Body Corporate 335054 v The Respondents

[2021] NZHC 3049

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2017-485-126

[2021] NZHC 3049

UNDER

The Unit Titles Act 2010

IN THE MATTER OF

an application for orders discharging a scheme under section74 of the Unit Titles Act 2010

BETWEEN

BODY CORPORATE 335054

First Applicant

BRETT SHAUN QUARTERMAN
Second Applicant

AND

THE RESPONDENTS

Respondents

Hearing:	On the papers
Counsel:	L N Van and J Morton for Applicants
Judgment:	11 November 2021

JUDGMENT OF ISAC J

[1]    Body Corporate 335054 (the Body Corporate) has applied for an order discharging a scheme approved by the Court1 (Scheme) under s 74 of the Unit Titles Act 2010. The Scheme provided for the reinstatement of a unit title development located at 41-53 Nairn Street, Mt Cook, Wellington.

[2]    Clauses 1.2 to 1.3 of the Scheme set out the reasons for the reinstatement project:

1      Re Body Corporate 335054 [2017] NZHC 1071.

BODY CORPORATE 335054 v THE RESPONDENTS [2021] NZHC 3049 [11 November 2021]

The Buildings have been constructed with defects which have resulted in damage to cladding, timber framing and other building elements and infrastructure throughout the complex. Many defects and areas of damage have been identified by the building consultants engaged by the Body Corporate and further defects, damage and areas of non-compliance are expected to exist elsewhere in the buildings.

In order for the Body Corporate and the Owners to meet their obligations under the Building Act 2004 and Unit Titles Act 2010 extensive repair work is necessary. This work will require a building consent and will need to be undertaken in a co-ordinated and integrated manner to ensure design and construction is consistent throughout the Buildings.

[3]    The Scheme made provision for discharge of the s 74 order in cl 11.2. That provision states that the order will be discharged by the Body Corporate giving written notice to the Court and all parties affected by the Scheme that the remediation project is complete. The Body Corporate is to give such notice by filing a memorandum to that effect attaching a copy of the code of compliance certificate confirming completion of the repairs, and by serving the memorandum on all parties to the Scheme.

[4]    On 20 September 2021, the Body Corporate filed a memorandum giving notice to the Court that the remediation project was complete. The memorandum attached a copy of the code compliance certificate for the remediation project.

[5]    At the time, the Body Corporate had not served all owners of units in the unit title development as required by cl 11.2, and sought directions. Briefly, the Body Corporate had obtained agreements from almost all the registered proprietors to effect service of the memorandum on them by email. The limited exceptions to that form of service related to the registered proprietors of Principal Unit 22, Accessory Unit 5, and Principal Unit 25. The latter unit was not at this time considered to be part of the Scheme as it required no repairs. Personal service was proposed for the registered proprietor of Unit 22.

[6]    In a detailed minute of 29 September 2021, Churchman J noted that Westpac New Zealand Ltd (the registered mortgagee of some of the units subject to the Scheme) had on 16 May 2017 indicated it would abide any decision of the, but requested that it be served with all papers in the proceeding, and kept informed of future hearings.

His Honour noted it might be sensible to serve Westpac and other mortgagees as named parties to the application for the Scheme. He made a direction to that effect.

[7]    Second, Churchman J noted that at cl 11.2 required written notice of completion of the remediation project, in the form of the memorandum, to be provided to the Court and all parties affected by the Scheme. While a number of parties had provided agreement as to the method of service (by email), the Body Corporate did not yet appear at that stage to have actually served a memorandum on those parties. Accordingly, His Honour directed service should occur in accordance with cl 11.2 and any agreements as to service. He also directed that an affidavit confirming service should be filed.

[8]    Following those directions, on 5 November 2021 the Body Corporate filed a further  memorandum  and  supporting  affidavits  from  André  Claassen  and  Logan McDougall. Those affidavits confirm service has been effected in accordance with cl 11.2 and the directions of Churchman J.

[9]    One additional matter arises. As already noted, Principal Unit 25 was not initially  considered  to  be  part  of  the  Scheme.  However,  counsel   for   the  Body Corporate submit that its owner is, strictly speaking, a party to the proceeding and the Scheme. Having sought authority from the owner of Principal Unit 25, service has also been effected on them by an agreed email address.

[10]   The affidavit of Mr McDougall also confirms service on four banks and an insurance company who were named as parties to the original application for approval of the Scheme.

[11]On the material provided to the Court I am satisfied that:

(a)the Body Corporate has given written notice to the Court and all parties affected by the Scheme that the remediation project is complete; and

(b)the Body Corporate has also provided a code of compliance certificate as attached to the memorandum of counsel of 20 September 2021  and

served it on all affected parties.

Result

[12]   Under s 74(8) of the Act, this court may cancel, vary, modify or discharge the order made under that section. The relevant requirements for discharging the Scheme under s 74 are met. I therefore order the Scheme as settled under s 74 of the Act by Simon France J on 22 May 2017 be discharged under s 74(8).

Isac J

Solicitors:
Anthony Harper, Auckland for Applicants