Body Corporate 324371 - [2021] NZHC 242

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-000744

[2021] NZHC 242

UNDER the Unit Titles Act 2010

BETWEEN

BODY CORPORATE 324371

Applicant

Hearing: 22 February 2021

Appearances:

David Powell and Janice Wong for the Applicant No appearance by any other party

Judgment:

22 February 2021

JUDGMENT OF MOORE J

[Approval of s 74 scheme]

This judgment was delivered by me on 22 February 2021 at 3:00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar / Deputy Registrar Date:

RE: BODY CORPORATE 324371 [2021] NZHC 242 [22 February 2021]

Introduction

[1] The applicant is a body corporate which is seeking orders under s 74 of the Unit Titles Act 2010 (“the Act”) settling a scheme in relation to the unit title complex situated at 11 Anzac Avenue, Auckland, known as “Century On Anzac” (“the Development”). Widespread and significant defects have been identified throughout the 100 or so units and common areas. The defects include weathertightness and fire safety defects. Remedial works have been recommended. The details of those defects and evidence relating to them and proposed remediation is set out in the affidavit of a registered building surveyor, Nicholas Batchelor, and an expert on passive fire protection, Ronald Green.

[2] All but one of the owners at an extraordinary general meeting called by the Body Corporate, voted in support of a resolution that the Body Corporate instruct solicitors to prepare a s 74 scheme for the remedial work in consultation with the Body Corporate Committee. Regrettably, the Body Corporate’s Minutes record neither the identity of the objector nor his/her reasons for objecting.

[3] The present application was filed in this Court on 10 June 2020. Mr Powell, for the Body Corporate assures me and I am independently satisfied the application has been served on all interested parties. No notices of opposition have been filed. No evidence in opposition is before the Court and at the various procedural callings of this matter, including at the hearing before me, no party has appeared in opposition.

[4] From the bar Mr Powell properly advised me that late last week he corresponded with one of the owners who had suggested to him that the draft scheme, as presented, might be improved in certain, specified ways. Mr Powell was uncertain whether this owner was the same person who objected at the extraordinary general meeting. In any event, he tells me he advised the owner that he was at liberty to come to Court today and address me on his concerns and suggestions for improvement. No one other than Counsel for the Body Corporate was in attendance and, accordingly, I must deal with the application and draft scheme as presented.

[5] Notwithstanding the lack of opposition, the applicant still carries the burden of satisfying this Court on balance that its jurisdiction to order a scheme has been triggered and, if it has jurisdiction, it should grant the scheme as filed.

[6] I am…

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: [2021] NZHC 242
Decision Date: 22 February 2021

CaseChat Overview and Summary

The case involves Body Corporate 324371, a body corporate seeking orders under Section 74 of the Unit Titles Act 2010 to settle a scheme in relation to a unit title complex in Auckland. The complex, known as Century On Anzac, has significant defects such as weathertightness and fire safety issues. The Body Corporate seeks to undertake remedial works, which have been recommended by experts. All but one of the unit owners voted in favor of the scheme at an extraordinary general meeting, though the identity and reasons of the objector remain unknown. The application was filed in the High Court of New Zealand, Auckland Registry, and no opposition has been filed.

The legal issues in the case revolve around whether the building has been damaged or destroyed, whether a scheme is necessary to effect the repairs, and whether the terms of the proposed scheme are fair and appropriate. The court must also consider the five guiding principles set out in Tisch v Body Corporate 318596, which emphasize broad support for the scheme, appropriate detail, retrospective effect, simultaneous execution of work, and fairness between unit owners.

The court found that the building had indeed been damaged due to the identified defects, making a scheme under Section 74 of the Act appropriate. The proposed scheme enjoys broad support from the unit owners, is appropriately detailed, and provides for retrospective application of costs, simultaneous execution of work, and fair apportionment of costs. The terms of the scheme do not unreasonably depart from the Act or Body Corporate rules. Therefore, the court granted the application and approved the proposed scheme as set out in Schedule A to the application dated 26 May 2020.

Orders