Body Corporate 177519 v Lai - [2014] NZHC 3381

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-006408 [2014] NZHC 3381

BETWEEN
BODY CORPORATE 177519

Plaintiff

AND

YUEN HAN LAI and ORS First Respondents

ASB BANK LIMITED Second Respondent

Respondents continued over

Hearing: 16 - 18 June 2014

Counsel:

C Baker for the Plaintiff
M K Macnab for the Respondents

Judgment:

19 December 2014

JUDGMENT OF DUFFY J

This judgment was delivered by Justice Duffy on 19 December 2014 at 4.30 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

Counsel: M K Macnab, Auckland Solicitors: Price Baker Berridge, Waitakere Copies To: R P Kaur, Auckland
R S Wood, Auckland

BODY CORPORATE 177519 v LAI and ORS [2014] NZHC 3381 [19 December 2014]

ANZ BANKING GROUP (NEW ZEALAND) LIMITED Third Respondent

ANZ NATIONAL BANK LIMITED Fourth Respondent

BANK OF NEW ZEALAND Fifth Respondent

COUNTRYWIDE BANKING CORPORATION LIMITED (now trading as ANZ NATIONAL BANK LIMITED) Sixth Respondent

KOOKMIN BANK Seventh Respondent

LLOYDS TSB MERCHANT BANK LIMITED
Eighth Respondent

MORTGAGE HOLDING TRUST COMPANY LIMITED
Ninth Respondent

THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED Tenth Respondent

WESTPAC NEW ZEALAND LIMITED Eleventh Respondent

ALLIED PRIME FINANCE LIMITED Twelfth Respondent

NATIONAL AUSTRALIA FINANCE (ASIA) LIMITED
Thirteenth Respondent

GERALD ANTHONY MORTIMER Fourteenth Respondent

NEW ZEALAND INSURANCE LIMITED Fifteenth Respondent

DISTRICT LAND REGISTRAR Sixteenth Respondent

[1] The plaintiff is the body corporate of Hobson Gardens, an apartment complex consisting of two tower blocks on Hobson Street in central Auckland. Hobson Gardens is what is commonly known as a leaky building. As a step in curing this problem, the body corporate has applied under s 74 of the Unit Titles Act
2010 (“the 2010 Act”) to settle a scheme following destruction or damage (“the amended scheme”) to enable repair of the defects. This is the second such scheme for Hobson Gardens. Work under a proposed scheme had commenced but then ceased when the contractor responsible for the works, Mainzeal Property and Construction Limited (“Mainzeal”), went into liquidation.

[2] One of the first respondents, Ms Lai Chun Ko, has filed a notice of opposition to the application. She became the owner of unit 3H on 2 July 2008. The other respondents have taken no part in the proceeding.

[3] Mainzeal was also responsible for building Hobson Gardens. The body corporate and the majority of unit owners were parties in proceedings that were brought against Mainzeal and other defendants (“the plaintiff owners”). At mediation, the parties to those proceedings were able to settle and Mainzeal agreed to repair the entire complex. The value of the repair work was somewhere between approximately $11.5 and $15 million, though the settlement agreement between the parties records that Mainzeal would repair the building for $1 in exchange for discontinuance of the proceedings.

[4] The plaintiff owners argue that the owners, who were not parties to the proceedings against Mainzeal (“the debtor owners”) should pay the plaintiff owners compensation for obtaining a benefit under the settlement to which they were not a party. The amended scheme…

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.

Keep reading for free

Create a free CaseChat account to read Body Corporate 177519 v Lai and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2014] NZHC 3381
Decision Date: 19 December 2014

CaseChat Overview and Summary

The case involves the Body Corporate 177519, as plaintiff, against Yuen Han Lai and others, as respondents, regarding a scheme to repair defects in a building complex known as Hobson Gardens. The building was constructed by Mainzeal Property and Construction Limited, which subsequently went into liquidation. The body corporate had applied under the Unit Titles Act 2010 to settle a scheme for the repair of the building following the destruction or damage. The respondents opposed the application, arguing that they should not be required to pay compensation to the plaintiff owners for the benefit they received from the settlement agreement. The court had to determine whether the amended scheme proposed by the body corporate was appropriate and fair, and whether it was a justified departure from the scheme of the Act. The court found that the amended scheme was not fair as it imposed an additional burden on Mainzeal, and the benefit that resulted from the settlement and the partial repairs performed under the construction contract came about through a full and final settlement of the liability proceedings with Mainzeal agreeing to repair the defects of the entire complex. The court concluded that the amended scheme was not a justified departure from the scheme of the 2010 Act, and the current scheme does not achieve what is fair between the unit owners in the circumstances. The court ordered that the body corporate should attempt to reach a consensus on a new scheme to complete the repairs and make a fresh s 74 application if necessary.

Orders