Body Corporate 329331 v Just Law no 65 Ltd

[2019] NZHC 9

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-002863

[2019] NZHC 9

BETWEEN

BODY CORPORATE 329331

Plaintiff

AND

JUST LAW NO 65 LTD, 201 LTD, 202 LTD, 203 LTD, 204 LTD, 206 LTD, 207

LTD, RIDGE 302 LTD, 306 LTD, 307 LTD, 403 LTD, 404 LTD, 405 LTD, FRANCIS SWIFT & RODNEY CHARLES SWIFT, OLEG ZAITSEV, OLGA ZAITCEVA & DENIS ZAITSEV, NOMACK GROUP LTD, LINDA ANNE ANDREWS AND PETER FRANCIS ANDREWS

Defendants

Hearing:	15 January 2019
Appearances:	T J G Allan for Plaintiff T Rainey for Defendants
Judgment:	15 January 2018

ORAL JUDGMENT OF VENNING J

Solicitors:           Grove Darlow & Partners, Auckland

Richard Allen Law Associates Ltd, Auckland

Counsel:            T J Rainey, Auckland

BODY CORPORATE 329331 v JUST LAW NO 65 LTD & ORS [2019] NZHC 9 [15 January 2018]

Application

[1]    These proceedings are brought in the name of the Body Corporate of an apartment complex known as The Ridge. They are brought by the Court appointed Administrator, Anthony McCullagh. Orders are sought inter alia authorising Mr McCullagh to remove occupants of The Ridge apartments in order to enable repairs to be carried out to the apartments.

Background

[2]    On 3 February 2010 this Court granted an application by the Body Corporate for an order sanctioning a scheme of arrangement under s 48 of the Unit Titles Act 1972 (the Act) to enable repairs to be carried out at the complex.1 On 29 June 2018 the Body Corporate entered a contract with Brosnan Construction Ltd (Brosnan) to complete the remedial works.

[3]    A number of owners have opposed the repairs throughout. There have been a number of proceedings before the Court. First, an unsuccessful injunction application to restrain the Body Corporate from entering the contract for the remedial works and then, subsequently, the parties promoting the unsuccessful injunction application, gained control of the Body Corporate and passed resolutions seeking to halt the repair works and to negotiate with Brosnan to terminate the remedial works contract. Following those steps an application was made by another owner for the appointment of the Administrator.

[4]    On 6 September 2018 this Court made an order appointing Mr McCullagh as Administrator for 30 days to undertake the remedial works previously sanctioned by the Court.2 Mr McCullagh then arranged for notices to be sent to the owners of the apartments in the complex to enable and facilitate the remedial building work to be carried out in accordance with the contract with Brosnan. The notice provided, again amongst other things, a direction that owners were required to give immediate notice to their tenants requiring vacant possession to be delivered up no later than Monday, 26 November 2018.

1      Body Corporate 329331 v Baddeley and Ors HC Auckland CIV-2009-404-7379, 3 February 2010.

2      May v Body Corporate 329331 & Ors [2018] NZHC 2337.

[5]    Unfortunately, as Mr McCullagh acknowledges, that date was inadvertently a few days short of the 90 days’ notice period required under the Residential Tenancies Act 1986. Mr McCullagh then caused the Body Corporate to issue a further notice advising that the date the owners were required to deliver up vacant possession was

11 January 2019. Mr McCullagh negotiated with Brosnan for the work to be commenced on 14 January 2019. As noted, Mr McCullagh’s appointment was for a limited period. During this process it was renewed from time to time.

[6]    Given the passage of time an application was made for the order appointing Mr McCullagh as Administrator to be made permanent. That application was granted priority and was heard by the Court on 8 January 2019 given the scheduled commencement date for the building work of 14 January 2019.3 In his decision delivered on 9 January 2019 Lang J accepted that the applicants had shown cause why the continued appointment of the Administrator was necessary. The Judge made an order extending the appointment of Mr McCullagh as Administrator on the existing terms until further order of the Court. In doing so the Judge observed that implementation of the Brosnan contract appeared to offer the only realistic prospect of the Body Corporate being able to complete the repairs within a time frame that would enable it to meet its obligation under the scheme previously sanctioned by the Court and as expeditiously as practical.

[7]    In the meantime these proceedings were issued in anticipation that the order ultimately made by Lang J confirming the appointment of the Administrator would be made. Although brought without notice Mr Rainey, who has represented a number of the apartment owners who oppose the continued appointment of the Administrator, filed a memorandum pointing out the difficulties with the application and the orders sought in its current form, particularly insofar as it relates to tenants of the apartments who may hold valid tenancies under the Residential Tenancies Act. Such tenants will have rights under that Act. In that memorandum he submitted it was not appropriate to make orders in the form sought, nor using the John and Jane Doe format.

3      May v Body Corporate 329331 & Ors [2019] NZHC 3.

[8]    On 9 January 2019 Lang J adjourned this application to today’s date to be called before the Duty Judge. Mr Allan for the Administrator has filed an updating memorandum for the Court this morning. Mr Rainey has appeared as a courtesy to the Court.

