EGM was accordingly convened and held on 3 December 2014. On the agenda for discussion were the following items:
(4) Committee response to email
Committee response to email circulated by L Ben Hassine and C Carvhalo on 22 November 2015.
(5) Maintenance Update
I. Cove Kinloch report
II. Alexander and Co Peer Review
III. Structural Engineers review. IV. Architectural Update
V. Next steps
(6) Endorsing the Body Corporate Committee
2 Regulation 4 of the Unit Titles Regulations 2011 requires a body corporate to include in its register details of each unit owner’s preferred method of contact which can be via post or email.
By ordinary resolution That the Body Corporate endorses the actions and decisions of the Body Corporate Committee in respect of the issues raised in the document titled “Questions we have Asked and Answers we have Found”, sent to the unit owners by email on 22
November 2014.
(7) Obtaining agreement on the next steps
By ordinary resolution That the Body Corporate will progress the repairs and maintenance by:
I. Confirming the findings of the Cove Kinloch and Alexander & Co reports by commissioning non invasive ILD testing of the P- Level decks and undertaking invasive testing where required;
II. Engaging Cove Kinloch to prepare a scope of work and work program based on the Cove Kinloch and Alexander & Co reports and the further testing;
III. Engaging Cove Kinloch to put the maintenance works to tender;
and
IV. Calling a further EGM to approve acceptance for the preferred tender.
[20] The EGM was attended by 40 unit owners in person, with a further 17 having provided proxies and one owner casting a postal vote in relation to the resolutions, with the result that 58 of the 60 unit owners participated in the EGM and resolutions passed.
[21] There were two motions before the EGM in respect of which ordinary resolutions required a simple majority to be passed. The result was that:
(a) The motion endorsing the BCC and its actions and decisions in respect to the issues raised in the “Questions We Have Asked and Answers We Have Found” document, was passed with 80 per cent of the votes cast in favour of the motion and thereby endorsing the actions of the BCC.
(b) The motion seeking agreement on the “next steps” in relation to the
repairs and maintenance program was passed with the support of 78 per cent of the votes cast.3
3 The percentages referred to are taken from the appellant’s submission, which were not disputed
[22] Both directors of the respondent attended the EGM. One of them, Mr Shim, questioned the validity of the meeting and asked that it be noted that he was attending under protest. However, it is apparent that Mr Shim actively participated at the EGM, as his name is included and recorded in the minutes in connection with a number of matters. Similarly, the minutes record that the other director of the respondent, Ms Hassein, also actively participated.
[23] During the EGM, the Chairperson advised that he had received a notice signed by 15 unit owners requesting a further EGM. The notice set out several motions for consideration and decision-making by the appellant, including that it put on hold its repair and maintenance programme pending an independent review of all information by a suitably qualified engineer. At the conclusion of the EGM, the Chairperson advised the meeting of the notice and that a further EGM was required to be called for Monday 15 December 2014. Shortly after the EGM of 3 December
2014, this notice was withdrawn, presumably in light of the overwhelming support for the BCC and its continuation with the repair and maintenance programme, as shown by the voting of unit owners at the EGM.
[24] I have set out the background and history to the EGM of 3 December 2014. Such a review clearly demonstrates that the directors of the respondent, together with all but two out of 60 unit owners, attended and participated at the EGM on 3
December 2014 and, in the case of the directors of the respondent, took active steps to challenge and advance their opposition to the actions of the BCC and the repairs and maintenance programme planned to be implemented by the BCC. Despite their involvement and opposition, the BCC received a resounding endorsement from those present at the meeting or represented by proxy, with the result that the proposed maintenance programme and schedule was overwhelmingly supported by the unit owners.
[25] Following the EGM, the appellant sent notices to each of the penthouse unit owners requesting access to their apartments for non-invasive International Leak
by the respondent. The minutes of the EGM appear to record that the motion seeking endorsement of the BCC was carried 37 votes in favour, 9 against and the resolution which sought agreement on the next steps of the repairs and maintenance program was carried 40 in favour, 11 against. However, it is not clear from the minutes how the proxy voting was counted.
