Body Corporate 208399 v Lee - [2015] NZHC 2548

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-1640 [2015] NZHC 2548

UNDER The Unit Titles Act 2010

BETWEEN

BODY CORPORATE 208399
First Applicant

AND

DAVID RONALD THOMSON AND MARY ROSE THOMSON

Second Applicants

AND

YOUNG SAM KIM AND KEONGHEE LEE

First Respondents

AND

OTHER RESPONDENTS SET OUT IN A SCHEDULE TO THE APPLICATION

Hearing: 12 October 2015

Appearances:

D R Bigio for Applicants

Judgment:

16 October 2015

JUDGMENT OF KEANE J

This judgment was delivered by me on 16 October 2015 at 3pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Pidgeon Law, Auckland

BODY CORPORATE 208399 v THOMSON AND ORS [2015] NZHC 2548 [16 October 2015]

[1] Stoneybrook is a complex in Greenlane West, Epsom, comprising 57 two and three storey town houses in seven separate blocks. The body corporate was constituted under the Unit Titles Act 1972 on 11 September 2001. The complex received its final code compliance certificate on 11 March 2002.

[2] In July 2011 the body corporate resolved to have the complex reviewed after its weathertightness became a concern; and at a further meeting on 16 August 2011, with the benefit of a report relating to five units, resolved to lodge a claim with the Weathertight Homes Resolution Service. That claim was deemed eligible on 27
September 2011.

[3] On 15 April 2014, after receiving a more complete range of reports, including a survey to determine which parts of the exterior fabric were common property and which fell within unit boundaries, the body corporate resolved to apply to this Court for approval of a scheme under s 74 of the Unit Titles Act 2010.

[4] The application has been served on all the respondents, 57 of whom are the present registered owners of the units, seven of whom are the existing mortgagees and the last of whom is the body corporate’s insurer. The application has not evoked any opposition or indeed any formal response.

[5] On such an application three issues arise.1 Has the building been damaged or destroyed? If it has, is the scheme proposed appropriate in the circumstances? If it is what are the terms of the scheme to be?

Section 74 power

[6] This Court has power under s 74 of the Unit Titles Act 2010 to settle by order a scheme, on the application of a body corporate, “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

1 Tisch v Body Corporate 318596 [2011] NZCA 424; affirmed in St John’s College Trust Board v
Body Corporate 197230 [2013] NZCA 35.
2 Unit Titles Act 2010, s 74(1).

[7] The scheme, which the Court then becomes entitled to settle, after hearing from any unit holders or any insurer wishing to be heard, may provide for reinstatement in whole or in part of the building or other improvement. The Court has the ability to make any orders…

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 208399 v Lee 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: [2015] NZHC 2548
Decision Date: 16 October 2015

CaseChat Overview and Summary

Body Corporate 208399 applied to the High Court of New Zealand for approval of a scheme to address extensive water ingress and damage to the exterior fabric of a residential complex in Greenlane West, Epsom. The complex, comprising 57 townhouses, had suffered damage necessitating a comprehensive response, with an estimated repair cost of $7,976,308. The application was unopposed. The court had to determine if the building had been damaged or destroyed, whether the proposed scheme was appropriate, and what the terms of the scheme should be.

The court found that the complex had suffered qualifying destruction, making a scheme essential. The scheme proposed by the Body Corporate was detailed, broadly supported by unit holders, and generally adhered to the Unit Titles Act 2010 and the Body Corporate's rules. The court noted that the scheme allowed for direct repair costs to be allocated to individual units and indirect repair costs and associated costs to be allocated according to ownership interests, a decision the Body Corporate had made at a general meeting. The court accepted that this was a fair and equitable basis for cost allocation.

The court approved the scheme, emphasizing that it was essential, appropriate, and enjoyed broad support. The scheme included provisions for the extent of repairs, the duties and obligations of the Body Corporate and unit owners, cost allocation, raising funds, entering into construction contracts, completion of the reinstatement project, recovery of unpaid contributions, transfer of units, management of funds, indemnity and liability, joint ownership, dispute resolution, mediation, arbitration, and leave of the Court.

Orders