Body Corporate 172108 v Meader HC Auckland CIV 2009-404-6868

[2010] NZHC 1540

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2009-404-6868

BETWEEN  BODY CORPORATE 172108

Applicant

ANDJOANNE MONICA MEADER & ORS Respondents

Hearing:          31 August 2010

Counsel:          T J G Allan for Applicant

N Khouri for Manchester Securities Ltd (37th Respondent) No appearance by, or on behalf of remaining 47 Respondents

Judgment:      31 August 2010

(ORAL) JUDGMENT (NO. 3) OF HEATH J

Solicitors:

Grove Darlow & Partners, PO Box 2882, Auckland

Gilbert Walker, PO Box 1595, Auckland

BODY CORPORATE 172108 V MEADER & ORS HC AK CIV 2009-404-6868  31 August 2010

[1]      In my judgment of 19 August 2010, I made amendments to the proposed scheme under s 48 of the Unit Titles Act 1972.  I indicated that if counsel had any concerns about the precise form of the draft scheme attached to my judgment they should draw them to my attention before an order was sealed.   The proposed amendments are shown in bold type in the extracts set out below.

[2]      Ms Khouri, has drawn some matters to my attention, which I have discussed in chambers today, with Mr Allan and Ms Khouri.   I agree with Ms Khouri that cl 21.2 of the draft scheme should be further amended to read as follows:

Manchester shall not be liable to pay more than 11.88% of the total Cost of the Repairs carried out pursuant to this Scheme provided however that any Costs incurred by Manchester in respect of project management consultants or other construction-related advisors that do not provide benefit to all other individual proprietors or the Body Corporate shall be borne solely by Manchester. The costs in respect of project management consultants or other construction-related advisors that Manchester contends provide a benefit to all individual proprietors (other than Manchester) or the Body Corporate shall be made available in writing, together  with  supporting  documentation  to  the  secretary  of  the  body corporate. Any dispute about whether benefit is provided to all individual proprietors (other than Manchester) or the Body Corporate shall be determined under the dispute resolution provisions of this Scheme.

[3]      Ms Khouri has also identified two other problems of a more minor nature.  I

agree they should be amended.  Clause 21.3 will now read:

The Cost of Repairs to the Units and Common Property situated at level

12 of the Building shall be separately assessed and paid by Manchester, provided that Manchester shall give to and consult with the Body Corporate all documents and or information in connection with any design element, pricing, quantity surveyor’s or other review of prices, contracts and or sub- contracts with the intent that any works undertaken and to be paid by Manchester shall be transparent from the outset.

[4]      I record, however, that cl 21.2 must be read in conjunction with cl 21.3 in relation  to  the  obligation  of  MSL  to  provide  certain  documents  to  the  Body Corporate and to consult with it.  Clause 21.3 is not subject to cl 21.2.

[5]      Clause 21.4 will be amended to read:

Subject to clauses 21.1 and 21.2, the amount payable by Manchester on account of Repairs to the Building other than the works to level 12 listed in

clause 21.7 shall be 11.88% of the total Cost of Repairs less the cost of repairs assessed and paid for in accordance with clause 21.3.

[6]      Clauses 21.2 and 21.3, inadvertently numbered as such after cl 21.7, will be renumbered as cl 21.8 and cl 21.9.

[7]      Attached to this judgment is the final version of the scheme as approved.  The

Registrar may now seal an order in terms of that draft scheme.

[8]      Costs remain reserved, to be addressed in terms of para [45] of my judgment of 19 August 2010.

P R Heath J

SCHEDULE A

SCHEME UNDER SECTION 48 OF UNIT TITLES ACT 1972

In regard to Body Corporate 172108, North Auckland Land Registry

(the “Body Corporate”)

And the property situated at 196 Hobson Street, Auckland

Preamble

A.      This scheme governs repairs to a building situated at 196 Hobson Street, Auckland

(the “Building”), which is part of a unit title development under the Unit Titles Act

1972 (the “Act”).

