Body Corporate v Donovan - [2018] NZHC 145

IN THE HIGH COURT OF NEW ZEALAND
TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA
TAURANGA MOANA ROHE

CIV-2017-470-030 [2018] NZHC 145

BETWEEN
BODY CORPORATE

Plaintiff/Respondent

AND

MICHAEL PHILIP DONOVAN Defendant/Applicant

Hearing: 12 February 2018

Appearances:

D M Fraundorfer for Plaintiff/Respondent
D G Hayes for Defendant/Applicant

Judgment:

14 February 2018

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on
14.02.18 at 4.30 p.m, pursuant to
Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar
Date……………

BODY CORPORATE v DONOVAN [2018] NZHC 145 [14 February 2018]

The judgment

[1] On 26 June 2017 the plaintiff obtained judgment against the defendant in the sum of $322,200 together with interest in the amount of $58,084.95 together with costs and disbursements in the sum of $9,074 amounting to a total of $389,358.95. Also the plaintiff obtained an order granting it vacant possession of Units of which the defendant was the registered proprietor in a complex located at 30 Willow Street, Tauranga.

[2] The plaintiff is the Body Corporate for that unit title complex and is the second mortgagee it having purchased that mortgage from Belgrave Finance Limited (in receivership and in liquidation) in 2006.

Application to set aside judgment

[3] The defendant took no steps in relation to the summary judgment application. He now applies to set aside those orders made on 26 June 2017 on a variety of grounds. He claims it is in the interest of justice for the Court to require a full hearing because he says he has arguable defences and counter-claims. Those include:

(i)That the plaintiff’s judgment debt was a debt provable in his bankruptcy as at 28 January 2009 and that his personal liability for the loan had been released on his discharge from bankruptcy;

(ii)That the quantum of the alleged mortgage debt is not evidenced and cannot be proved with certainty;

(iii)That the claimed debt has not been acknowledged for more than six years in that none of the mortgages have been paid during that time, raising an arguable limitation defence;

(iv)That the Body Corporate has acted ultra vires in purchasing the mortgage and that it did not have the statutory power to use Body Corporate funds to purchase a mortgage;

(v)The Body Corporate has misused its powers, when acting against the personal interests of one of its members, in that it used its position to benefit itself at the disadvantage of a fellow member thereby acting in conflict of interest and in breach of implied term to act in all owners’ interests or breach of obligation of good faith, or; individual members of the Body Corporate devised a scheme to benefit themselves to the disadvantage of a family member thereby acting in breach of all owners’ interests or in breach of obligations of good faith;

(vi)The Body Corporate breached the legal requirement of the notification of the Body Corporate meeting of 3 February 2016 vitiating any decision of the meeting and/or defeating the defendant’s rights under s 210 Unit Titles Act 2010;

(vii)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.

Keep reading for free

Create a free CaseChat account to read Body Corporate v Donovan and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2018] NZHC 145
Decision Date: 14 February 2018

CaseChat Overview and Summary

The case of Body Corporate v Donovan involved a plaintiff, the Body Corporate, who obtained a judgment against the defendant, Michael Donovan, for $322,200, plus interest, costs, and disbursements amounting to a total of $389,358.95. The judgment also granted the plaintiff vacant possession of units in a unit title complex in Tauranga. Donovan subsequently applied to set aside this judgment on several grounds, including that the plaintiff's debt was provable in his bankruptcy, and thus he should not be personally liable for the debt. The plaintiff opposed the application, asserting its right to enforce its mortgage over the property, which had vested in the Crown as bona vacantia. The court considered the arguments presented by both parties and found that Donovan had arguable defences and counter-claims, particularly regarding the enforceability of the debt and the validity of the purchase of the mortgage by the Body Corporate.

The court held that Donovan's bankruptcy discharged his personal liability for the debt, and the plaintiff's secured creditor status did not affect this outcome. Furthermore, the court found that the Body Corporate lacked the statutory power to purchase the mortgage, and its actions were ultra vires. The court also concluded that the possession order was inadequate as it did not account for other occupants of the property. As a result, the court granted Donovan's application to set aside the judgment and the order for possession. The plaintiff was ordered to pay Donovan's costs on a 2B basis, together with disbursements approved by the Registrar.

Orders