Detection (ILD) testing pursuant to ss 80 and 138 of the UTA. The owners of the penthouse units, including the respondent, refused to allow the testing within their unit premises on the basis that ss 80 and 138 of the UTA only allowed access to units for the purpose of work being undertaken, and did not allow access to unit premises for the purpose of testing or other preliminary steps necessary to determine what work, if any, would be required. In addition, the respondent issued a trespass notice against the appellant.
[26] The appellant then filed an application to the Tribunal (the Tribunal) seeking orders granting it access to the units in order to undertake the ILD testing and any other testing required to continue with the planned maintenance programme.
[27] The day before the EGM date, on 2 December 2014, the respondent had made an application to the Tribunal in which it sought orders against the appellant on an ex-parte basis.4 The respondent applied for the Tribunal to:
1. Make URGENT ex parte orders regarding an invalidly called meeting AND stopping the body corporate committee proceeding with contracts for “maintenance and repair work” pending further order of the Tribunal.
2. Make orders as to liability for certain works.
3. Make orders as to access rights.
4. Make orders against individual members of body corporate committee and/or solicitors.
The decision of the Tribunal
[28] The Tribunal declined to deal with the respondent’s application on an ex- parte basis. The respondent’s application was subsequently heard together with the appellant’s own application that it made to the Tribunal following the EGM, in
which it sought orders that the owners of units P1 to 5, P 7 and 8:
4 By virtue of s176 (1) and (2) of the Unit Titles Act 2010, Part 3 of the Residential Tenancies Act
1986 applies with all necessary modifications in respect of the hearing and determination of a unit title dispute by a Tenancy Tribunal, and any reference in Part 3 of the Residential Tenancies Act to “this Act” is to be read as a reference to the Unit Titles Act 2010.
permit the Body Corporate and/or its agents to access their units to undertake International Leak Detection testing and any other testing required to continue with the planned maintenance programme.
[29] The Tribunal heard both applications on 15 May 2015, and issued a decision dated 24 July 2015 in which it granted the appellant’s application5 and dismissed the respondent’s application, holding that Reg 8(1) of the Unit Titles Regulations applied and had been complied with. In the decision of Adjudicator Setefano:6
[37] Regulation 8(1) is clear; the notice of the EGM must be issued at least 1 week before the date of the EGM. The regulations merely require the Body Corporate to “issue” the notice as there is no reference to “receipt” or “service requirements”. Plainly, the date of the meeting (3 December 2014) is excluded, with the minimum notice then calculated 7 days prior to this date, starting from 2 December with the seventh day being 26 November
2014. The evidence is that the notice of the EGM was issued on 26
November 2014, being “at least 1 week” before the date of the EGM.
[38] It is a formulation that is consistent with s 35(4) of the Interpretation Act 1999 which provides that a period of time described as ending before a specified day, act, or event, does not include that day or the day of the act or event. By implication, the first day of the relevant period can be included. Accordingly, the relevant period of seven days is calculated by including Wednesday 26 November.
[39] For the avoidance of doubt, the formulation is not one to which section 35(5) would apply, because the “event” to which that sub-section refers is one which is independent of the action which is required to be undertaken.
The decision of the District Court
[30] The respondent appealed the decision of the Tribunal. The appeal was heard and determined by Judge Harvey in the District Court at Auckland on 12 November
2015. It is this decision which is now under appeal.
[31] The sole issue before Judge Harvey was whether Reg 8(1) had been complied with.
5 The Tribunal made a declaration that the respondent owners of units P1-5, 7 & 8 were to permit the Body Corporate and its agents to access their units to undertake ILD testing on the decks at a time to be agreed with the unit owners, or failing agreement, following three days’ written notice by the Body Corporate to the respondents.
