Body Corporate 81340 v Knight

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2016-485-220

[2018] NZHC 2953

UNDER

the Unit Titles Act 2010

IN THE MATTER

of an application by Body Corporate 81340, a duly registered Body Corporate under the Unit Titles Act 2010, for an order to settle a scheme under section 74

BETWEEN

BODY CORPORATE 81340

Applicant

AND

ZENA KNIGHT AND YEE GOOD FORTUNE INVESTMENTS LIMITED (IN LIQUIDATION)

Respondents

Hearing:

15, 16 and 17 October 2018

Counsel:

A J Knowsley and D W Hunt for Applicant N B Dunning for Respondents

J K Mahuta-Coyle for Interested Party

Judgment:

14 November 2018

JUDGMENT OF THOMAS J

Table of contents

Introduction  [1]
Schemes under s 74  [8]
Is The Links damaged?  [12]
Is the Scheme appropriate?  [22]

Work proposed under the Scheme  [22]

Discussion  [24]

What should the terms of the Scheme be?  [47]

Ownership issues  [47]

BODY CORPORATE 81340 v KNIGHT [2018] NZHC 2953 [14 November 2018]

The 2010 Act  [54]

Is a utility interest approach fair as between owners?  [65]

Other considerations  [81]

Result  [86]

Introduction

[1]                   The apartment complex known as “The Links” is a 14 storey unit title development situated one street back from Paraparaumu Beach north of Wellington. It comprises 28 units.

[2]                   The Links suffers from weathertightness issues. From around 2010, the Body Corporate has attempted to deal with these issues. The Body Corporate acknowledges the real solution lies in recladding the building but, having decided this is too expensive to be carried out immediately, has resolved to undertake interim remedial repair work in the meantime.

[3]                   Some of the work has been undertaken and further work is required. The Body Corporate has applied for approval of a scheme under s 74 of the Unit Titles Act 2010 (the 2010 Act) to cover both the work already undertaken and that still outstanding (the Application). Although some of the work is to privately owned parts of The Links, the scheme would require all the work to be paid for on a utility interest basis.

[4]                   Ms Knight, an owner of one of the units, opposes the Application. The Body Corporate’s initial application, made in March 2016, was opposed by Ms Knight and Yee  Good Fortune Investments Ltd, an owner of another unit.   Earlier this year,   Ms Knight and Yee Good Fortune Investments Ltd unsuccessfully applied to strike out the Body Corporate’s March 2016 application.1 Yee Good Fortune Investments Ltd is now in liquidation as a result of failing to meet a judgment against it for outstanding Body Corporate levies in respect of The Links.

[5]                   Although Ms Knight’s notice of opposition was relatively wide-ranging, her objection boils down to two principal issues. First, whether a scheme is required,

1      Body Corporate 81340 v Knight [2018] NZHC 2143.

given the nature of the work undertaken. Secondly, whether the proposed scheme is fair to owners, in particular by requiring payment for it on a utility interest basis.

[6]                   The Application was…