Body Corporate 207812 v Singh

[2018] NZHC 1402

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-734

[2018] NZHC 1402

BETWEEN

BODY CORPORATE 207812

Applicant

AND

PRITHI PAL SINGH AND GENDO SINGH

First Respondents

Continued on next page

Hearing:	On the papers
Counsel:	J Wood for Applicant
Judgment:	13 June 2018

JUDGMENT OF WHATA J

This judgment was delivered by me on 13 June 2018 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Solicitors:           Rainey Law, Auckland

BODY CORPORATE 207812 v SINGH [2018] NZHC 1402 [13 June 2018]

AGNES BEATRIX GEE

Second Respondent

VERA TURNER
Third Respondent

PAUL SPENCER
Fourth Respondent

JACK MACNAY AND COLLEEN ROSEMARIE MACNAY
Fifth Respondents

ROBERT STEPHEN PETTY AND LINDA ELISABETH FINDLAY

Sixth Defendants

LYN KINGSNORTH AND ROY KINGSNORTH

Seventh Respondents

MURIEL MAY TURNER
Eighth Respondent

DOUGLAS GEOFFREY

BAMFORTH, ELIEEN BAMFORTH AND SCO TRUSTEES NO 1

LIMITED
Ninth Respondents

JANET KWAI YING NICHOLLS, MARK STEVEN NICHOLLS, TINA MARIE NICHOLLS AND VIV TAMA NICHOLLS

Tenth Respondents

DARIO EDUARDO MASUTTI, SHELLY ANNE GOODFELLOW

AND VULCAN TRUSTEE CO (2012) LIMITED
Eleventh Respondents

S.T.A.R.T. INVESTING IN PROPERTIES LIMITED Twelfth Respondent

TRACEY ANN LIPPARD
Thirteenth Respondent

JANET AMANDA FORBES

Fourteenth Respondent

ROSS WILLIAM NUNN
Fifteenth Respondent

HAIQING WANG
Sixteenth Respondent

ASHINTULLY LIMITED
Seventeenth Respondent

DOUGLAS THOMAS BICKLEY

Eighteenth Respondent

PETER BARRY KIVELL AND GC TRUSTEE SERVICE LIMITED
Nineteenth Respondent

STEPHEN JOHN WALLACE
Twentieth Respondent

BRENDON LESLIE HAWORTH AND ALISON MAY HAWORTH
Twenty First Respondents

MICHAEL JOHN McGOUGAN AND McGOUGAN TRUSTEE LIMITED

Twenty Second Respondents

THOMAS IAN CURTIS DONALD AND ROBERT ALLAN DONALD

Twenty Third Respondents

JOYCE MADELINE DAVIES AND LEWIS CALLANAN TRUSTEES LIMITED

Twenty Fourth Respondents

AK INVESTMENT PROPERTIES LIMITED
Twenty Fifth Respondent

STEPHEN JOHN WHEELER, AMANDA JANE WHEELER AND MICHAEL JAMES WHEELER

Twenty Sixth Respondents

DOREEN MAY WALKER
Twenty Seventh Respondent

KEITH REGINALD INGER AND BAVAGE CHAPMAN TRUSTEES LIMITED

Twenty Eighth Respondents

SANDRA KAY HILL AND SARA KATIE DEVENIE

Twenty Ninth Respondents

JAMES DEREK MARSHALL,
PENELOPE JANE MARSHALL AND JAMES DOMINIQUE MARSHALL

Thirtieth Respondents

BRONWEN McPHERSON AND NICOLE ANN DOMETT

Thirty First Respondents

DAVID ROBERTSON BENTHAM, ROBYN MARIE BENTHAM AND SUSAN MARY KINGSTON

Thirty Second Respondents

ANN LOIS MILNER BUSSE AND CHANTEL LOUISE WRIGHT

Thirty Third Respondents

ROY SWANNACK AND MYRTLE DORA SWANNACK (DECEASED)