Current position

[9]    The Administrator’s position as explained by Mr Allan in his memorandum is that the Administrator seeks to advance his application for orders in terms of the proceeding as crafted. However, if the Court took the view that specific parties should be named then Mr Allan sought orders adding as parties under r 4.56 of the High Court Rules the following:

101	Just Law No 65 Ltd, of 8 Tui Street, Taihape, New Zealand
201	201 Limited*
202	202 Limited*
203	203 Limited*
204	204 Limited*
206	206 Limited of 23 Hargreaves Street
207	207 Limited*
302	Ridge 302 Limited*
306	306 Limited*
307	307 Limited*
403	403 Limited*
404	404 Limited*
405	405 Limited*
209	Frances Swift & Rodney Charles Swift of Unit 2A and accessory unit 7 on Deposited Plan 3299331 being the building at 23 Hargreaves Street, College Hill, Auckland
301	Oleg Zaitsev, Olga Zaitceva and Denis Zaitsev of Unit 3H and accessory unit 28 on Deposited Plan 3299331 being the building at 23 Hargreaves Street, College Hill, Auckland

402Nomack Group Limited, C/- Cochrane Accountants Limited,  267 Broadway Avenue, Palmerston North 4440, New Zealand

408 Linda Anne Andrews and Peter Francis Andrews of Unit 4A and accessory unit 16 and 22-23 on Deposited Plan 3299331 being the building at 23 Hargreaves Street, College Hill, Auckland

*C/- MD Ross, 18 Broadway, Newmarket, Auckland 1023, New Zealand

[10]   In relation to those parties Mr Allan advised that it was the Administrator’s understanding that units 201 to 405, were not the subject of any residential tenancy but may be commercially rented as short-term accommodation on Airbnb. The Administrator has had some informal dealings with the owners of 101, 209, 301, 402, and 408. With the exception of the owners of 301 the Administrator is hopeful some resolution may be achieved. I understand from Mr Allan that in relation to the remaining owners of the apartments the Administrator is of the view that they will provide vacant possession of the apartments to enable the building work to be carried out.

[11]   The Administrator is concerned at the health and safety issues raised by the building work to be carried out by Brosnan if the units are not vacated. As an example of those concerns I understand that the fire system will need to be replaced and in the course of the work will be disengaged. Other issues as to security and safety will obviously arise in relation to the major construction works required.

[12]   As I noted Mr Rainey appeared as a courtesy to the Court. He has represented several of the opposing apartment owners (if I can call them that) in the past. He again made the point that, with respect to the Court, he did not consider the Court had jurisdiction to make orders determining tenancies or requiring tenants who may hold a tenancy under the Residential Tenancies Act to vacate the premises. I understood Mr Allan to acknowledge the force of that. Equally Mr Rainey properly observed that he could not oppose, and indeed does not have formal instructions to oppose orders in relation to the owners of the various apartments or units.

Decision

[13]   The position is this. The Administrator has had his authority and position confirmed by the Court on several occasions, most recently following a review of the background to the proceeding and after consideration of the interests of all parties including those who oppose the proposed work.

[14]    The Court has confirmed that the appointment of Mr McCullagh was necessary to enable the Body Corporate to meet its obligations under the scheme sanctioned by the Court to carry out the remedial works as expeditiously as possible. The Administrator does not have details of any residential tenancies that may exist. Those details will be held by individual owners. To date the individual owners have not provided any details of such tenancies to the Administrator.

[15]   The Administrator’s reissued notice to the owners would, if the owners had complied with it, have given the owners sufficient time to give notice to their tenants to terminate the tenancies under the Residential Tenancies Act and allow the building works to be carried out on the basis of vacant possession.

[16]   The failure by owners who may have such residential tenancy contracts or arrangements with tenants under the Residential Tenancies Act to give notice has the potential to thwart the previous orders of the Court recently confirmed by Lang J. In the absence of any undertakings by the owners to give notice or to provide the names of tenants to the Administrator the Court has in my judgment no option other than to make orders to facilitate as far as possible the ability of the Administrator to carry out the task which he is charged with and which the Court has sanctioned.

[17]   If that has the effect that the owners may be in breach of tenancy agreements that is a result of their action to date.

Orders

[18]To that end I make the following orders:

(a)On the basis that the joinder of the parties is necessary there will be an order under r 4.56 joining the following named parties as defendants to this proceeding:

101	Just Law No 65 Ltd, of 8 Tui Street, Taihape, New Zealand
201	201 Limited*
202	202 Limited*
203	203 Limited*
204	204 Limited*
206	206 Limited of 23 Hargreaves Street
207	207 Limited*
302	Ridge 302 Limited*
306	306 Limited*
307	307 Limited*
403	403 Limited*
404	404 Limited*
405	405 Limited*
209	Frances Swift & Rodney Charles Swift of Unit 2A and accessory unit 7 on Deposited Plan 3299331 being the building at 23 Hargreaves Street, College Hill, Auckland
301	Oleg Zaitsev, Olga Zaitceva and Denis Zaitsev of Unit 3H and accessory unit 28 on Deposited Plan 3299331 being the building at 23 Hargreaves Street, College Hill, Auckland
402	Nomack Group Limited, C/- Cochrane Accountants Limited, 267 Broadway Avenue, Palmerston North 4440, New Zealand
408	Linda Anne Andrews and Peter Francis Andrews of Unit 4A and accessory unit 16 and 22-23 on Deposited Plan 3299331 being the building at 23 Hargreaves Street, College Hill, Auckland

*C/- MD Ross, 18 Broadway, Newmarket, Auckland 1023, New Zealand

(b)An order requiring the registered owners of each of the units in The Ridge apartments to provide vacant possession of their units to the Administrator by not later than 5.00 pm on Friday, 18 January 2019.

(c)To facilitate any further orders that may be required an order requiring the named defendants to provide details of any residential tenancy under the Residential Tenancy Act to the Administrator’s solicitors by not later than 5.00 pm on Friday, 18 January 2019.

(d)To facilitate the implementation of the orders an order that service of the orders on the named defendants can be made on Richard Allen Law Associates Ltd (with a courtesy copy to Mr Rainey).

Costs

[19]   I am conscious that the defendants have not been formally heard as such. I reserve the issue of costs.

[20]   In the event other issues arise I adjourn this proceeding through to next Tuesday, 22 January 2019 at 10.00 am for call at that time.

Venning J