Body Corporate 207650 v Speck - [2017] NZHC 1636

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-3079 [2017] NZHC 1636

UNDER Section 74 Unit Titles Act 2010

BETWEEN

BODY CORPORATE 207650
Applicant

AND

KATY SPECK RYAN SPECK First Respondents

CHERYL SINGH Sixteenth Respondent

ESTHA SIMPSON and EDWARD SIMPSON

Thirtieth Respondents

Hearing: On the papers

Appearances:

J McBride for 16th and 30th Respondents/Applicants
T J G Allan for Body Corporate 207650 / Respondent

Judgment:

17 July 2017

JUDGMENT OF LANG J [on costs]

This judgment was delivered by me on 17 July 2017 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

BODY CORPORATE 207650 v SPECK [2017] NZHC 1636 [17 July 2017]

[1] On 12 May 2017, I delivered a judgment in which I dismissed an application by the 16th and 30th respondents for an order declaring ultra vires two levies that the Body Corporate 207650 (the body corporate) had imposed on unit owners in the Richmond Terraces apartment complex.1 The levies in question were approved by resolutions passed at extraordinary general meetings of unit owners in the complex.

[2] The parties have been unable to reach agreement regarding costs. I am now required to determine that issue on the basis of memoranda filed by both counsel.

[3] The body corporate seeks an award of either indemnity or increased costs. It therefore seeks costs totalling $76,435.30. This sum includes disbursements of
$$22,630.30 excluding GST. Of that sum, $21,416.10 relates to invoices rendered by expert witnesses that the body corporate engaged in relation to the respondents’ application.

[4] The respondents oppose any award of indemnity or increased costs. Although the memorandum filed by their counsel does not expressly confirm this, I take the respondents’ position to be that any award of costs in favour of the body corporate should be calculated on a category 2B basis.

Background

[5] On 8 August 2016, Gilbert J granted an application by the body corporate for orders under s 74 of the Unit Titles Act 2010 (the Act) approving a scheme to carry out repairs to both residential units and common areas within the complex.2 The scheme reserved leave to all parties to seek further orders from the Court in the event that the implementation of the scheme gave rise to disputes.

[6] The 16th and 30th respondents took the view that two levies imposed by the body corporate related to work carried out on the complex fell outside the terms of the scheme approved by the Court. For that reason they filed an interlocutory
application seeking an order that the levies were ultra vires.

1 Body Corporate 207650 v Speck [2017] NZHC 966.
2 Body Corporate 207650 v Speck [2016] NZHC 1826.

[7] In my judgment I held that the scheme authorised the body corporate to undertake, and impose levies to meet the cost of, all work necessary to ensure the complex was remediated to a code compliant state.3 I concluded that all of the work in respect of which the levies were…

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: [2017] NZHC 1636
Decision Date: 17 July 2017

CaseChat Overview and Summary

In the High Court of New Zealand, Body Corporate 207650 sought an order declaring two levies imposed on unit owners within the Richmond Terraces apartment complex to be ultra vires. The respondents, including Katy Speck, Cheryl Singh, and Edward Simpson, opposed the application, arguing that the levies were outside the scope of a scheme approved by the Court. The Court dismissed the application, finding that the levies were within the scope of the scheme. The parties were unable to reach an agreement regarding costs, and the Court was required to determine the issue on the basis of memoranda filed by counsel.

The body corporate sought an award of either indemnity or increased costs, arguing that the respondents' challenge to the levies amounted to a pre-emptive strike to prevent the body corporate from collecting the levies. The body corporate contended that it fell within the scope of s 124(2) of the Unit Titles Act, which permits the recovery of unpaid levies, together with any reasonable costs incurred in collecting the levy, as a debt due to the body corporate. The respondents opposed any award of indemnity or increased costs, contending that their application was bona fide and that they brought the application to seek clarity about the scope of the scheme and whether further levies were justified.

The Court found that the respondents' application was not filed in order to seek clarity about cost overruns, but to challenge the validity of the levies the body corporate had approved. The Court held that the body corporate was entitled to rely on the approach taken in several recent cases, including Black v ASB Bank Ltd, which permitted the bank to recover all costs and expenses associated with enforcement of its rights. The Court held that the body corporate was entitled to recover its reasonable solicitor/client costs, together with its reasonable disbursements. The Court did not fix the quantum of costs and disbursements at that stage and directed the parties to endeavour to reach agreement on that issue. If they could not, the costs sought by the body corporate were to be taxed under Subpart 2 of Part 14 of the High Court Rules.

The Court made an order that the respondents were jointly and severally liable to pay to the body corporate its reasonable solicitor/client costs, together with its reasonable disbursements. The parties were to endeavour to reach agreement on the quantum of costs and disbursements. If they could not, the costs sought by the body corporate were to be taxed under Subpart 2 of Part 14 of the High Court Rules. Rule 14.23 provided a right of review of the Registrar's decision.

Orders