Body Corporate 85659 v Young - [2018] NZHC 312

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2016-485-579

[2018] NZHC 312

BETWEEN
BODY CORPORATE 85659

Plaintiff

AND

LESLIE YOUNG SUZANNE LEE YOUNG

Defendants

Hearing: 29 September 2017

Counsel:

A Knowsley and D Hunt for the Plaintiff

F B Collins and S A Hawkins for the Defendants

Judgment:

2 March 2018

JUDGMENT OF ASSOCIATE JUDGE SMITH

[1] The plaintiff (the Body Corporate) applies for summary judgment on a claim it has made against the defendants for unpaid levies in respect of 10 residential units owned by Dr and Mrs Young in a unit title development located at 219 Willis Street, Wellington, known as Richard Pearse House (the development).

[2] The total claim is for $104,569.85 (the total of the levies unpaid as at 30 April 2016), together with interest to 30 April 2016 of $53,766.77, “property management recovery costs” of $9708.59, and legal costs of $27,110.11 to 28 April 2016. In addition, the Body Corporate asks for interest at a rate of 10 per cent per annum from 30 April 2016 to the date of judgment, and legal costs from 28 April 2016 to the date of judgment.

BODY CORPORATE 85659 v LESLIE YOUNG SUZANNE LEE YOUNG [2018] NZHC 312 [2 March 2018]

[3] Dr and Mrs Young oppose the application. They say that either the resolutions imposing the relevant levies were invalid (and have not been ratified), or that the Body Corporate should not be permitted to recover the levies in full before it has addressed an issue raised by Dr and Mrs Young under s 126 of the Unit Titles Act 2010 (the UTA), namely that it would be inequitable to attribute to Dr and Mrs Young the full amounts of the levies invoiced to them when other unit owners have derived substantially greater benefit from the work for which the levies were raised than Dr and Mrs Young have. They also say that the Body Corporate has not followed the appropriate procedures for obtaining members’ approval, and for the funding of the work for which the levies were raised.

Background

[4] On 21 June 2017, I gave judgment refusing an interlocutory application by Dr and Mrs Young for an order directing that the Body Corporate’s solicitors, Rainey Collins, may not act for the Body Corporate any further in the proceeding.1 The following summary of the background to the dispute is substantially taken from that judgment.

[5] The development was completed in 1998, when 100 new unit titles were created. There are four commercial retail units on the ground floor, 24 residential units on levels one and two, and 72 residential units on levels three to eight. Dr and Mrs Young’s 10 units are located on levels one and two.

[6] The ground floor commercial/retail units have very large windows, and the exterior of these units are overhung by a concrete verandah. The units on levels one and two have small windows, inset into and sheltered by concrete…

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: [2018] NZHC 312
Decision Date: 2 March 2018

CaseChat Overview and Summary

In Body Corporate 85659 v Young, the plaintiff, the body corporate, sought summary judgment against the defendants, Leslie and Suzanne Young, for unpaid levies amounting to $104,569.85 plus interest, property management recovery costs, and legal fees. The High Court of New Zealand was required to determine whether the Body Corporate was entitled to summary judgment against the Youngs, or if the defendants had a reasonably arguable defence. The court found that the Body Corporate had not levied all unit owners in proportion to their utility interests, as required by the Unit Titles Act 2010, rendering the earlier resolutions ultra vires. The Body Corporate's subsequent attempt to rectify this by levying the ground floor unit owners did not validate the earlier resolutions. Furthermore, the court found that the Body Corporate's procedure for recovery of repair/remediation costs was not followed, and that summary judgment should not be entered before an apportionment of the costs of the work between all the owners had been made under s 126(3) of the UTA. The application for summary judgment was dismissed, and costs were reserved.

Orders