Thirty Fourth Respondents

MAVIS LIMBRICK
Thirty Fifth Respondent

CAROLE ANN O’LEARY AND DANIEL MICHAEL O’LEARY

Thirty Sixth Respondents

HEATHER PATRICIA HOWARTH, CHARLES ANDREW HOWARTH, PATRICIA JILL HOWARTH AND HOWARTH FAMILY TRUSTEE

COMPANY LIMITED
Thirty Seventh Respondents

GJCEE LIMITED
Thirty Eighth Respondent

JANET ELIZABETH SCRYMGEOUR, MARGARET ANN SCRYMGEOUR AND HORROCKS HAMPTON TRUSTEE COMPANY LIMITED

Thirty Ninth Respondents

MAVIS PATRICIA KING
Fortieth Respondent

STEPHEN JOHN CROSS AND IRENE MARY CROSS

Forty First Respondents

JACQUELINE MICHELLE TOBIN AND SHARON JOANNE BYRNE

Forty Second Respondents

NAM KYU CHOI AND JEONG SOON CHOI

Forty Third Respondents

ROY TERENCE HARDING AND REBECCA JANE CARE
Forty Fourth Respondents

SEOK HEON LEE

Forty Fifth Respondent

ALICE JANE YOUNG, LINDA-JEAN YOUNG AND WEBB FARRY
LIMITED
Forty Sixth Respondents

EMERALD GREEN INVESTMENTS LIMITED

Forth Seventh Respondent

MICHAEL McHARDIE BERRY AND STEPHANIE ANNE BERRY
Forty Eighth Respondents

ALLEN BRIAN McCLYMONT AND EVANGELIA McCLYMONT
Forty Ninth Respondents

ROBERT EDWARD HAMER

Fiftieth Respondent

ROSEMARIE WINIFRED WALTERS

Fifty First Respondent

CORINNE FRANCES EDGAR AND PHILIP REGINALD ANDERSON
Fifty Second Respondents

PATRICIA’S LEGACY LIMITED
Fifty Third Respondent

COLIN JOHN TILLEY, PETRINA LEE TILLEY AND JOHN M VINCENT TRUSTEE CO LIMITED

Fifty Fourth Respondents

LUCILLE BRENDA BERLAND MELDRUM
Fifty Fifth Respondent

CLARENCE ROBERT YOUNG
Fifty Sixth Respondent

VANESSA ELIZABETH SKEEN
Fifty Seventh Respondent

DIVERS R US LIMITED

Fifty Eighth Respondent

DARIO MASUTTI AND COLLEEN JUDITH MASUTTI
Fifth Ninth Respondent

GWENOLYN PAYNE
Sixtieth Respondent

JOHN McGEOCH SWAN
Sixty First Respondent

BANK OF NEW ZEALAND
Sixty Second Respondent

WESTPAC NEW ZEALAND LIMITED

Sixty Third Respondent

ANZ NEW ZEALAND LIMITED

Sixty Fourth Respondent

GUY DENBY DOMETT
Sixty Fifth Respondent

THE HONGKONG AND SHANGHAI BANKING CORPORATION

Sixty Sixth Respondent

ASB BANK LIMITED
Sixty Seventh Respondent

KIWIBANK LIMITED
Sixty Eighth Respondent

MICHAEL EDWARD WALTERS, SHIRLEY ELIZABETH WALTERS, LINDA LOUISE RYAN, MICHAEL GRANT RYAN, CHRISTINE MAY COOMBRIDGE, BRENT ALAN

COOMBRIDGE

Sixth Ninth Respondent

VERO INSURANCE LIMITED
Seventieth Respondent

[1]                  This is an originating application made by the Body Corporate of a complex known as the Bay Palms Apartment. The Body Corporate seeks orders to settle a scheme for repairs. The application is supported by detailed affidavit evidence filed by Bronwen McPherson, Chair of the Body Corporate and Barry James Gill, building surveyor. The application has been served on all respondents, being persons with an interest in the application. The matter was called before me as Duty Judge. One of the owners had indicated opposition to the application if certain requests were not met. That owner did not, however, attend the call. I made timetabling orders in the owner’s absence. It transpires that shortly after the call, the applicants were advised that the application is not opposed. I therefore proceed on the basis that the application is not opposed.

Background

[2]                  The Weathertight Homes Resolution Service has assessed the Bay Palms complex and found several systemic weathertightness deficiencies, as well as the likelihood of further deterioration unless significant repairs are undertaken. Mr Gill confirms that the defects identified by the Service are present in the building. He also confirms that the scope of repairs detailed in Context’s Architect plans for tender (attached as an exhibit to Ms McPherson’s affidavit) are sufficient and required to address and remediate the problems in the building.

