Body Corporate 65115 v Middlemiss - [2017] NZHC 1906

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2016-470-000170 [2017] NZHC 1906

BETWEEN
BODY CORPORATE 85115

Applicant

AND

JENNIFER ANNE MIDDLEMISS, REDOUBT TRUSTEES, COLIN GEORGE COWAN AND MSCA TRUSTEES

Respondents

Hearing: 11 July 2017

Appearances:

Daniel Shore for the Applicant

Judgment:

11 August 2017

JUDGMENT OF MOORE J

This judgment was delivered by me on 11 August 2017 at 3:00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar
Date:

BODY CORPORATE 85115 v MIDDLEMISS & ORS [2017] NZHC 1906 [11 August 2017]

Introduction

[1] The applicant is a body corporate under the Unit Titles Act 2010 (“the Act”). It has 26 apartments and three retail shops. These are arranged into three buildings which surround a central courtyard and swimming pool.

[2] In 2014 the body corporate discovered that a number of the complex’s decks and balconies were suffering from defects which relate to their weathertightness. These defects have given rise to safety concerns and have allowed water to enter some of the apartments. The body corporate proposed and the unit owners resolved to prepare a scheme of repairs to remedy the defects. The body corporate now applies to this Court for an order to settle that scheme under s 74 of the Act.

Background

[3] The chairman of the committee of the body corporate, Marek Grzybowski, has sworn an affidavit in which he sets out the history of how the defects were discovered and the circumstances surrounding the decision by the body corporate to obtain a scheme of repair.

[4] Mr Grzybowski deposes that in 2014 it became apparent that remediation work was required. On 28 June 2014 the body corporate resolved at an annual general meeting (“AGM”) to investigate the cause and extent of the damage. At the next AGM it was resolved that the body corporate would retain the services of Phil Carling, an architect of the firm Carling Architects Limited.

[5] Mr Carling carried out an investigation to assess the nature and extent of the damage. He has sworn an affidavit which has been filed in these proceedings. Mr Carling explains in his affidavit that the joints between the decks and the adjoining wall structures are insufficient and almost solely reliant upon sealant which breaks down over time. Further, the clearance between some of the decks and the finished floor levels inside each unit is less than that which is required to meet the New Zealand Building Code. The decks’ drainage facilities are also inadequate and do not allow sufficient volumes of water to escape.

[6] After completing his initial investigations, Mr Carling co-ordinated a tender process on behalf of and following resolution by the body corporate. Tenders were received from four contractors with prices ranging from $1,300,000 plus GST to
$1,830,057.66. With the assistance of Mr Carling, the body corporate committee reviewed the tenders and agreed to retain Stanley Construction Limited to complete the repairs.

[7] On 15 April 2016 the body corporate gave notice to all owners of an…

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: [2017] NZHC 1906
Decision Date: 11 August 2017

CaseChat Overview and Summary

Body Corporate 85115 sought to settle a scheme of repairs to address weathertightness defects in the decks and balconies of their unit complex under the Unit Titles Act 2010. The body corporate sought the Court's approval of a scheme of repairs to remedy the defects. The court had to determine whether the body corporate had satisfied the requirements to settle the scheme under s 74 of the Act. The court also had to determine whether the scheme, as proposed, was appropriate and should be granted. The Court found that the scheme was in the best interests of the unit holders as a whole and was appropriately detailed. The Court also found that it was appropriate to allow all repairs to be levied against the owners on a utility interest basis, as all unit owners benefit from the proposed repairs. However, the Court found that the scheme contained an inconsistency between clauses 17.2 and 25, which provided for dispute resolution. The Court amended clause 17.2 to allow parties to seek either directions from the Court or refer the matter to arbitration. The Court then approved and settled the scheme.

Orders