B.       The Building consists of 39 apartments on 12 levels.   There are three levels of carparks, six levels of five units, two levels of four units and a penthouse that occupies the whole of level 12.

C.       The scheme binds the Body Corporate, any person who owns a Unit (an “Owner” or “Owners”),  including any transferees  and  assigns of  an  Owner,  and any other person who is bound by the scheme pursuant to the Act.

D.       The scheme authorises the repair of the Building generally in accordance with the building   work   approved   by   Auckland   City   Council   in   building   consent B/2008/28758 dated 23 July 2009 (the “Building Consent”), subject to the terms of the scheme.

E.      The scheme governs repairs to the Common Property held by the Body Corporate and to the Owners’ Units for the purpose of ensuring that damage caused to the Building by water ingress is repaired in an integrated manner.

F.The repairs to the Building shall be carried out pursuant to one construction contract managed by the Body Corporate other than as provided below in respect of level 12.

G.      The full extent of the work required to repair damage to the Building will not be known until work begins and the exterior cladding has been removed.  Any further damage to the Building that is identified during the course of the works will be governed by the terms of this scheme.

H.      The scheme fixes and apportions responsibility for the costs incurred in carrying out the Repairs and any other costs approved under the scheme.

To achieve the objectives outlined above, this Scheme therefore orders:

1.        Appointment

1.1Subject to the arrangements described below concerning the work to level 12 of the Building  and  the  other  terms  of  this  scheme,  the  Body  Corporate  is  hereby appointed the agent of each Owner, severally, with authority, from time to time, to authorise, undertake,  covenant, and agree on behalf of each  Owner all  matters concerning and incidental to the Repairs, including the costs of Repairs for which each Owner is responsible.

1.4All costs incurred in identifying the initial damage to the Building and the Repairs required in respect of which individual proprietors have been levied shall be deemed part of this scheme and the cost of such work shall be deemed to be Costs within the meaning of this scheme.

2.        Repairs

2.1The scheme authorises the repair of the Building in accordance with the building work approved in the Building Consent and any other work as the Body Corporate determines in necessary or appropriate to complete the Repairs.

2.2In order to give effect to paragraph 2.1, the term “Repairs” is to be given the widest possible meaning.   “Repairs” shall include the redesign, alteration, demolition, reconstruction,  restoration,  reinstatement  or  modification  to  any  part  of  the Common Property or a Unit, or such related work as the Body Corporate considers necessary or advisable, to:

(a)        Repair or remedy the damage to the Building to the standard whereby all building consents and certificates of compliance with the New Zealand Building  Code  are  issued  by  the  authorities  when  the  Repairs  are completed; and

(b)       Gain one or more Code Compliance Certificates in respect of the Repairs;

and,

(c)        Comply with all safety, engineering, earthquake, fire and other standards, and technical compliance work necessary to facilitate the undertaking and completion of the Repairs and to ensure the Building is sound and complies with all statutory and regulatory requirements (including the New Zealand Building Code); and,

(d)Take such steps, and carry out such works, as are practicable in the opinion of the Body Corporate to ensure that the integrity of the Building can be maintained into the future and that water damage to the Building does not recur in the foreseeable future; and,

(e)       Maintain  consistency  of  the  standard  of  the  Repairs  to  the  Units  and

Common Property.

For the sake of clarity, “Repairs” shall include but not be limited to:

(a)        Repair  of  the  exterior  cladding  of  the  Building,  including  by  way  of removal and replacement;

(b)Repair of structural elements, internal linings, decorative and other parts of the Building, whether exterior or interior parts of the Building and whether to Common Property or Units;

(c)       Repair to services and amenities provided to the Building and/or a Unit or

Units;

(d)All building work required under current legislation and regulations, even if the standard now required is different from the standard required when the Building was first completed;

(e)        All investigatory work into the scope of Repairs, or the process or work required to remedy any damage to the Building or to effect any Repairs carried out at any time;

(f)        All plans, drawings, diagrams, specifications, and other detail developed or prepared for the repair of any part of the Building.