6 Temple 88 Ltd v Body Corporate 166208 TT Auckland 14/00190/UT, 24 July 2015; Body
Corporate 166208 v Temple 88 Ltd TT Auckland 15/00046/UT, 24 July 2015 at [37]–[39].
[32] In concluding that the requirements of Reg 8(1) had not been met, Judge
Harvey referred to a decision of Allan J in Tessema v Police,7 and said:8
[9] But the important thing about Justice Allan’s analysis is the reference to the starting point and the finishing point and, in this particular case, it is my view that there are two events that are critical. One is the date of service of the notice, which is related to, of course, the date of the meeting and, in this particular case, the dates were 26 November, which was the date upon which the notice was sent out, the date of the meeting, which was 3
December. There are not seven days or one week between the two. It is six and they were short by one day.
[33] Judge Harvey allowed the appeal and made an order that the costs awarded
by the Tribunal “are not payable and are cancelled.”9
Submissions
The appellant
[34] For the appellant, Mr Barr submits that the Reg 8(1) notice requirement had been met by the dispatch of notice to all unit owners on 26 November 2014, being one week before, but not including, the date of the EGM.
[35] He submits that the requirement of Reg 8(1) – that notice is to be given at least one week before the date of an EGM – is to be construed and interpreted in light of the ascertained meaning of “time” provided by s 35 of the Interpretation Act 1999, noting that the purposes of that Act include the promotion of “consistency in the language and form of legislation”.10
[36] The appellant contends s 35(4) of that Act is directly relevant. It provides:
A period of time described as ending before a specified day, act, or event does not include that day or the day of the act or event.
[37] Mr Barr notes there is no dispute between the parties that if s 35(4) is to
apply, the meaning of “1 week” would clearly operate to include the day upon which
7 Tessema v Police [2012] NZHC 2603.
8 Temple 88 Ltd v Body Corporate 166208 [2015] NZDC 22682 at [9].
9 At [10].
10 Interpretation Act 1999, s 2(c).
notice of the EGM was given. In his submission, however, s 35(4) would exclude the date of the EGM, with the result that the giving of notice on 26 November 2014 complied with Reg 8(1) by giving one week’s notice before the EGM date. Mr Barr submits that the plain and ordinary meaning of Reg 8(1) would lead to the same interpretation.
[38] Further, submits Mr Barr, Parliament has clearly and deliberately specified the meaning and expression of time in the Interpretation Act, and since the Unit Titles Regulations were drafted and promulgated some 12 years since the passing of the Interpretation Act, Reg 8(1) must be interpreted in light of that Act. Furthermore, the use of the word “before” in Reg 8(1) conforms with and falls specifically within s 35(4).
[39] By contrast, s 35(5) employs a quite different approach, namely one requiring a number of days between two events. In such cases, the requisite number of clear days between each event, neither of which is to be counted, will be required in any computation of time. By implication, Mr Barr submits, a s 35(4) method of calculating time stipulates that the day of the event itself is to be excluded but the day upon which notice of that event is given would be counted.
[40] Having regard to that analysis, Mr Barr submits that the Tribunal’s decision
was correct.
[41] Turning to the decision of Judge Harvey in the District Court, Mr Barr submits that the Judge was wrong to rely on the reasoning of Allan J in Tessema, as in that case, the Court was interpreting a statutory provision which was of a different context; one that required notice to be given “at least seven clear days before the
hearing at which the certificate is tendered …”.11
[42] By contrast, there is no requirement in the present case for “clear” days. Moreover, submits Mr Barr, the legislation that was the subject of interpretation in Tessema was enacted in 1975, which was well before the enactment of the Interpretation Act in 1999. It can be inferred that since the passing of the
Interpretation Act, Parliament would be conscious of the provisions of s 35 so as to inform the choice of language used in any subsequent legislation.
