Body Corporate 314604 v Hay - [2019] NZHC 1041

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-424

[2019] NZHC 1041

UNDER Section 74 of the Unit Titles Act 2010 and Part 19 of the High Court Rules

IN THE MATER

of a scheme of repairs for Villa Vanto

BETWEEN

BODY CORPORATE 314604

Applicant

AND

LESLEY ANNE HAY AND DAVID MAURICE HAY

First Respondent

ROBERT MIROA SIMPKINS AND SHARYN DYELL SIMPKINS

Second Respondents

Continued over

Hearing: On the papers

Counsel:

M Ibram for the Applicant

Judgment:

13 May 2019

JUDGMENT OF MUIR J

This judgment was delivered by me on Monday 13 May 2019 at 4.00 pm Pursuant to Rule 11.5 of the High Court Rules.

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

Counsel/Solicitors:
Rainey Law, Auckland. (M Ibram and J Heatlie)

BODY CORPORATE 314604 v HAY [2019] NZHC 1041 [13 May 2019]

HINERANGIMARIE LIMITED
Third Respondent

WARWICK DONALD BROWN AND JANET HELEN BROWN
Fourth Respondents

NIROSHA UDAYANGANI HEWA WELLALAGE AND JAYANATH SANJEEWA JAYASUNDARA MUDALIGE DE ALWIS
Fifth Respondents

LUKE CLAUDE TAYLOR MCKENZIE
Sixth Respondent

BRUCE WILLIAM GENTLE AND FELICITY MARIE WILTON
Seventh Respondents

MANAOTERANGI ERNEST FORBES AND CHRISTINE GAY FORBES
Eighth Respondents

IVAN MUNKEDAL
Ninth Respondent

LISA ANN HERBISON
Tenth Respondent

ASB BANK LIMITED
Eleventh Respondent

WESTPAC NEW ZEALAND LIMITED
Twelfth Respondent

BANK OF NEW ZEALAND
Thirteenth Respondent

KIWIBANK LIMITED
Fourteenth Respondent

SOUTHLAND BUILDING SOCIETY
Fifteenth Respondent

IAG NEW ZEALAND LIMITED
Sixteenth Respondent

Introduction

[1] Body Corporate 314604 applies to the Court for an order settling a Scheme for repair of the buildings located at 52, Fifth Avenue, Hamilton. The terms of the proposed Scheme are set out in a schedule to the application. The relevant development is known as the Villa Vanto complex.

[2]The purpose of the proposed Scheme is to remediate typical “leaky building”

damage. It has the broad support of the owners.

Requirements for a Scheme

[3] For a Scheme of repair to be sanctioned by the Court, the applicant must show that:

[a]the buildings have been destroyed or damaged; and

[b]the Court’s discretion to grant the Scheme is appropriately exercised
and in the interests of all owners.1

[4]The Court of Appeal has identified five animating considerations:2

[a]A Scheme with broad support is preferred.

[b]The Scheme is to be appropriately detailed.

[c]The Court’s orders can have retrospective effects, as long as the Body Corporate has acted in accordance with the Scheme prior to the Court’s approval.

[d]Normally work is to be done to the same standard and at the same time.

1 Tisch v Body Corporate No 318596 [2011] 3 NZLR 679 (CA) at [36]–[44].
2 Tisch v Body Corporate No 318596 [2011] 3 NZLR 679 (CA) at [45]–[49].

[e]The terms of the Scheme are not to depart from the Unit Titles Act 2010 and the relevant Body Corporate Rules anymore than is reasonably necessary to achieve fairness between unit holders in the circumstances.

[5] In the present case, the development has been investigated by the Weathertight Homes Resolution Service. It found a number of systemic weathertightness problems causing…

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: [2019] NZHC 1041
Decision Date: 13 May 2019

CaseChat Overview and Summary

The High Court of New Zealand was asked to decide on an application by Body Corporate 314604 to approve a scheme of repairs for the Villa Vanto complex in Hamilton. The purpose of the scheme was to address the typical "leaky building" damage that had occurred in the complex. The Body Corporate sought approval to implement the scheme, which proposed that the costs of repairs be shared equally among the unit owners, with certain exceptions.

The legal issues the court had to address included whether the proposed scheme met the statutory requirements for approval, including having broad support from the unit owners, being appropriately detailed, and not departing from the Unit Titles Act 2010 and the relevant Body Corporate Rules more than necessary to achieve fairness. The court also had to consider whether the scheme allowed for the work to be done to the same standard and at the same time and whether it could have retrospective effects.

The court found that the proposed scheme had broad support from the unit owners, as seven out of ten attended the extraordinary general meeting and all voted in favour of the scheme. The court also found that the scheme was appropriately detailed, with terms similar to those in previous schemes that had been approved by the court. The court noted that the scheme ensured that the Body Corporate had the power to complete all the repairs, allowed for the owners to be levied in advance of repairs, and apportioned the repairs in an equitable way. The court concluded that the jurisdictional requirements for a scheme were satisfied and that the proposed scheme was one that was appropriately approved by the court.

The court made orders approving the scheme of repairs proposed by the Body Corporate. The orders allowed the Body Corporate to raise monies in advance of the repair and to share the costs of repairs equally among the unit owners, with certain exceptions. The court also made orders requiring the proprietors of unit 2 to be specifically notified of their potential additional liability in relation to the remedial works to that unit.

Orders