3.        Costs

3.1The term “Costs” shall have the widest possible meaning and shall include all costs involved  in  assessing  and  carrying  out  the  Repairs  and  in  obtaining  Code Compliance Certificates for the Building once the Repairs are complete.  Without limiting the foregoing, Costs shall include:

(a)        The cost of investigating and assessing damage and repairs required; and, (b)       The cost of commissioning of advice or reports on all matters relating to

the Repairs; and,

(c)         The  contracting  out  of  the  building  work  and  other  all  contracts  that support or facilitate the Repairs; and,

(d)From time to time the cost of reassessing the Repairs required or still outstanding and the cost of any Repairs carried out as a result of such reassessment; and,

(e)         The  cost  of  all  work  required  to  meet  Building  Code  compliance, engineering and other building regulation standards; and

(f)        The cost of specific repairs to individual Units; and,

(g)        The cost of repairs to all parts of the Building structural or otherwise, external or internal;

(h)The cost of assessments, interim estimates, or provisions for anticipated costs, or increases or variations to Costs from time to time; and

(i)         The cost of obtaining Code Compliance Certificates for the Building once

Repairs are complete.

3.2Except in the case of manifest error, and subject to the arrangements described below concerning the work to level 12 of the Building, the decision of the Body Corporate as to what constitutes Costs shall be final and binding on all Owners.

4.         Powers

4.1The Body Corporate, for itself and on behalf of each Owner, is hereby granted the general power to ensure that the Repairs are identified and the work required is undertaken and completed in a good and workmanlike fashion and that the money required to meet the Costs of the Repairs is collected from each Owner.

4.2The Body Corporate is further granted such other powers and authority as may be necessary to enable it to fully and properly carry out this scheme, including the power:

(a)        To engage suitably qualified persons, from time to time, to identify and quantify  the  damage  and  the  form  of  Repairs  necessary  to  ensure  the damage is remedied professionally and in a good and workmanlike fashion and so that certification that the works comply with the Building Code can be obtained upon completion;

(b)To instruct suitably qualified advisors to develop plans and specifications for the work required to effect the Repairs, together with such variations or additions as from time to time may be determined;

(c)        To instruct suitably qualified advisors to manage the tender process and recommend the contractors and/or tradespersons to be involved in the Repairs;

(d)To engage such contractor/s and tradespersons as the Body Corporate determines and to sign all necessary contracts and other documents as may be necessary to carry out this scheme;

(e)        To employ suitably qualified project manager/s to oversee the carrying out of the Repairs, to certify progress payments and to attend to payments of Costs as required;

(f)        To authorise or commission such reports as the Body Corporate deems necessary or advisable, and to obtain such consents, approvals and certificates of compliance as the law requires and to carry out such work as may be necessary to meet those requirements;

(g)       To authorise advisors to inspect and re-evaluate the Repairs from time to time, and to alter or vary the scope of the Repairs to accommodate further work or to modify existing work as the Body Corporate thinks fit;

(h)       To levy and charge Owners for the Cost of Repairs;

(i)        To employ suitably qualified advisors to assess and determine interim and final Costs and to determine the allocation of those Costs between Owners;

(j)        To  employ  such  advisors,  managers,  agents  or  assistants  as  the  Body Corporate thinks fit for carrying out and completing the Repairs, collecting Levies, prosecuting or defending claims, and all matters incidental thereto;

(k)       To delegate to advisors or individuals such powers and authorities hereby given the Body Corporate as it from time to time, and for such period of time, determines;

(l)        To pay the secretary to the Body Corporate such remuneration as the Body Corporate  determines  for the  secretary’s  involvement  in the  scheme  as agent of the Body Corporate; and

(m)      To carry out all ancillary matters and things necessary to enable the Body

Corporate to progress and properly finalise the Repairs.

4.3Except as specifically varied by this scheme, the Body Corporate shall have all of the powers granted to the Body Corporate under the Unit Titles Act 1972.   The Rules of the Body Corporate shall be deemed to be powers granted to the Body Corporate in relation to this scheme.