[43] Mr Barr further submits that there are contextual and policy reasons why s
35(5) of the Interpretation Act should not apply here. He notes that the members of the BCC and its Chairperson are all volunteers and unit owners without legal training. He submits that the technical and legal interpretation contended for by the respondent, one triggering the application of s 35(5), is not one that lay people could be expected to recognise. In this context, he submits that any interpretation should also be informed by reference to s 3 of the Unit Titles Act, which describes the purposes of that Act as being:
to provide a legal framework for the ownership and management of land and associated buildings and facilities on a socially and economically sustainable basis by communities of individual owners and in particular …
(c) to establish a flexible and responsive regime for the governance of unit title developments.
[44] Mr Barr submits that, having regard to the purposes of the Unit Titles Act, the interpretation of Reg 8(1) should recognise that the management and conduct of the business of bodies corporate is to be undertaken by unit owners themselves and, as such, they should not be subject to overly technical requirements or provisions.
[45] Mr Barr further submits that, in any event, it was clear that the respondent had not suffered any prejudice, as its directors had attended the EGM and had the opportunity of addressing the respondent’s position in relation to the proposed resolutions, as it did, and had voted on the resolutions. As nearly all other unit owners were also either present or had given proxies to vote on the resolutions, and as the resolutions supporting the BCC and the maintenance plan were carried with a substantial majority, the outcome of the meeting could not be expected to have been any different even if notice of the meeting had been sent out one day earlier than in fact it was.
[46] Mr Barr also relies upon s 85(2) of the Residential Tenancies Act 1986 as being relevant to the interpretation and application of Reg 8(1). Section 85(2) provides:
The Tribunal shall determine each dispute according to the general principles of the law relating to the matter and the substantial merits and justice of the case, but shall not be bound to give effect to strict legal rights or obligations or to legal forms or technicalities.
[47] The appellant submits that the Judge made an error of law by failing to apply s 85(2) in his determination of the appeal. It is submitted that even if the Tribunal had concluded that insufficient notice of the EGM had been given, it nevertheless would have been correct to refuse granting relief to the respondent having regard to the provisions of s 85(2) and the circumstances whereby the respondent had fully participated at the EGM and almost all of the members of the Body Corporate had attended or participated, and had overwhelmingly supported the resolutions that were passed. For this proposition, the appellant relies on the observations of Muir J in
Wheeldon v Body Corporate 342525,12 and submits that, here, any failure to comply
with the notice requirement of Reg 8(1) was only a “technical” breach with no substantive effect; therefore resulting in no prejudice to any unit owner, including the respondent. When seen as such, the appellant submits that the Judge failed to consider whether the Tribunal, in applying s 85(2), would have refused to grant relief to the respondent in any event.
[48] Finally, in relation to the Tribunal’s costs award which was cancelled by Judge Harvey, the appellant submits that the Judge erred in doing so, as the costs award related not just to the issue of the sufficiency of notice of the EGM, but also to the appellant’s own separate application to the Tribunal on which it had been successful and which was not challenged in the respondent’s appeal to the District Court. The appellant submits that if the appeal is allowed, this Court should confirm and reinstate the Tribunal’s costs award.
The respondent
[49] Mr Frogley, for the respondent, supports Judge Harvey’s decision and submits that the Judge was correct to hold that Reg 8 (1) required notice to be given at least one clear week before the date of the proposed EGM. He submits that in interpreting any regulation, the court will have regard to both text and purpose, but
where an issue of interpretation is governed by any of the specific rules provided for in Part 5 of the Interpretation Act, those rules will in general dictate the correct interpretation.
[50] He further submits that the Judge was correct in holding that s 35(5) was engaged and that the time period described in Reg 8(1) is a reference to the minimum number of days (i.e. seven days) required between two events (i.e. the giving of the notice and the meeting). Mr Frogley submits therefore, that applying s
35(5) means that the notice given by the appellant fell short by one day of that required by Reg 8(1).
