Body Corporate 392418 v Chan - [2022] NZHC 503

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-605

[2022] NZHC 503

BETWEEN
BODY CORPORATE 392418

Applicant

AND

HOK FAI CHAN AND DEXIN MA & ORS

First Respondents

ANZ BANK NEW ZEALAND LIMITED
Second Respondent

Continued over page

Hearing: 16 September 2021

Appearances:

A Hough and M Samountry for the applicant J Haig and D MacKenzie for the respondent

Judgment:

18 March 2022

JUDGMENT OF ROBINSON J

This judgment was delivered by me on 18 March 2022 at 2.30pm pursuant to Rule 11.5 of the High Court Rules

…………………………………………………………………… Registrar/Deputy Registrar

Solicitors:
Grimshaw & Co
Counsel:
J Haig, Barrister, Auckland
D MacKenzie, Barrister, Auckland

BODY CORPORATE 392418 v CHAN & ORS [2022] NZHC 503 [18 March 2022]

ASB BANK LIMITED
Third Respondent

BANK OF NEW ZEALAND
Fourth Respondent

LLOYDS BANK PLC
Fifth Respondent

MORTGAGE HOLDING TRUST COMPAY LIMITED
Sixth Respondent

WESTPAC NEW ZEALAND LIMITED
Seventh Respondent

CHUBB INSURANCE NEW ZEALAND LIMITED
Eighth Respondent

Introduction

[1] Body Corporate 392418 (Body Corporate) applies for an order to settle a scheme under section 74 of the Unit Titles Act 2010 (Act). The application applies to the unit title development at 132 Stancombe Road, Flat Bush, Auckland (132 Stancombe). HWD NZ Investment Co Limited (HWD) opposes the Body Corporate’s application.

[2] The unit title development at 132 Stancombe consists of three blocks with a total of 47 units. HWD developed two of the three blocks and owns nine of the 47 units.

[3] The proposed scheme relates to repair and remediation works the Body Corporate has determined is required to be carried out at 132 Stancombe. The Body Corporate (and others) have issued separate proceedings against HWD (and others) alleging (amongst other things) that HWD was negligent in the course of developing two of the three blocks that comprise 132 Stancombe (negligence proceeding).1

[4] HWD’s opposition to the current application to settle the scheme is two-fold. First, it says that 132 Stancombe is insufficiently damaged for section 74 of the Act to apply. Secondly, and in any event, HWD says that it is premature for the Court to approve the proposed scheme before the negligence proceeding has been determined.

[5] The application has been served on all unit holders at 132 Stancombe and also their mortgagees. Only HWD opposes the application.

Background

Damage and defects at 132 Stancombe

[6] The Body Corporate says there are two broad categories of defects at 132 Stancombe:

(a)Building/weathertightness defects; and

1 Body Corporate 392418 v Auckland Council & Ors HC Auckland CIV-2016-404-2904.

(b)Fire defects.

Building/weathertightness defects

[7] The building defects are summarised in an affidavit of Andrew Gray, a Registered Building Surveyor and a director of GBC Group Limited. Mr Gray concludes that 132 Stancombe suffers from several building defects that require extensive repairs to both common and unit property. In summary, Mr Gray says that:

(a)Perimeter walls: The perimeter walls do not prevent the penetration of water and fail to meet the requirements of the…

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: [2022] NZHC 503
Decision Date: 18 March 2022

CaseChat Overview and Summary

Body Corporate 392418 (Body Corporate) applied for an order to settle a scheme under section 74 of the Unit Titles Act 2010. The application relates to the unit title development at 132 Stancombe Road, Flat Bush, Auckland. HWD NZ Investment Co Limited (HWD) opposed the application. HWD is a developer and owner of nine units at 132 Stancombe. HWD’s opposition to the application is two-fold. First, it says that 132 Stancombe is insufficiently damaged for section 74 of the Act to apply. Secondly, HWD says that it is premature for the Court to approve the proposed scheme before the negligence proceeding has been determined. The Court was required to determine whether the buildings at 132 Stancombe have been damaged or destroyed; whether a scheme is appropriate in the circumstances; and what the terms of the scheme should be. The Court found that the buildings at 132 Stancombe have been damaged. It also found that a scheme was appropriate in the circumstances. The Court approved the scheme and ordered HWD to pay the Body Corporate’s costs.

Orders