Body Corporate 211747 v Gu - [2017] NZHC 2191

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2011-404-4415 [2017] NZHC 2191

UNDER the Unit Titles Act 2010

BETWEEN

BODY CORPORATE 211747
Applicant

AND

HAI MIN GU, JIAN HUA CHEN, QAYIUM ABDUL AND LUBNA ABDUL

Respondents

Hearing: 28 June,7 July and 21 -22 August 2017

Appearances:

G B Lewis and B J Mills for the Applicant
JPM Wood and J Heatlie for the Respondents

Judgment:

8 September 2017

INTERIM JUDGMENT OF MUIR J

This judgment was delivered by me on 8 September 2017at 4.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

Counsel/Solicitors:
G B Lewis, Grimshaw & Co, Auckland
B J Mills, Grimshaw & Co, Auckland
JPM Wood, Rainey Law, Auckland
J Heatlie, Rainey Law, Auckland

BODY CORPORATE 211747 v GU [2017] NZHC 2191 [8 September 2017]

Introduction

[1] Body Corporate 211747 (the Body Corporate), applies under s 74(8) of the Unit Titles Act 2010 (UTA) for an order varying or modifying earlier orders made by this Court under s 74 of the Act.

[2] The application relates to a four storey unit title development at 83 – 91 New North Road, Auckland known as the Up Town Apartments. The development consists of 60 residential units and five commercial units. Each of the commercial units and six of the residential units are located on the ground floor. On each of levels 1 – 3 there are 18 residential units. Car parking is located both on the ground floor and in the basement area.

[3] The respondents own four of the five commercial units. They oppose the

Body Corporate’s application which is supported by all other owners.

Background

[4] The Up Town Apartments were completed in about 2002. Typical of so many developments at that time, weathertightness issues were later discovered. In a report prepared towards the end of 2010, the Body Corporate’s consultants, Maynard Marks, identified significant moisture ingress and decay damage to the timber framing of the building. They recommended that it be fully reclad with replacement balcony membranes and that repairs be undertaken to framing and substrates damaged by the weathertightness issues.

[5] In July 2011 the Body Corporate applied to the High Court for an order for a scheme governing the repairs recommended by Maynard Marks.

[6] That scheme provided that with respect to:

1.the roof and basement repairs, all owners were to pay for the costs according to ownership interest;

2.the ground floor, the owners of the ground floor units would pay for the repairs to their units (including the exterior, substantial parts of which were common property)1 and otherwise the repairs to the ground floor (parking areas, lift access and fire egress) would be paid for by all owners in accordance with their ownership interest;

3.the first and third floors, the owners of the relevant units would pay for repairs in proportion to their ownership interest.2

[7] Accordingly, the costs apportionment provided for by the scheme did not exactly…

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 2191
Decision Date: 8 September 2017

CaseChat Overview and Summary

The Body Corporate 211747 (the Body Corporate) applied for a variation of an earlier order made by the High Court under s 74 of the Unit Titles Act 2010 (UTA). The Body Corporate sought to amend a scheme governing the repair of weathertightness issues and additional defects identified in a unit title development known as the Up Town Apartments. The respondents, owners of four of the five commercial units in the development, opposed the application. The Body Corporate sought to amend the cost allocation provisions in the scheme to require all owners to contribute to the cost of fire protection works and work to the extract risers. The respondents opposed this on the basis that the new defects were different in nature to the weathertightness issues and that it would be inequitable to charge the majority of the costs to the owners of the apartments on levels 1 – 3. The court held that the amendment to the scheme was necessary to address the additional defects identified during the remediation of the weathertightness issues and that the logic of the existing scheme did not survive the discovery of those defects. The court accepted that the fire protection works were necessary to preserve the structural integrity of the building, which all owners benefit from, and that the proposed scheme better aligned cost apportionment with the scheme of the Act. The court held that the commercial owners should contribute to the cost of the works but that the contribution should be based on their respective interests within the building, excluding the ownership interest attributable to uncovered carparks. The court reserved all issues as to costs and directed that a copy of the judgment be provided to the Ministry of Business Innovation and Employment.

Orders