[51] The respondent further submits that Judge Harvey was correct to apply the same reasoning used by Allan J in Tessema, and says that he was correct in stating that what is important about that decision is the reference to the starting point and finishing point, which begins with the giving of notice and ends with the date of the meeting, resulting in the engagement of s 35(5) and, consequently, the exclusion of both the day of giving notice and the day of the meeting when interpreting the requirement of one week’s notice. Mr Frogley submits that the presence of the words “clear days” as used in s 31(3)(a) in the Misuse of Drugs Act 1975 operate to support the conclusion that s 35(5) applies, and such an interpretation would nevertheless be correct even if those words were not used. He says that as regards this case, the use of the words “at least 1 week before” carries the same interpretative signal as the words “at least seven clear days”.
[52] Mr Frogley submits that the same reasoning applied by Judge Harvey has been applied in other cases in New Zealand, Australia and the United Kingdom, which all support the proposition that the use of the phrase “at least” is generally a signal that the period excludes the date on which the notice is given and the date on
which the notice period ends.13
[53] In response to the appellant’s submission that the Tribunal would have been
correct in refusing to grant relief even if it had found that Reg 8(1) had not been
complied with by applying s 85 of the Residential Tenancies Act, the respondent submits that this is an issue beyond the scope of this appeal, which is limited to the determination of a question of law arising in the decision of the District Court appealed from. Mr Frogley submits that this appeal is not a general appeal, but is rather an appeal limited to a question of law. While the respondent accepts that the interpretation of the Reg 8(1) notice requirement involves a question of law, the appellant’s alternative argument, that relief should be refused in any event, does not appear to raise an issue of law, and is at most, a question of fact which cannot be raised on appeal under s 119 of the Residential Tenancies Act.
[54] Mr Frogley submits that a body corporate is a creature of statute with its powers and responsibilities dictated by the provisions of the Unit Titles Act. If it acts outside its powers and duties as provided for by that Act, it acts ultra vires and its actions are consequently void and invalid regardless of the merit of those actions
or even the consent of its members.14 Therefore, if proper notice of the EGM has not
been given and the meeting had not been properly called in accordance with the requirements of the Unit Titles Act, then any resolutions considered and passed at that meeting will have been passed ultra vires and are void as a matter of law.
Relevant law
[55] The Unit Title Regulations contain and set out procedural rules for the management and governance of bodies corporate, and include regulations providing for the holding of body corporate AGMs, EGMs, and the giving of notice for such meetings. For example:
(a) Reg 5 deals with the giving of notice of intention to hold an AGM; (b) Reg 6 deals with the giving of notice of an AGM;
(c) Reg 7 deals with the giving of notice of intention to hold an EGM for purpose of election; and
(d) Reg 8 deals with the giving of notice of an EGM;
all of which employ the same language in expressing the respective requirement for notice. The language used in each case being, “at least…weeks before the date of [AGM or EGM].”
[56] In the case of Reg 8(1), the notice requirement is expressed as follows:
Notice of extraordinary general meeting
At least 1 week before the date of an extraordinary general meeting, the chairperson or body corporate committee (as the case may be) must issue a notice of an extraordinary general meeting to every unit owner in the unit title development by each owner’s preferred method of contact.
[57] Although not directly applicable here, Reg 9 authorises the chairperson or body corporate committee of a body corporate to give notice of an emergency EGM, “provided that the chairperson or body corporate committee makes reasonable efforts to notify every unit owner of the meeting”. Regulation 9 is significant in that it highlights a statutory indication that the notice requirements contained in Regs 7 and
8 are required to be strictly complied with unless the need for a meeting arises in an emergency situation.
[58] Section 5(1) of the Interpretation Act requires the meaning of an enactment to be ascertained from its text and in the light of its purpose. Part 5 of that Act is headed, “Meaning of terms and expression in legislation” and contains provisions dealing with definitions of terms routinely used in legislation and other specific terms, and includes in s 35, a provision dealing with the computation of time.
