Body Corporate 209538 v McDonnell - [2024] NZHC 1413

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-378

[2024] NZHC 1413

UNDER the Unit Titles Act 2010

IN THE MATTER

of an originating application for a scheme pursuant to s 74 of the Unit Titles Act 2010

BETWEEN

BODY CORPORATE 209538

Applicant

AND

WAYNE JOHN MCDONNELL, ANNE EVELYN MCDONNELL and BRUCE CYRIL MCNIECE

First Respondents

SARAH ANNE JOSLING
Second Respondent

CHRISTOPHER JOHN BADDELEY
Third Respondent

…/cont

Hearing: 30 May 2024

Appearances:

J Kohu-Morris for the Applicant

Judgment:

31 May 2024

JUDGMENT OF GORDON J

This judgment was delivered by me on 31 May 2024 at 3 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:
Thomas Gibbons Law, Hamilton

BODY CORPORATE 209538 v MCDONNELL [2024] NZHC 1413 [31 May 2024]

YUNHUA LIU
Fourth Respondent

JORGE DANIEL DOMINGUEZ HORMAZABAL and MARCELO OSMAR GONZALEZ
Fifth Respondents

PKM LIMITED
Sixth Respondent

GHUZNEE HOLDINGS LIMITED
Seventh Respondent

HANK TSUNG-HAN LEE and PEI-WEN SUN
Eighth Respondents

KTHB TRUSTEE LIMITED
Ninth Respondent

JOE WEI CHANG and KHARAMIA ENRIQUEZ-LOZANO
Tenth Respondents

GHUZNEE HOLDINGS LIMITED
Eleventh Respondent

GARY WILLIAM BRUNSDON
Twelfth Respondent

DANNIELLE KATHERINE ANN SAVAGE
Thirteenth Respondent

LAURANNE MICHELLE CROOT
Fourteenth Respondent

DANIEL RAY SHEARER
Fifteenth Respondent

GHUZNEE HOLDINGS LIMITED
Sixteenth Respondent

BRATTON INVESTMENTS LIMITED
Seventeenth Respondent

MORTGAGE HOLDING TRUST COMPANY LIMITED
Eighteenth Respondent

ANZ BANK NEW ZEALAND LIMITED
Nineteenth Respondent

WESTPAC NEW ZEALAND LIMITED
Twentieth Respondent

BANK OF NEW ZEALAND
Twenty-First Respondent

VERO INSURANCE NZ LIMITED
Twenty-Second Respondent

[1] The applicant, Body Corporate 209538, applies by way of originating application for an order settling a scheme under s 74 of the Unit Titles Act 2010 (the Act).

[2] The application proceeded by way of formal proof as all relevant parties have been served and no opposition has been filed.

Background

[3] The complex is situated at 97 Mokoia Road, Birkenhead, Auckland. There are two blocks of units with a total of 17 principal units and 17 accessory units.

[4] The chairperson of the Body Corporate, Sarah Josling, who also owns a unit in the complex, has sworn an affidavit in support of the application. She says that from around 2016 or 2017 she became aware of weathertightness issues with some of the units in the rear block of the complex. She says those units seemed to have been damaged from water ingress. The Body Corporate initially thought these issues could be dealt with by way of targeted repairs. However, over time it became evident that more significant repairs might be necessary.

[5] Accordingly, in early 2020 the Body Corporate engaged Veron Building Consultants Ltd (Veron) to begin an assessment of the damage. The Body Corporate also engaged Harry Dillon of Saltire Consultants at around the same time to help manage the process of remediating the damage.

[6] Ms Josling annexes a copy of the report from Veron dated 3 July 2020 which confirms that the complex has been damaged by water ingress, and that extensive remedial works are necessary to…

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: [2024] NZHC 1413
Decision Date: 31 May 2024

CaseChat Overview and Summary

Body Corporate 209538 applied for an order under section 74 of the Unit Titles Act 2010 to approve a scheme for the repair and remediation of a unit title development at 97 Mokoia Road, Birkenhead, Auckland. The application was unopposed, and all unit owners had consented to the proposed scheme. The court had to decide whether the building had been damaged or destroyed, whether a scheme was appropriate, and if so, what the terms of the scheme should be. The court found that the building was significantly damaged and that a scheme was appropriate given the unanimous support of the unit owners and the necessity for coordinated and cohesive remedial works. The scheme was detailed, had broad support, and provided for work to be done to the same standard and at the same time. Although the scheme required the Body Corporate to be responsible for repairs to both common and unit property, the court found this departure from the Act to be fair and necessary in the circumstances.

The court granted the application on the terms set out in the scheme annexed to the judgment, allowing the Body Corporate to proceed with the repair and remediation works as proposed. The scheme provided for the Body Corporate to act as the irrevocable agent of each unit owner, coordinate the repairs under a single works contract, and levy contributions from owners based on their utility interest. The scheme also required unit owners to cooperate with the Body Corporate, disclose the scheme when selling or transferring their unit, and ensure all levies were up to date.

Orders