Body Corporate 343200 v Duncan

[2021] NZHC 2319

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2021-441-42

[2021] NZHC 2319

UNDER

the Unit Titles Act 2010

IN THE MATTER OF

an order settling scheme under s 74

BETWEEN

BODY CORPORATE 343200

Applicant

AND

JOHN CHARLES PENNINGTON DUNCAN, COLLEEN GAENOR DUNCAN & ORS

First Respondents

LUAN SIXTUS CUFFE

Second Respondent

ANZ BANK OF NEW ZEALAND LIMITED

Third Respondent

BANK OF NEW ZEALAND

Fourth Respondent

Hearing (by AVL):

6 September 2021

Counsel:

C Baker for the Applicant

No appearance for the Respondents

Judgment:

6 September 2021

ORAL JUDGMENT OF GWYN J

[1]                 The applicant is the Body Corporate of an eight-unit complex at 101 Marine Parade, Napier, known as the T & G Building. It applies for an order under s 74 of the Unit Titles Act 2010 (the Act) to settle a scheme of repair (the Scheme).

BODY CORPORATE 343200 v DUNCAN [2021] NZHC 2319 [6 September 2021]

[2]                 The Body Corporate has served the application on all those with an interest in the units (all owners of the units and any mortgagees and charge-holders) and the insurers of the building. No opposition to the application has been filed. A motion to file an application under s 74 of the Act was put to an Extraordinary General Meeting (EGM) on 6 April 2021. All eight units were represented at the meeting, in person, by proxy, or by postal vote. Approval for the resolution to apply for the Scheme was unanimous amongst the attendees.

[3]In those circumstances, the applicant seeks orders today.

Discussion

[4]                 The Court of Appeal in Tisch v Body Corporate 318596 set out the three steps the Court must follow when considering an application to settle a scheme under s 74 of the Act:1

(a)The Court must be satisfied that the building has been damaged or destroyed.

(b)If so satisfied, the Court must decide whether a scheme is appropriate in the circumstances.

(c)If a scheme is appropriate, the Court must then decide what its terms should be.

[5]                 I have considered the affidavit evidence put before the Court, which includes evidence as to the damage to the building and attaches the proposed Scheme. I am satisfied that the building has been damaged and is in need of repair. I am also satisfied that a scheme is appropriate in all the circumstances.

[6]                 The Court of Appeal in Tisch set out five factors that must be considered at the third step in the process:2

1      Tisch v Body Corporate No. 318596 [2011] NZCA 420, [2011] NZLR 679 at [35]. There the Court was considering s 48 of the Unit Titles Act 1972, the predecessor to s 74 of the Act.

2      At [44]-[49].

(a)a scheme with broad support is preferred;

(b)the scheme is to be appropriately detailed;

(c)the order can have retrospective effect, 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; and

(e)the terms of the scheme are not to depart from the Act and the Body Corporate Rules any more than reasonably necessary to achieve fairness between unit holders in the circumstances.

[7]                 I am satisfied that all five of those requirements have been met. I have already referred to the support for the Scheme which was evident at the EGM.  As indicated, I have considered the Scheme and I am satisfied it has the level of detail necessary and is in substantially similar terms to schemes which have been approved by this Court on prior occasions.

[8]                 I am also satisfied as to the basis of the funding to be raised in connection with the Scheme and of the standard of repair: the work is to be carried out by a single contractor, under the control of a single consultant, at the same time. Furthermore, the Scheme departs no more than necessary from the Act and the Body Corporate Rules. There is nothing in the Scheme which suggests to me that the interests of any unit holder or mortgagee are adversely affected.

[9]                 For those reasons, the application is granted and the Scheme is approved. I grant the orders sought at 1.1-1.4 inclusive of the applicant’s originating application dated 10 June 2021.

Gwyn J

Solicitors:

Price Baker Berridge, Henderson