5.         Body Corporate Duties

5.1       Subject to the arrangements described below concerning the work to level 12 of the

Building, the Body Corporate must, in a proper and professional manner:

(a)       Identify  the  extent  to  which  Costs  relate  to  Repairs  to  the  Common

Property and to any Unit or Units.

(b)      Negotiate all contracts and other arrangements for the carrying out of the

Repairs;

(c)      Proceed to have the Repairs carried out diligently and completed as expeditiously as practical;

(d)      Apply due care and attention to the making of all decisions of the Body

Corporate on matters relating to this scheme;

(e)       Seek   advice   from   suitably   qualified   advisors   where   necessary   or appropriate in carrying out or managing the Repairs.

(f)       Manage and assess the progress, extent and cost of Repairs at all stages as the work progresses to ensure the appropriateness, quality of workmanship, and compliance with the contract documents;

(g)       Properly call and hold meetings of the Body Corporate as appropriate to keep all Owners advised of progress in undertaking the Repairs;

(h)Keep  minutes  of  all  meetings  and  decisions  of  the  Body  Corporate  in connection with this scheme;

(i)       In the calling and holding of meetings of the Body Corporate to observe the procedures laid down in the Body Corporate Rules;

(j)       Advise Owners on a regular basis of the decisions of the Body Corporate and progress of Repairs, and make available to Owners minutes of meetings of the Body Corporate on request by an Owner;

(k)       Account to the Owners for all money that the Body Corporate or its agent receives and expends on behalf of the Owners under this scheme;

(l)       Ensure that all moneys received from each Owner for Repairs are only allocated and paid out for the Repairs;

(m)      Upon receipt of notice from any Owner, supply to that Owner within a reasonable time such oral or written information relating to funds received for Repairs and costs both for Common Property repairs and repairs to Units.  If an Owner requests information other than the records the Body Corporate has readily available, the Owner shall pay the reasonable cost of the Body Corporate gathering such additional information; and

(n)Where repairs to private property involves finishing work or accessories to the interior of a Unit, the Body Corporate shall if practicable accommodate the wishes of the Owner of that Unit as to the standard and finish required by that Owner as advised to the Body Corporate in writing prior to any such work being undertaken.

5.2While  the  Body  Corporate  is  hereby  charged  with  making  the  final  decisions concerning the implementation of this scheme, it shall have regard to professional advice and consult with its advisors and record the reasoning by which its decisions were reached.

6.         Levies

6.1The Body Corporate is hereby authorised to levy (“Levy”), and collect from each Owner from time to time such money as the Body Corporate deems necessary for undertaking, progressing or completing the Repairs. For clarity the right to levy includes levies based on reasonable interim or estimated costings, the issue of several  progressive  levies,  or  to  reassess  and  vary levies  in  light  of  changing circumstances, and may include reasonable estimates and allowances or provisions for then unknown factors or anticipated Costs.

6.2Without limiting the generality of the above, the Body Corporate has the authority to:

(a)       Seek advice from suitably qualified advisors on the basis to be adopted for any apportionment of Costs;

(b)To demand payment of such Levies from each Owner in amounts and at times that the Body Corporate may from time to time determine .

(c)       To sue for and take such other steps as the Body Corporate deems advisable to recover from any Owner who fails to pay their Levies in the amount and at the time determined by the Body Corporate.

(d)Where possible to attach the amount due under any such Levy to the Unit of which the Owner is the Registered Proprietor, to the intent that such Levy, shall until satisfied in full, remain a charge against such Unit notwithstanding that a change of Owner or charge holder may subsequently occur.

(e)       To generally have the same powers with regard the collection and recovery of Levies in respect of each Unit, including the right to charge interest and any collection costs (including legal costs), from each Owner that the Body Corporate has under the Act for the recovery of levies for repairs and maintenance to common property.

(f)       To determine any refunds that may be payable to an Owner or Owners and to determine when such refunds should be made.

6.3Any levy raised under this Scheme shall have the same legal status as a levy validly raised under s15 of the Act.