[3]                  As a result, the Body Corporate now seek an order for a scheme of repairs pursuant to s 74 of the Unit Titles Act 2010. There are 70 respondents to the application. The majority are owners of units in the building. The remainder of respondents are the mortgagees of units, and the insurer of the building. None of the respondents have filed opposition to the application for an order. One of the mortgagees, Westpac, has responded advising it will abide by the decision of the Court. Ms McPherson confirms that a copy of the proposed scheme was circulated at an AGM on 13 March 2018, and all but two owners present voted in favour of it.

Legislation

[4]Section 74 of the Unit Titles Act provides:

74       Scheme following destruction or damage

(1)This section applies if any building or other improvement comprised in any unit or on the base land is damaged or destroyed, but the unit plan is not cancelled.

(2)The High Court may, by order, settle a scheme on the application of—

(a)the body corporate; or

(b)if the unit title development is in a layered unit title development, the body corporate of the head unit title development or any subsidiary unit title development in that layered unit title development; or

(c)an administrator; or

(d)the owner or one of the owners of a unit; or

(e)a registered mortgagee of a unit.

(3)A scheme under subsection (2) may include provisions—

(a)for the reinstatement in whole or in part of the building or other improvement; or

(b)for the transfer of units to the body corporate so as to form part of the common property.

(4)If an order is made under subsection (3)(b), sections 58(1)(c) and 59 apply to the transfer, so far as applicable, but subject to any order of the High Court to the contrary.

(5)A notice of any application made under subsection (2) must be lodged with the Registrar who must enter on the supplementary record sheet a notification that the application has been made.

(6)On any application to the High Court under subsection (2), the following persons have the right to appear and be heard:

(a)any person having or claiming to have any estate or interest in any unit or in the whole or part of the base land; or

(b)any insurer who has effected insurance on the buildings or other improvements comprised in any unit or in the whole or part of the base land.

(7)In the exercise of its powers under subsections (2) and (3), the High Court may make any orders that it considers expedient or necessary for giving effect to the scheme, including orders—

(a)directing the application of any insurance money; or

(b)directing payment of money by or to the body corporate or by or to any person; or

(c)directing the deposit of an appropriate new unit plan; or

(d)imposing any terms and conditions that it thinks fit.

(8)The High Court may cancel, vary, modify, or discharge any order made by it under this section.

(9)The High Court may make any order for payment of costs that it thinks fit.

Orders sought

[5]                  The Body Corporate has submitted a copy of their proposed scheme for repairs (attached as Schedule A). In short, it provides:

(a)The Body Corporate is to reinstate the entirety of the building;

(b)The Body Corporate has all powers necessary to carry out and obtain a building consent for the repairs, including the ability to raise a levy to pay for the repairs, and borrow funds should a unit owner fail to pay levies;

(c)The Body Corporate must make decisions in furtherance of the repair scheme in accordance with the Unit Titles Act;

(d)The Body Corporate have accounting and reporting obligations imposed upon them;

(e)The Body Corporate members indemnify the Chair and Committee members for acts or omissions done in furtherance of the scheme, except for wilful misconduct or gross negligence.

Assessment

[6]                  The Court of Appeal in Tisch set out principles relevant to the granting of orders for a repair scheme:1

1      Tisch v Body Corporate No 318596 [2011] NZCA 420, [2011] 3 NZLR 679 at [45]-[49].

(a)A scheme with broad support is to be preferred;

(b)The scheme should be appropriately detailed;

(c)A scheme may be retrospective;

(d)Work should be done to the same standard and at the same time across the complex; and

(e)The terms of the scheme should depart from the Unit Titles Act and the Body Corporate rules no more than necessary.

[7]                  I am satisfied that each of these matters are appropriately addressed by the proposed scheme. In addition to the matters already noted at [6]:

(a)All but two of owners endorsed the scheme at a recent AGM.

(b)The scheme is sufficiently detailed to enable the repairs to be undertaken in accordance with the Act.2

[8]                  Subject to the applicants confirming that the scheme tabled at the March AGM is the same scheme submitted for approval, I order that the repair scheme sought by the Body Corporate is approved.

2      It is substantially similar to the schemes approved by this Court in Body Corporate 378351 v ANZ Bank New Zealand Ltd [2017] NZHC 2274; Body Corporate 85115 v Middlemiss [2017] NZHC 1906.