Body Corporate 346799 v Various Unit Owners

[2022] NZHC 2039

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2012-404-7730

[2022] NZHC 2039

UNDER

The Unit Titles Act

BETWEEN

BODY CORPORATE 346799

Applicant

AND

VARIOUS UNIT OWNERS

Respondents

Hearing:	On the papers
Appearances:	C Baker for Body Corporate 346799 T Bates for Respondents
Judgment:	17 August 2022

JUDGMENT OF LANG J

[on costs]

Solicitors:

Price Baker Verridge, Auckland TM Bates & Co, Auckland

BODY CORPORATE 346799 v VARIOUS UNIT OWNERS [2022] NZHC 2039

[1]    This proceeding involves the Victopia apartment complex, a 14 storey building situated in the central city. Like so many others in this region, the Victopia complex encountered weathertightness issues. In 2013 the body corporate obtained this Court’s approval under s 74 of the Unit Titles Act 2010 (the Act) to undertake a scheme of repairs to address these issues. The estimated cost of repairs subsequently increased from $5 million to $41 million. Not surprisingly, this led to unit owners raising concerns about the cost of the remedial project. These intensified as the body corporate imposed levies on unit owners to cover the cost of the project.

[2]    Several unit owners then sought further management and financial information from the body corporate relating to the cost of the remediation. They were not satisfied with the body corporate’s response. They then filed an application seeking orders that the body corporate deliver up four specified classes of information.

[3]    The application was listed for mention on several occasions as the body corporate produced much of the information the unit owners sought. A fixture was allocated for 28 July 2022. This was ultimately not required as the unit owners withdrew their application after having received a considerable amount of information from the body corporate.

[4]    The parties have been unable to reach agreement regarding costs and I am now required to determine costs on the basis of the submissions the parties have filed.

The arguments

[5]    The body corporate seeks an award of costs because it considers it was the successful party given the unit owners withdrew their application. The body corporate also explains that it was not a simple process for it to locate and supply the documents the unit owners were seeking. It was necessary for the body corporate to engage the assistance of managerial staff to undertake the task. The body corporate says that it was “an unavoidable fact” that it would take a considerable amount of time to supply information that spanned many years. It says that it has never sought to obfuscate or prevent unit owners from accessing information to satisfy themselves that transactions have been carried out properly. In addition, the body corporate points out that its notice of opposition only objected to two of the classes of information sought by the

unit owners. It believes its stance in relation to these categories of information was ultimately accepted by the unit owners.

[6]    The unit owners say they were the successful party because they obtained most of the financial information they had sought in their application. The unit owners also seek an uplift on scale to reflect the casual approach they say the body corporate displayed towards its obligations to provide them with financial information.

Decision

[7]    I consider the most useful authority in the present context to be that of Sybeem Holdings Ltd v Body Corporate 187087.1 In that case Associate Judge Matthews observed:2

Rule 15.23 provides that unless the defendant otherwise agrees or the Court otherwise orders, a plaintiff who discontinues a proceeding against the defendant must pay costs to the defendant, up to and including the discontinuance. It is clear, however, that a different costs outcome may be ordered if it is just and equitable to do so. The Court is not to speculate on the merits of a case which it has not heard though in exceptional cases, where the merits are clear, they may influence the Court’s costs decision on a discontinuance. On the other hand, the reasonableness of the stance of both parties has to be considered. See, generally, Kroma Colour Prints v Tridonicatco NZ Ltd (2008) 18 PRNZ 973 and McGechan at paragraph 15.23.01.

[8]    In Sybeem a unit owner in an apartment complex had issued a proceeding seeking financial and management information from the body corporate responsible for managing the affairs of the complex. The body corporate ultimately handed over most of the documentation the applicant sought and the applicant withdrew its application. The applicant obtained an award of costs in its favour.

[9]    The Associate Judge in Sybeem based his decision on his assessment of the reasonableness of the steps taken by the parties. He considered it was reasonable for the applicant to bring the proceeding to obtain access to material to which it was entitled under the Act. Three months had also passed between the original request for the information and the proceeding being filed.  It then took a further period of eight

1      Sybeem Holdings Ltd v Body Corporate 187087 HC Auckland CIV-2009-404-7806, 3 May 2011.

2 At [9].

months for the body corporate to provide the material the applicant sought. The Court considered a more prompt response was required. In addition, the unit owner had largely achieved the outcome it sought in the proceeding even though it had also asked the Court to deal with other issues relating to levies the body corporate had imposed in relation to the plaintiff’s unit. The approach taken in Sybeem was subsequently discussed and approved by Associate Judge Osborne in O’Connor v O’Connor.3

[10]   In the present case I have no doubt that the unit owners were entitled to the information they sought under both clause 15 of the scheme of repairs approved by the Court and under s 132 of the Act. Furthermore, once the unit owners filed the application the body corporate provided virtually all the information the unit owners sought. This process took approximately four months and was not completed until 25 July 2022, just three days before the fixture scheduled for 28 July 2022.

[11]   I accept the unit owners’ argument that it should not have been necessary for them to apply to the Court to obtain the information they sought. The body corporate ought to have provided the information earlier than it did. I also note that the body corporate initially resisted the application on the basis that it would cost approximately

$22,000 plus GST to provide the information the unit owners sought. The unit owners did not accept that argument and there is nothing to suggest the body corporate has been obliged to expend that sum to provide the information.

[12]   Having said that, once the proceeding was issued I consider the body corporate provided the information within a time frame that was reasonable given the fact that it spanned several years. Taking these factors into account I am satisfied the unit owners are entitled to an award of costs in their favour but I do not consider there is any justification to make an increased award of costs.

[13]   The unit owners are entitled to a single award of costs against the body corporate. Costs are to be calculated on a Category 2B basis. The unit owners are also entitled to disbursements as fixed by the Registrar.

Lang J

3      O’Connor v O’Connor HC Dunedin CIV-2010-412-402, 6 October 2011.