7.        Levy defaults and refunds

7.1If, for whatever reason, insufficient funds are received to make the Repairs within the time planned, then the Body Corporate may Levy each Owner in order to meet the shortfall, in such proportions as are determined from time to time by the Body Corporate.

Levies can involve short term advances by Owners to cover cash flow requirements as the Repairs progress.

Such a situation could arise when there is a need to provide funds that a defaulting

Owner has failed to make.

A Levy on other Owners to cover unpaid Levies of a defaulting Owner will be calculated pro rata on the basis of excluding that defaulting Owner from calculation

of the apportionment.

7.2If any Owners have been required to pay a Levy to cover the amount of a Levy that defaulting Owner has failed to pay, the Body Corporate shall apply any funds received from the defaulting Owner first towards refund the non-defaulting Owners their proportionate share either by paying the funds to the Owner or by transferring the funds into the account of that non-defaulting Owner to set off against all or part of Levies made on that non-defaulting Owner.

7.3If an Owner fails to pay a Levy in the amount and at the time required by the Body Corporate, that Owner shall be liable for any losses and for all associated and additional  costs,  expenses and  disbursements  resulting from such  non-payment (including all costs incurred by the Body Corporate in attempting to recover the outstanding Levy and associated costs.

8.         Financing

The Body Corporate is authorised to borrow money from third parties to enable it to fund Repairs on such terms as the Body Corporate determines.   If the Body Corporate does borrow money, the interest and any other fees and expenses whatsoever payable pursuant to any loan or security document for such borrowing shall be treated as a Cost of the Repairs and as such will be included in and form part of any Levy.  If a reason for the Body Corporate borrowing money is to cover a defaulting Owner’s unpaid Levy, then so much of the principal, fees, interest, costs  and  expenses  as  relate  to  that  defaulting  Owner’s  unpaid  Levy  may  be charged to that Owner.

9.         Use of Funds

9.1       Any funds received pursuant to Levies for Repairs shall be used to pay for Costs of

Repairs, including:

(a)       Payment  of  fees,  charges,  costs  and  expenses  in  respect  of  advice undertaken from time to time to progress the Repairs and this scheme;

(b)       Payment  of  all  contractors,  tradespersons  and  others  engaged  in  the

Repairs;

(c)       Payment  for  all  reports,  consents,  permits  insurance  and  other  matters required by local government and other authorities;

(d)Payment of such other fees and charges interest or other outgoing incurred in operating this scheme.

For clarity, while all moneys received shall be used to pay the Costs of Repair, the moneys received pursuant to a particular Levy need not be disbursed in payment of the Costs on which that Levy was assessed.

10.       Allocation of Costs

10.1Where Repairs can be identified with a specific Unit, the Cost of such Repairs shall be borne by the Owner or Owners of that Unit.

10.2Where Repairs are carried out to Common Property, the provisions of the Act shall apply.

10.3Subject  to  any specific  provision  to  the  contrary in  this  scheme,  where repairs involve both Units and Common Property, the Cost of such Repairs shall to the extent possible be apportioned to each Owner on the basis of that owner’s legal title to part of the Building.

11.       Accounting

11.1The Body Corporate shall keep all funds paid by an Owner under this scheme in a separate named account identifiable to the Owner until such time as the funds are paid out by the Body Corporate pursuant to this scheme.  An Owner shall have no right to demand a return of any funds credited to that Owner’s account until such time as the Repairs are completed in full.

11.2The Body Corporate will keep a permanent and up to date record of payments made and received pursuant to this scheme and in relation to Repairs to both the Common Property and the Units.

11.3The Body Corporate is authorised to pay from an Owner’s account that Owner’s proportion of any moneys payable pursuant to this scheme from time to time as determined by the Body Corporate.

11.4The Body Corporate is authorised to adjust the various Owner accounts from time to time in the case of corrections or reassessments to payments made.

12.       Reporting

12.1The Body Corporate will keep each Owner fully appraised of details of the Repairs and progress of same over the period of the scheme by reporting not less than every two months.

