Body Corporate 173457 v Despy - [2012] NZHC 1589

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-044-999 [2012] NZHC 1589

BETWEEN BODY CORPORATE 173457
Plaintiff

ANDJOY FLORENCE DESPY AND GARY JAMES DESPY
Defendants

Hearing: 11 May 2012

Appearances: Mr Bowler for plaintiff
Mr Bennett by consent for first and second named defendants

Judgment: 19 July 2012

JUDGMENT OF ASSOCIATE JUDGE DOOGUE

This judgment was delivered by me on
19.07.12 at 10 a.m., pursuant to
Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:
Grove Darlow & Partners, P O Box2882, Auckland – trentb@grovedarlow.co.nz
J Despy and G Despy, 109 Roseberry Avenue, Birkenhead, Auckland

BODY CORPORATE 173457 V DESPY HC AK CIV-2010-044-999 [19 July 2012]

[1] This proceeding started life in the District Court at the North Shore. It was later transferred to the High Court.

[2] The parties had already been involved in proceedings in the District Court on the one previous occasion, which resulted in judgment being entered against the defendants for the amount of $70,493.95.

[3] The background to the proceedings is that the defendants own one of the apartments, Unit D in a complex at 68 Mokoia Road, Birkenhead, Auckland. The property was discovered to be subject to water ingress. The Body Corporate (the plaintiff in this case) took steps to have the property repaired. Both privately owned parts of the property and common property required repairs.

[4] In order to expedite the repairs, the plaintiff sought and obtained from the High Court an order approving a scheme under s 48 of the Unit Titles Act 1972 (“the Scheme”).

[5] Dealing with this matter has not been easy for several reasons. Even though the proceeding does not involve a very large sum, the litigation has gone on for over a year and a half, and several hundred pages of documents have been filed. A large volume of documents have been filed. Many documents that are not legally admissible have found their way onto the file. The difficulties were compounded by the fact that the defendants have changed legal advisors on several occasions and did not have counsel at the hearing. Further, the plaintiff did not provide a comprehensive indexed and paginated bundle of all the pleadings for the hearing. It produced a bundle containing only those documents that it had filed itself.

[6] While the defendants were not represented by legal counsel at the hearing before me, the situation was relieved to some extent when the first defendant sought leave for Mr Bennett to represent her. I granted leave for that to occur, even though Mr Bennett does not hold a current practising certificate. He is, however, a qualified lawyer who has some litigation experience. The result was that the Court was assisted by Mr Bennett’s submissions. As a result of his assistance, the scale of the

matters that were disputed was reduced to a manageable level and presented in a coherent order. I should add that the second defendant told me that he would ally himself with the submissions that…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] NZHC 1589
Decision Date: 19 July 2012

CaseChat Overview and Summary

Body Corporate 173457 commenced proceedings in the District Court against Joy Florence Despy and Gary James Despy seeking to recover costs relating to water ingress issues at Unit D, 68 Mokoia Road, Birkenhead. The case was subsequently transferred to the High Court. The plaintiff sought to recover a balance of a special levy of $7,316.80, $1,162.58 of solicitor and client costs, interest on unpaid levies of $4,817.42, and $967.50 in costs incurred by the Body Corporate Secretary in collating the information for debt recovery action, together with indemnity costs and interest on the first amount. The plaintiff contended that it was entitled to recover these amounts under the Unit Titles Act, the scheme approved under that Act, the Body Corporate rules, and the Body Corporate resolutions. The defendants argued that the final special levy was an unnecessary and excessive levy not authorised by the Scheme and that it was extinguished by money due and owing to them under a settlement agreement entered into between the plaintiff and the named unit owners of the plaintiff and the North Shore City Council. The court held that the defendants had not demonstrated an arguable defence. While the cost overruns spoken of really meant that the works had been to a greater extent than expected and accordingly, cost more than expected, the real issue was whether the defendants had a defence against the claim brought by the plaintiff. The fact that there had been cost overruns did not mean that the Body Corporate committee was not entitled to levy its members for the full amount. Once work had commenced, it had to be driven through to completion. The plaintiff had to deal with what was in front of it. The plaintiff had to seek clarification to the best of their ability of why the costs were mounting up and generally to advocate for the owners’ position when dealing with the contractors and retained professional advisers. It would have been unwise for them to waive any rights to revisit the matter of the costs explanations once all the work was completed. The very least that the plaintiff could do would be to keep open its rights to seek recovery of any excess of payment at some point in the future. The court held that the plaintiff should be granted leave to bring summary judgment proceedings as to liability only. Quantum had not been satisfactorily established.

Orders