[59] Section 35 provides:
(1) A period of time described as beginning at, on, or with a specified day, act, or event includes that day or the day of the act or event.
(2) A period of time described as beginning from or after a specified day, act, or event does not include that day or the day of the act or event.
(3) A period of time described as ending by, on, at, or with, or as continuing to or until, a specified day, act, or event includes that day or the day of the act or event.
(4) A period of time described as ending before a specified day, act, or event does not include that day or the day of the act or event.
(5) A reference to a number of days between 2 events does not include the days on which the events happened.
(6) A thing that, under an enactment, must or may be done on a particular day or within a limited period of time may, if that day or the last day of that period is not a working day, be done on the next working day.
[60] The purposes of the Interpretation Act are set out in s 2, which are:
(a) to state principles and rules for the interpretation of legislation; and
(b) to shorten legislation; and
(c) to promote consistency in the language and form of legislation.
[61] As is well illustrated in the many cases deciding the computation of time and the interpretation of language stipulating time periods for the giving of notice or time limits within which actions must be taken, the whole question of how time is to be computed in any given situation can be problematic and controversial. The legislative purpose of promoting consistency in the language used in legislation underlines the importance of the provisions of s 35, as being a legislative means of achieving consistency, and indeed, greater certainty in the interpretation and application of legislative provisions dealing with the computation of time.
[62] When addressing the correct interpretation of the notice provisions used in the Unit Titles Regulations, it is immediately apparent that the wording of those provisions have employed the language of s 35, and this must be taken to be the result of a deliberate legislative intention to employ the language of the Interpretation Act.
[63] Section 35(1) covers an interpretation of time that “includes the day” of an act or event, where a period of time is described as beginning at, on, or with a specified day, act or event. Similarly, s 35(3) also makes reference to an “includes the day” formula, in relation to a period of time described as ending by, on, at, or with, or as continuing to or until, a specified day, act, or event.
[64] In contrast, s 35(2) and s 35(4) focus on a period of time which “does not include the day” of the act or event. In the case of s 35(2), a period of time is described as beginning from or after a specified day, act or event. In the case of s
35(4), a period of time is described as ending before a specified day, act, or event.
[65] Thus it is clear that the use of the words from and before are legislative “signposts”, to indicate how the time computation is to be made, and particularly, whether the day of an event where time is described as beginning from, or the day of an event where time is described as ending before, are to be included or excluded. This potential conundrum is resolved by the legislative stipulation that those days are to be excluded from the computation.
[66] Section 35(5) is directed at a quite different situation, being that where the language of a statute or other legislation refers to a number of days “between 2 events”, in which case, the section provides that the days on which the events happened are not included in the computation of time. Again, the word “between” is a signpost word to be looked for in legislative language as an aid to interpretation by reference back to s 35(5).
[67] Notwithstanding the various language used to describe time limits in legislation enacted prior to the passing of the Interpretation Act, since its enactment, it must be assumed that Parliament has deliberately employed the mechanisms and interpretative meanings of s 35 to define legislative time requirements and limits in order to promote consistency in the language and form of legislation.
[68] In SDJ, Re, Robertson and Potter JJ sitting as a Full Court, considered the then recently enacted s 35 of the Interpretation Act as being applicable to the interpretation of s 7(7) of the Adoption Act 1955, which provides that a document signifying the consent by a mother of a child to an adoption shall not be admissible “unless the child is at least 10 days old at the date of the execution of the document”. The Court compared and contrasted the equivalent provisions of s 25 of the repealed Interpretation Act 1924, which was in effect prior to the commencement of the Interpretation Act on 1 November 1999 and stipulated an exclusionary formula
where any period of time from a given day was required.15 The Court reviewed examples of the application of both the inclusive rule and exclusive rule approach saying:
[21] The inclusive rule (the whole of the first day is included) applies when it is a question of an Act or some general provision coming into effect. This is so that the effect of the provision is not cut down by deferring its commencement until some hours after the triggering event occurs. In Clayton's Case it was held that the words ``from henceforth'' meant from the beginning of the day of the delivery of the lease.
