Body Corporate 308130 v Shan - [2025] NZHC 3381

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2025-404-2026

[2025] NZHC 3381

UNDER the Unit Titles Act 2010

IN THE MATTER

of an Application for Orders Establishing a Scheme under s 74 of the Unit Titles Act 2010

BETWEEN

BODY CORPORATE 308130

First Applicant

ANDREW STEPHEN HONEYSETT and SUZANNE LOUISE PREECE
Second Applicants

AND

KAI SHAN

First Respondent

Continued…

Hearing: 22 October 2025

Appearances:

K Wendt for Applicants

Judgment:

7 November 2025

JUDGMENT OF MACGILLIVRAY J

This judgment was delivered by me on 7 November 2025 at 3.00 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

………………

Solicitors:
Lisa Fry-Irvine Law, Auckland

BODY CORPORATE 308130 v SHAN [2025] NZHC 3381 [7 November 2025]

AND HUMBLE INVESTMENTS LIMITED
Second Respondent

KIM HAI NAM
Third Respondent

XIAO LIU
Fourth Respondent

CHRISTOPHER KARL KNIGHT- HASSELL and GEORGINA KNIGHT- HASSELL
Fifth Respondents

GK DREAM LIMITED
Sixth Respondent

FINCOOL LIMITED
Seventh Respondent

ANZ BANK NEW ZEALAND LIMITED
Eighth Respondent

BANK OF NEW ZEALAND
Nineth Respondent

WESTPAC NEW ZEALAND LIMITED
Tenth Respondent

LLOYDS BANK PLC
Eleventh Respondent

[1] The first applicant, Body Corporate 308130 (the Body Corporate), seeks an order settling a reinstatement scheme under s 74 of the Unit Titles Act 2010 (the Act) for a residential unit title development at 6 Scotia Place, Auckland Central.

[2] The application has been served on all the unit owners, as well as on the mortgagees of the units and on the Body Corporate’s insurer. The application is unopposed, and the hearing of the application proceeded by way of formal proof.

Background

[3] The units were built in the period from 2001 to July 2002. The units have serious weather tightness issues. A Weathertight Home Resolution Services (WHRS) report was obtained in 2010 identifying building-wide design and construction defects and damage. Since 2021, the Body Corporate has been planning remediation to reinstate the integrity of the units. Because of the substantial costs of the remedial work and the lack of owner engagement in the past, it has taken a considerable period of time to get the buy-in of owners for the building-wide remediation of the units.

[4] The work required to repair the units will include the demolition and removal of the existing cladding, replacement of decayed timber and treatment of sound timber, recladding, replacement of windows, reconstruction of decks and work to restore the interiors of the units consequent upon the remedial work.

Legal principles

[5] Under s 138 of the Act, the Body Corporate has an obligation to repair and maintain the common property and any building elements and infrastructure that relate to more than one unit. The duty to maintain and repair includes an obligation to renew the relevant property where necessary.1

[6] The Body Corporate is entitled to recover the costs of work relating to repairs or maintenance of building elements and infrastructure contained in a principal unit from the owner of the unit.2 The…

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: [2025] NZHC 3381
Decision Date: 7 November 2025

CaseChat Overview and Summary

The case involves Body Corporate 308130, along with two individual unit owners, seeking an order under the Unit Titles Act 2010 to establish a reinstatement scheme for a residential unit title development located at 6 Scotia Place in Auckland Central. The application, which is unopposed, aims to address widespread weathertightness issues identified in the units, requiring extensive remediation works. The court must determine whether the proposed scheme is appropriate and if the terms of the scheme are fair and equitable. The court's decision involves assessing whether the building has been damaged, whether a scheme is appropriate given the circumstances, and if the proposed terms of the scheme are suitable for implementation.

The primary legal issues before the court include whether the building has indeed suffered damage warranting remediation, whether settling a reinstatement scheme is appropriate under the Unit Titles Act 2010, and if the terms of the proposed scheme are fair and equitable. The court must consider the extent of the damage identified in the WHRS report, the appropriateness of the scheme given the nature and cost of the required remediation works, and whether the proposed cost-sharing approach based on utility interests is appropriate and equitable. The court must also ensure that the scheme provides a fair mechanism for raising funds and that it aligns with the statutory requirements and precedents set by similar cases.

The court, MacGillivray J, determined that the units have suffered significant damage requiring a building-wide remediation project. The extensive and detailed WHRS report confirmed the widespread nature of the damage. The court found that settling a scheme is appropriate given the substantial costs and the need for a coordinated remediation effort. The proposed cost-sharing approach based on utility interests was deemed fair and appropriate, reflecting the relative benefit each unit would receive. The court was satisfied with the scheme's terms, which provide a legal and practical framework for implementing the remediation works and ensuring contributions towards the costs. The court approved the scheme as set out in the schedule to the notice of originating application dated 28 July 2025.

The court made orders settling the scheme for the reinstatement of the buildings and the unit title development at 6 Scotia Place, Auckland Central under s 74 of the Unit Titles Act 2010 on the terms set out in Schedule 2 to the notice of originating application dated 28 July 2025. As no parties opposed the application, no order for costs was made.

Orders