12.2     Reports to the individual account holder shall include:

(a)     A report on the overall position both in progress of Repairs and financial terms, details of costs and apportionments;

(b)A statement of the position of each Owner’s account detailing any arrears, money received and money paid out;

(c)     A final report on the Repairs eventually undertaken as part of the scheme, the Costs incurred and how they were apportioned.

The Body Corporate is empowered to disclose to all Owners information regarding the proportion of Costs payable and the Levies paid by each Owner.

13.       Dispute resolution

13.1The Body Corporate’s decision shall be final in all respect all matters arising under this scheme, except where 5 or more Owners whose objection in monetary value cumulatively exceeds $30,000, or where one Unit Owner has an objection which in monetary terms exceeds $10,000.  Upon receiving notice of such an objection, the Body Corporate shall refer the matter to arbitration.

13.2The objecting Owners must give notice to the Body Corporate of their objection within 15 working days of receiving an assessment as to Costs or other notice from the Body Corporate which is the subject of the objection outlining the grounds on which such objection is made.  On receipt of the notice the Body Corporate will refer the matter to an arbitrator (to be appointed by the President of the Quantity Surveyors Association) and the arbitrator shall determine the issue under the provisions of the Arbitration Act 1996.  The arbitrator’s decision shall be final and the costs of the arbitration shall be borne as between the objecting Owners and the other members of the Body Corporate generally as the arbitrator shall decide.

13.3No Owner shall be entitled to withhold payment of a Levy on the basis that the matter is in the process of dispute resolution.

14.       Insurance

14.1The Body Corporate will ensure that its interest as agent for the Owners is noted on the contractors all risk insurance policy and that the Body Corporate insurers are properly advised of the Repairs, and noted on the Body Corporate policies of insurance and will ensure the premiums are paid appropriately.

15.       Indemnity

15.1The Owners jointly and severally indemnify and hold harmless the Body Corporate, its agents and members (jointly and severally) against all costs, expenses, claims and proceedings and any other liability of any sort incurred by them within the scope of any authority given by the Body Corporate in the exercise or attempted exercise of the powers granted to the Body Corporate under this scheme, but not any wilful misconduct or any act or omission that is carried out with gross negligence or with fraudulent intent.

15.2The Body Corporate and its members shall have no liability to any Owner or other party for the standard or extent of the Repairs or for any action they take, or any omission  to  take  any  action,  in  any  work  associated  with  the  Repairs  or  this scheme.  Nor shall they be liable for any claim as to the level, extent, or necessity of any Repair or the Cost incurred for any Repair.

16.       Owner’s Transfer of Property

16.1If an Owner sells or transfers his or her interest in a Unit before the Repairs are completed and paid for, the vendor Owner shall remain bound by the terms of this scheme and shall remain liable to pay the Levies on that Unit, (being both current and future Levies), including without limitations the requirement to contribute to

any shortfall in funds necessary to remedy the Repairs, to the extent that any purchaser Owner of that Unit fails to pay such Levies.

16.2Any purchaser of a Unit shall be bound by the terms of this scheme on being registered as the Owner of that Unit, and obliged to pay all then outstanding and future Levies.

16.3Any agreement to sell a Unit to a third party must disclose the existence of this scheme and the Repairs being undertaken pursuant to the scheme, and inform an intending purchaser of their liability under the scheme.

16.4The Body Corporate is authorised to disclose to persons interested in purchasing a Unit such details of the Repairs, Costs and Levies in relation to the scheme as a whole as well as it relates to the Unit being offered for sale.

17.       Joint and Several Ownership

17.1Where an Owner comprises more than one person and/or entities then: (a) All such persons are deemed one Owner; but

(b)The  provisions  of  this  scheme  shall  jointly  and  severally  bind  the individual persons comprising any such Owner.