[22] The exclusive rule applies (the whole of the first day is excluded) where, before the end of a specified period, some single act eg serving a notice, may be done. This is because if the first day were counted in, the time available for doing the act would be in effect shorter than the specified period. In Goldsmiths' Co v West Metropolitan Railway Co [1904] 1 KB 1 the power to serve a notice was held to have ceased after the “expiration of three years from the passing of this Act.”' Even though the Act was to be treated as being in force throughout the day when the royal assent was given, that day was not to be counted in computing the period of three years.
[23] Some later cases have suggested that the exclusionary rule always applies – Stewart v Chapman [1951] 2 KB 792 and Cartwright v MacCormack [1963] 1 WLR 18 at p 21 – although the authors of Bennion doubt the correctness of this approach.
[24] These rules will give way if there is a clear statutory intention that they do not apply. For example if a substantial point turns on the precise moment of time, then the precise moment of time may be inquired into.
[69] As recognised by the Court, the common law rules of interpretation give way if there is a clear statutory intention that they do not apply, and noted that the exclusionary rule is embodied in s 35(5).16
[70] As recognised by the Court, the common law rules of interpretation give way if there is a clear statutory intention that they do not apply, and further, the exclusionary rule is embodied in s 35(5).17
Analysis
[71] Having regard to these principles of interpretation, I consider it to be
15 Acts Interpretation Act 1924, s 25(b): “If in any Act any period of time dating from a given day, act, or event is prescribed or allowed for any purpose, the time shall, unless a contrary intention appears, be reckoned as exclusive of that day or of the day of that act or event:”
16 At [30].
17 At [30].
significant that the language used in Reg 8(1) is consistent with the language employed in s 35(4), and specifically, the use of the word “before” in the phrase “at least 1 week before the date of an extraordinary general meeting...” Where the s
35(4) formula and method of computation is employed, the day of the specified event is not included in the computation. By necessary inference, and given that the first day of the time period (one week) is not excluded, the day upon which the time starts to run (i.e. the first day of the one week period) is to be included in the computation.
[72] Had Parliament intended to require a notice period which resulted in a seven day period (i.e. an interval of seven days; seven full days; seven clear days), that was to be calculated by disregarding the day upon which notice was given, and disregarding the day of the meeting for which the notice was given, then that legislative intention could and would have been conveyed by the use of language that required seven days to elapse between the day of giving notice and the day of the meeting being called. The use of the word “between” would necessarily engage s
35(5) and require that only full or clear days be counted in such a time computation. However, that language has obviously not been employed in Reg 8(1) and, in my view, s 35(5) has no application in the present case. Accordingly, I consider that a clear statutory intention can be found in the wording of Reg 8(1) that an inclusive process of computation is required.
[73] For those reasons, I have concluded that the period of notice given by the appellant for the EGM of 3 December 2014 complied with the notice requirement of Reg 8(1). The notice was sent out to unit owners on Wednesday 26 November 2014 for a meeting to be held on Wednesday of the following week. The notice was required to be given “at least 1 week before” the date of the EGM, and by applying the interpretation aid of s 35(4), the day of the EGM is not included in the computation of the one week notice period. On the basis that the day of giving notice is included in the computation of time, a notice sent out on Wednesday 26
November 2014 would result in one week (seven days) elapsing until and including
Tuesday 2 December.
