Body Corporate 68792 v Memelink

[2015] NZHC 519

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2015-485-202 [2015] NZHC 519

IN THE MATTER

of section 141 of the Unit Titles Act 2010

IN THE MATTER

of an originating application to appoint an administrator

BETWEEN

BODY CORPORATE 68792
First Applicant

AND

SYNERGY ENTERPRISES LIMITED, JAMES AND CAROLINE MCKERNAN, STEVEN AND VALDA SCHECKTER AND GEOFFREY ARDEN

Second Applicants

AND

HARRY MEMELINK AND IAN TREVOR NEILL HAMILTON First Respondents

AND

ANTHONY HARRY DE VRIES AND GERALDINE DE VRIES

Second Respondents

AND

CUDBY & MEADE LIMITED Third Respondent

Hearing:	18 March 2015
Counsel:	J K Mahuta-Coyle for Applicants H Memelink in Person A H de Vries in Person
Judgment:	18 March 2015

JUDGMENT OF BROWN J

BODY CORPORATE 68792 v SYNERGY ENTERPRISES LTD & ORS [2015] NZHC 519 [18 March 2015]

[1]      The first applicant (BC 68792) is the body corporate in respect of the unit title development at the property on the corner of Wakefield Street and Hutt Road. There  has  been  a  long  and  troubled  history  of  conflict  between  members  of BC 68792.   A standoff  between the second applicants and at least some of the respondents,  in  particular  Mr Memelink  and  Mr de Vries,  is  the  catalyst  for  the current  application  for the appointment  of  an  administrator  of  BC 68792  on  an interim basis under s 141 of the Unit Titles Act 2010 (the Act).

[2]      The application which was initially made on a without notice basis came before me as Duty Judge on Friday, 13 March 2015.  The application and affidavits in support had been provided to Mr Memelink and Mr de Vries on a Pickwick basis and they had filed a three page memorandum in opposition.  Having considered the papers I was not satisfied that the application should properly be dealt with on a without notice basis in terms of r 7.46(3) and I directed that the matter be called this morning.

[3]      The application is supported by affidavits of Mr P H Martens, the current chairman of  BC 68792,  Mr J A McKernan,  who  has  served  on  the  management committee  of  BC 68792  for  a  number  of  years  and  Mr S Scheckter  who  was appointed to the management committee of BC 68792 in December 2014.  The state of  disharmony  between  the  two  groups  is  reflected  in  para 38  of  Mr Martens’ affidavit:

38.      Mr Memelink  and  Mr de Vries,  having  been  opponents  for  many years, seem to have joined forces recently.  They both allege that the Body Corporate itself is “illegal”.  Mr Memelink claims that he should have been chairman as a result of the AGM in December 2013.   Mr Memelink was denied the opportunity to conduct a poll vote that unit owners be declared eligible to vote when they should not have been, that my appointments (past and present) are illegal, that he is suing me (and others).  I receive regular and  persistent  email  communications  from  him  and  Mr de Vries  and incessant phone calls, many of which are abusive in tone.  I estimate that in the last twelve months I have spent an average of ten hours a week dealing with matters that have been put forward by Mr de Vries and Mr Memelink. Other members and our manager also receive endless communications of this type.

[4]      Matters have now escalated to the point that BC 68792’s bank account with the ANZ Bank is frozen and threats have been made that electricity will be cut off, access to telecommunications installations restricted and trespass notices issued.

[5]      At the hearing this morning I heard from Mr de Vries and Mr Memelink about the recent history of BC 68792 and their concerns.  While Mr Memelink took issue with the description of BC 68792 as dysfunctional, he did agree that there was a major standoff between the two groups.   He and Mr de Vries maintained their allegation that BC 68792 management is “illegal”.

[6]      The  person  whom  it  is  proposed  should  be  appointed  as  an  interim administrator is Mr John Paul Greenwood, a solicitor who is a recognised expert in unit  title  matters.    He  has  filed  a  consent  to  act  dated  12 March 2015.    His professional  standing  is  such  that  he  has  the  endorsement  of  both  sides  to  the standoff.

[7]      However it was apparent from the presentations made by Mr de Vries and Mr Memelink  this  morning  that,  while  they  would  be  entirely  happy  to  have Mr Greenwood appointed in an advisory capacity, they did not wish to have an interim administrator appointed.  When I explored that reluctance with Mr Memelink it became apparent that it was his concerns about the costs of an administrator and by whom  those  costs  would  be  met  that  caused  him  to  resist  Mr Greenwood’s appointment.  Mr Memelink was also concerned to ensure that the appointment of an administrator would not affect his right to bring law suits in relation to past aspects of the management of BC 68792.

[8]      From my consideration of the quite substantial papers filed in support of the application and having heard Mr de Vries and Mr Memelink this morning at some length, I am quite satisfied that it is necessary that an administrator of BC 68792 be appointed.

[9]      Accordingly I make the following orders:

(a)      I appoint John Paul Greenwood as the administrator of BC 68792 on an interim basis until Friday, 24 April 2015 when his appointment will be reconsidered by the Court.

(b)In  accordance  with  s 141(5)  of  the  Act  Mr Greenwood,  to  the exclusion of BC 68792 and the committee, has and may exercise the powers of BC 68792 and the committee and is subject to the duties of BC 68792   and   the   committee.      For   the   avoidance   of   doubt Mr Greenwood   as   administrator   may  operate   BC 68792’s   bank account   number 01-0542-0081634-00 (ANZ Bank, Lower Hutt branch);

(c)      Mr Greenwood as administrator may, in writing, delegate any of the powers vested in him and revoke any delegation at any time;

(d)Mr Greenwood  shall  file  and  provide  to  all  owners  of  units  in BC 68792 a report, addressed to this Court, confirming the steps that he  has  taken  as  interim  administrator  and  identifying  any  further issues  that  need  to  be  addressed  either  by  BC 68792  or  by  the administrator if his appointment is continued.   That report shall be filed and served by 5.00 pm on 20 April 2014;

(e)      The  costs  of  this  application  are  reserved  to  be  resolved  in  the substantive determination of the originating application.

[10]     As discussed with the parties this morning the following procedural timetable is to apply:

(a)       notices of opposition and affidavits in opposition are to be filed by

Friday, 10 April 2015;

(b)      any affidavits in reply by the applicants are to be filed by Monday,

20 April 2015.

[11]     The proceeding is to be called again at 10.30 am on Friday, 24 April 2015. At that  time  the  administrator’s  report  will  be  considered  and  a  decision  made concerning a continuation of his appointment.  For the avoidance of doubt that date is not a hearing date for the substantive application.

[12]     Leave is reserved to the parties and the administrator to file memoranda for my attention if that should prove necessary.

Brown J

Solicitors:

Thomas Dewar Sziranyi Letts, Lower Hutt