18.       Owner Obligations

18.1Each Owner shall ensure access to their particular Unit as required, by any person in the process of assessing damage or in implementing or inspecting Repairs from time to time

18.2Each Owner is responsible for protecting their contents, pets and other personal belongings within their Unit from any harm or damage that may occur as a result of the Repairs being carried out, other than harm or damage arising as a result of any reckless or negligent act of any contractor or any authorised person carrying out the Repairs.  Each Owner will comply with any reasonable request from any contractor to remove contents, pets and other personal belongings to allow the contractor to undertake any Repairs in their Unit in a timely manner.

19.       Authority

19.1No third person dealing with the Body Corporate in relation to this scheme will be obliged to verify the Body Corporate’s authority hereunder.

20.       Interpretation

20.1     In this scheme, except to the extent that the context otherwise specifies:

Defined Terms

(a)      “Body Corporate Committee” means the committee from time to time appointed by the Body Corporate;

(b)     “Common Property” means the common property comprised in the Unit

Plan;

(c)      “Owner” means a person or persons registered as a proprietor of a stratum estate in a Unit or Units on the Unit Plan and includes any administrator, executor, successor, permitted assign or transferee of an owner;

(d)“Unit” means a principal unit as defined by the Unit Plan and unless the context otherwise requires includes all accessory units attached to that unit;

(e)      “Unit  Plan”  means  unit  plan  number  203267  (North  Auckland  Land

Registry);

General

(f)       Words denoting the singular include the plural and vice versa;

(g)       Reference to an Owner or Owners shall include their successors, executors, administrators and permitted assigns (as the case may be);

(h)Words   denoting   individuals   or   persons   include   bodies   corporate, partnerships, trusts and other recognised legal entities and vice versa;

(i)        Words denoting any gender include all genders;

(j)        Headings are for convenience only and do not affect interpretation;

(k)       References  to  any documents  or  agreements  include  references  to  that document or agreement as amended novated, supplemented, varied or replaced from time to time;

(l)        Anything which may be done at any time may also be done from time to time;

(m)      Any action taken may be reviewed and varied or amended from time to time;

(n)Terms defined in the body of this scheme shall bear the defined meaning throughout this scheme;

(o)Any obligation not to do anything includes an obligation not to suffer, permit or cause that thing to be done;

(p)       “Including” and similar words do not imply any limitation;

(q)Any covenant that binds any two or more persons or parties will bind each of them jointly and severally;

(r)        Any  obligation  or  deemed  authority  by  an  Owner,  which  is  properly something to be carried out wholly or in part by a company, shall be deemed  to  include  a  covenant  on  the  part  of  the  shareholder  of  that company to procure that the company carry out its activities in accordance with such obligation or deemed authority.

21.      Specific arrangement with Manchester Securities Ltd in respect of level 12

21.1Manchester Securities Limited (“Manchester”) is the Owner of the penthouse on level 12 of the Building.  This clause of the scheme provides for:

(a)      the carrying out of Repairs to level 12 as contemplated by the Building

Consent by Manchester; and

(b)     Manchester’s share of the total Cost of the Repairs of the entire Building.

21.2Manchester shall not be liable to pay more than 11.88% of the total Cost of the Repairs carried out pursuant to this Scheme provided however that any Costs incurred by Manchester in respect of project management consultants or other construction-related advisors that do not provide benefit to all other individual proprietors or the body corporate shall be borne solely by Manchester.   The costs in respect of project management consultants or other  construction-related  advisors  that  Manchester  contends  provide  a benefit to all individual proprietors (other than Manchester) or the body corporate shall be made available in writing, together with supporting documentation to the secretary of the body corporate.   Any dispute about whether benefit is provided to all individual proprietors (other than Manchester) or the body corporate shall be determined under the dispute resolution provisions of this Scheme.

21.3The Cost of Repairs to the Units and Common Property situated at level 12 of  the  Building  shall  be  separately  assessed  and  paid  by  Manchester, provided that Manchester shall give to and consult with the Body Corporate all documents and or information in connection with any design element, pricing, quantity surveyor’s or other review of prices, contracts and or sub- contracts with the intent that any works undertaken and to be paid by Manchester shall be transparent from the outset.