Other cases to which the respondent and the Judge have referred
[74] In reaching his decision, Judge Harvey cited and relied upon the decision of
Allan J in Tessema. That case concerned s 31(3)(a) of the Misuse of Drugs Act
1975, and the correct interpretation of the phrase “at least seven clear days before the hearing at which the certificate is tendered”. Allan J found that s 35(5) was engaged as the two events of relevance were the date of service and the date of hearing. He said:18
Proper weight must be given to the requirement for seven clear days notice.
……It is well established that a requirement for a specified period of clear
days notice must be taken to exclude both the date of the notice and the date upon which it is to take effect.
[75] There is no mention made of “clear days” in Reg 8(1), which, in my view, is significant when interpreting that regulation. The use of the phrase “clear days” in legislation passed by Parliament in 1975, to which Allan J referred, obviously well preceded the enactment of the Interpretation Act 1999. Since the passing of the Interpretation Act in 1999, the concept of providing a number of clear days can be met by employing the language referred in is s 35(5) and stipulating that seven days (or at least seven days) notice must be given between the giving of the notice and the event to which it relates. Therefore, I distinguish the decision in Tessema on the basis that the “clear days” requirement is not present in the wording of Reg 8(1). Moreover, I consider that s 35(5) should not be found to apply simply because there are two identifiable dates, being the day upon which an action is taken and a day upon which an event is to occur. Whilst different possible interpretations are in theory available, the provisions of the Interpretation Act operate to create a statutory regime that specifically excludes counting the day of the EGM event, and by remaining silent on how the date of the giving of the notice is to be treated and, by necessary implication, it is to be counted.
[76] Counsel also referred me to the decision of Wild J in Khan v Ahmed,19 in which the Court considered the rules contained in the constitution of an incorporated society regarding the giving of notice where an urgent Special General Meeting was
called. The relevant provision, Article 8(b) provided:
18 At [24].
19 Khan v Ahmed [2008] NZAR 686 (HC).
If there is an urgent matter to be resolved by a Special General Meeting, the period of notice may be reduced from one week to three days as may be approved by the committee.
[77] Wild J held that, in this context, three days mean three clear days. In reaching this conclusion, he had regard to the fact that it was a provision that was being used in circumstances of urgency to significantly reduce the ordinary notice period of at least one week. Wild J considered r 13(2) of the High Court Rules to be analogous, which provides:
(2) Where a time of one day or a longer time is to be reckoned by reference to a given day or event, the given day or the day of the given event shall not be counted.
[78] His Honour observed:20
If r 13(2) were applied here, it would exclude both the day on which notice was given (25 July) and the day of the meeting ( 28 July), leaving two days’ notice.
Accordingly, article 8b. was breached in that there was insufficient notice of the meeting.
[79] In my view, that case is also distinguishable by reason of it relating to the interpretation of a provision in an incorporated society’s constitution, as opposed to a statutory provision to which the provisions of the Interpretation Act applies.
The costs order and confusion
Having found that the notice given for the EGM was short by one day, the only consequential order Judge Harvey made was that the costs awarded by the Tribunal be cancelled.21 Apparently without knowledge of the outcome of the appeal to the District Court, the Tribunal proceeded to make an order for costs against the respondent.
Conclusion
[80] Having found that the notice requirement contained in Reg 8(1) was met and
20 At [23]–[24].
21 Although the Judge cancelled the Tribunal’s costs order, at the time of the District Court decision, no costs order had in fact yet been made by the Tribunal.
complied with the appellant’s notice of EGM, sent out on 26 November 2014, it follows that I find that the learned District Court Judge was in error in his finding that s 35(5) applied and that the notice given for the EGM was insufficient by one day.
[81] Accordingly, the appeal is allowed and the judgment and decision of the District Court is set aside, and the decision of the Tribunal is consequently reinstated. The District Court order cancelling the order for costs made by the Tribunal is also set aside, and the order is also reinstated.
[82] The appellant is entitled to costs on the appeal to the District Court and for costs, as the successful party, to this appeal. I direct that that the parties each file a
memorandum as to the quantum of costs which I shall then determine.
Davison J
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