21.4Subject to clauses 21.1 and 21.2, the amount payable by Manchester on account of Repairs to the building other than the works to level 12 listed in clause 21.7 shall be 11.88% of the total Cost of Repairs less the cost of repairs assessed and paid for in accordance with clause 21.3.

21.5Manchester  may  appoint,  at  its  own  cost,  a  suitably  qualified  project manager to manage that part of the work required for level 12 that can reasonably be carried out separately from the Repairs carried out to the rest of the Building.

21.6The work that is separable from the main building contract includes the work described in the Building Consent that relates to the replacement or repair of the level 12 decks, balustrades, stone veneer cladding and roof (the “Manchester Work”).

21.7The Manchester Work shall be carried out under a separate building consent to be obtained by Manchester utilising as far as is practicable the existing plans, details and specifications from the Building Consent and shall include:

(a)       Removal of the existing planters;

(b)Removal of the existing handrail system and installation of a new handrail system in accordance with the construction details approved in the Building Consent;

(c)      Uplifting of the existing deck tiles and membrane, with the substrate to be prepared and a new screed laid to achieve 1 degree fall to sumps;

(d)     Removal of existing tiled landing;

(e)      Provision of a 100mm step down from the door threshold to structural heritage tiles RAK220 stone grey 600x900 on chair system

(f)      Removal of existing joinery, tightening and resealing of mitre corners, installation of new rubber seals and reinstatement to suit new cladding;

(g)      Inspection of existing framing decay and replacement of any framing in accordance with Drawing WD-27 and a maximum stud height of 3.2 metres as provided for in the Building Consent;

(h)Installation  of  new  stone  cladding  on  ventclad  drained  cavity  cladding system stone to be secured with Flexco “flexi-wall” two part system with additional stone clip mechanical fixings;

(i)      Removal of existing tiled landing;

(j)      Lifting  of  existing  door  to  provide  100mm  threshold  at  door  sill  with structural heritage tiles RAK220 stone grey 600x900 on chair system to be level with door sill;

(k)      Replication  of  corner  details  where  existing  or  new  stone  abuts proposed “alucobond” so far as is practicable;

(l)      Construction  of  all  inter-storey  junctions  so  far  as  is  practicable  in accordance with existing details with due allowance for following work in consultation with the Body Corporate’s architects;

(m)     Alteration of existing copper parapet cappings to penthouse to be altered to suit new construction (Building Consent detail 4.68 on Drawing DT-4.2);

(n)Retention of existing internal gutters to be retained subject to inspection of substrate for degradation;

(o)Installation of new membrane to moisture affected area of the roof and reformation of the substrate to provide new falls;

(p)Inspection of existing roof substrate signs of decay and replacement as appropriate to CD grade H3.1 plywood (thickness to match existing);

(q)Preparation of substrate in accordance with Ardex recommendations and specifications;

(r)      Reinstatement of existing air conditioning systems on new H3.2 tapered battens with membrane saddle;

(s)      Air conditioning unit fixings to have neoprene washers between bolt head & fixing point and between fixing point and membrane (Building Consent Detail 4.10 on drawing DT-4.3);

(t)      Replacement of existing parapet cappings and installation of new aluminium cappings with 10 degree fall;

(u)     Re-covering of existing roof hatch with new membrane; (v)         Butynol roofing to be patched and repaired as appropriate;

(w)     Upstands, penetrations, parapets and the like to be reformed in accordance with the details provided for in the Building Consent;

(x)Existing pipe penetrations to have 2 layer  membrane bandage flashings welded to pipe, and reinforcement of junction between pipe and roof (Detail

4.2 on Drawing DT-4.1);

(y)     All work incidental to the foregoing in accordance with the definition of

Repairs herein

21.8The remaining work required for the level 12 remediation should be confined so far as is practicable to the “Dimondek 400” and “Alucomat” re-cladding to be carried out at the time of the principal building work to the rest of the Building is carried out by the Body Corporate.

21.9The interaction between the level 12 work and the Repairs to the rest of the Building contemplates full co-operation between Manchester and the Body Corporate and any respective consultants.